Analysis of Contract and Employment Law Case - Coursework Example

?Introduction The questions whether Clarissa can successfully sue Precision Missiles plc to compensate her for unfair dismissal will hugely depend onwhether her dismissal with six months’ notice was unfair. At the same time, Clarissa’s acceptance of Flare’s offer would be depended firstly on whether there was express to “garden leave” clause and whether she can lawfully take on that offer without breaching her contract with Precision Missiles. I will try to establish the circumstances under which the garden leave clause is valid and applicable. I will then review some of previous cases where ruling in such circumstances were made with the sole aim of establishing which course of action Clarissa could take with regard to her claim of unfair dismissal and whether she can go ahead and take Flare Missiles job offer without breaching her contract with Precision Missiles plc. In this regard, I would be able to offer her better advice concerning what action she could take and the consequences associated with each action. Discussion This discussion will start with first explaining the ‘Garden leave’ clause in relation to employment contracts and proceed to explicate the extent of its enforceability. This will be with the aim of finding out whether Clarissa can be able to successfully proceed with her compensation claim of unfair dismissal and under what grounds she should do that. According to Smith & Thomas, garden leave clause aims at offering protection for companies against competition in the situation where one of their employees who may be in possession of commercial information which may be sensitive or have relationship with the company’s clients. A clause is enforced in the employee’s contract, which requires them to not work and stay at home for a given period and still receive their pay in full. The time for gardening leave varies and is between six months and an year. There is an implied term though that throughout this period, the said employee can not in any way breach confidentiality or work in competition with the company he/she is in contract with. In order to understand better the “garden leave” clause, let’s consider the Tucker v William Hill organization Ltd1. In this case, it was held that, where there is no contract provision that prescribe the time for which the garden leave will be in enforceable, there are limitations in this clause where an employee enjoys benefits accruing from professional activities apart from the economic benefits he/she receives. In this case, the court ruling heavily relied on the relation in the Sawdon& Co. v Turner2which the House of Lords approved in Herbert Clayton & jack Waller Ltd v Oliver3 that the term ‘employ’ needed a flexible meaning and provision of work would not have to necessarily be guaranteed. However, in the event that the nature of an employee’s profession requires him/her to constantly be working in order to progress his/her career, such as an actor attending public galleries’, than, if there were no provided work, the employer would be grossly breaching the employment contract. A similar ratio is seen in Lanston v AUEW (No. 2)4and in Herbert Clayton & jack Waller Ltd v Oliver5as far as theoretical performances, following the reasoning strategy followed in Montgomery v Fechter6, Daly’s Theatre Ltd (George Edwards) vMarbe7. Same ratios where there were indefinite fixed wage contracts such as Sawdon& Co. v Turner8 have long not been employed or applied by the courts. In the event that a contract provides that, an employer has no obligation of providing work, as it was held in the Hayward v Provident Financial Group9, there is no obligation for providing work. It was held in Tucker v William Hill Organisation Limited10 regarding obtaining court injunction in order to implementing the garden leave clause, the court in its judgment argued that it was simpler to enforce than in the restraint of trade clauses. In addition, there is a requirement that a fair amount of work or money be given as far as remuneration for working is concerned as it was held in Rosser & Sons v Devonald11. There is however, an exemption to this as held in the Sawdon& Co. v Turner12 where no particular reason exists that anything apart from money should be considered. Companies are allowed to utilize injunctions in order to prevent their employees from breaching the garden leave clauses as it was held in Henderson v Evening Standard Co.13 In these cases, the court considered that a continuing relationship, which included confidence and trust, existed and that it would be prudent in the interest of justice to grant such injunctions. In the case of Rabeyv Euro Brokers Ltd14 a similar ratio existed regarding a money broker. Academicians such as Freedland, Smith, Gouldring, and Thomas, have also supported this point of view. An employ cannot be coerced by way of injunction to continue working for any employer as it was held in the case of Nelson v Warner Bros.15. However, Henderson v Evening Standard Co. Limited16distinguished this case by arguing that the issue was to prevent the claimant from working for another competitive employer during the garden leave period. Where little evidence that if an employee works for a competitor will detrimentally hurt an employer towards the end of the gardening leave period, as held in the Hayward v Provident Financial Group plc17, the court will in such circumstances refuse an injunction. A confidentiality/anti-competitive clause was interpreted to apply during the entire period of a contract seen which included the gardening leave clause notice as was held in the Christiansen v Symbian. “One shall not, during the entire period of this contract (with the exception of if one has prior agreement with the board in writing or is a representative of the Group, such agreement should not be withheld unreasonably) be indirectly or directly concerned or engaged or interested in any role in any occupation or trade business whatsoever other than the affairs of the Group whether or not in competition in any way with the Business.”18 Where there is a limit of trade clause and furthermore gardening leave clause in a contract, they must be particularly reasonably construed as it was held in the Credit Suisse Asset Management Ltd v Armstrong19. It is also of great significance to consider the length of the gardening leave notice time when conceptualizing its enforcement. The length of this clause also affects its enforcement, whether or not it would be enforced. In Eagleston v GFI Group Inc20, it was held that, a garden leave notice time of twenty weeks should be reduced to a more fair length of thirteen weeks. Employers should not also enforce excessive garden leave periods of notice in employment contracts as was held in George v Cantor Fitzgerald International21. One other important aspect that would guide my advice to Clarissa as far as the Garden Leave clause is concerned is the payment during this notice period. During the garden leave notice period, payment should consist of other benefits and all the money the employee would have earned had he/she been at work during the said period as was held in Nomura International plc v Clark [2000] IRLR 766. The contractual responsibilities of an employee can be limited by the parities to a legal agreement containing a garden clause as was held in the case of Fulham FC v Jean Tigana22. An employer could rely on the knowledge of contract negotiations to justify a gardening leave clause such that a competitive firm could not have access to sensitive information as was held in the case between Stephen Bruce [2001] v Crystal Place Football Club (2000). In considering the extent of enforceability of the garden clause, it would be important to consider the case in which an employee has been involved in misconduct. This is vital particularly in the case of Clarissa v Precision Missiles plc, given that her dismissal and expressed garden leave six month notice is based on a construed misconduct. For instance, in the case of SG& R Valuation Service Co v. Boudrais& others23, it was construed that, an employee with the right to work poses that right with one condition. They have not in any way breached the employment contract, or, demonstrated in a more serious way that they are not willing or ready to work. In other words, they have not rendered it impractical or impossible for the employer to provide work. in these circumstances, the breach of duty or contract must constitute a wrong doing. The employer, under these circumstances is not obliged to provide work even if the employment contract is still valid. As far as the employment contract is concerned, this is not an implied term, but it is in the legal construct, a qualification, the right to do work. in the absence of a limit of trade clause, an employer can enforce the gardening leave clause so long as the above criteria is duly fulfilled. The employer can send an employee home for the notice period or until the period expires. The court referred to this ratio more recently in the case of Gorman & others v Standard Life Healthcare Limited24 and Hertfordshire CC v Gogay25. Employers under the common law of employment, the employer can in practice dismiss an employee by notice and negate whatever rights an employee might have. It is lawful for an employer to dismiss an employee given a proper notice regardless of the motive behind the dismissal. The question of whether a dismissal was correct or unfair was first affected by the Employment Contract Act 1963. This attempted to change the law in two ways including extending the notice period to the length of continued service and by safeguarding the rights of employees during the notice period. In the case of Clarissa v Precision Missiles plc., a dismissal has been established. The only question that arises is whether her dismissal was fair. In order to answer this question, we would first need to establish the reason for her dismissal. Secondly, is the reason permissible to justify a dismissal? According to the excerpts of this situation, Clarissa was dismissed due to her misconduct as far as her job role was concerned. Do her actions constitute misconduct? Employers need to be explicit about what misconduct would lead to the dismissal of an employee by setting conduct and performance standards reinforced by rules. They need to inform their employees of the consequences they are likely to face in the event that they break the disciplinary rules by listing examples of actions that constitute gross misconduct. Did Precision Missiles plc.inform Clarissa of actions that would constitute gross misconduct that warrant a dismissal? This will also need to be established. In the event that an employer fails to identify what he means by gross misconduct, dismissal in such circumstances is normally considered to be unfair as was held in the case of Cardiff Rly Co v Lock26. In the event that misconduct is established, whether an employee can still perform her duties effectively or is competent is unimportant. Was Clarissa dismissed on the grounds of misconduct or confidence? If it is established that it was due to trust or confidence, then, the employer is not obliged to follow it misconduct procedures as was held in the case of NorthGlamorganNHS Trust (EAT) v Ezsias 18 March 2011 (Unreported) Conclusion Can Clarissa successfully pursue her claim of unfair dismissal against Precision Missiles plc? According to the above argument and review of cases concerning unfair dismissal, I would advise Clarissa to consider proceed with a suit against Precision Missiles limited concerning unfair dismissal on the ground that her actions do not constitute gross misconduct. This is based on the assumption that Precision missiles did not outline circumstances under which an employee could be dismissed and those actions that would constitute gross misconduct. It may be argued that her dismissal was based on loss of confidence and trust by her employer, Precision Missiles plc. this is not the case though we can argue that her actions might have been triggered by the difficult circumstances she was facing due to her divorce and thus do not warrant a dismissal. Should she consider taking up the Flare’s job offer? Would it be legal? Or will she be breaching her employment contract with Precision Missiles plc? In my opinion, I would advise Clarissa not to take up the offer by Flare Missiles. This is because she will be breaching her contract with Precision Missiles plc given that she would still be within the garden leave clause period. She would still be under a valid contract with Precision plc because she would be receiving her full pay despite not working and that she would be engaging in competitive affairs. At the same time, she might be breaching the confidentiality agreement with Precision Missiles plc. 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