Computer Programmer Breached Employer’s Copyright

A computer programmer and former non-executive director who breached his employer’s copyright by leaking specialist software to a trade rival is facing a substantial High Court damages claim after his wrongdoing was revealed.

The man had written the recruitment software for his employer but had covertly made it available to another company operating in the same field. The Court found that he had acted in his own interests and in breach of the fiduciary duty he owed as a director, a position from which he had only subsequently resigned.

His employer had not been aware of, or consented to, his deliberate infringement of copyright and his failure to reveal what he had done amounted to a further breach of duty. His plea that his employer had left it too late to sue him – a six-year time limit applies to breach of copyright cases – was defeated by his attempt to conceal his wrongdoing. The ruling entitled the employer to seek damages or an account of any profits which the man had garnered from his copyright infringements.

Holiday Pay and Overtime – UNITE Will Not Appeal Against EAT Decision

In the latest case on workers’ remuneration in respect of annual leave (Bear Scotland Ltd. and Others v Fulton and Others), the Employment Appeal Tribunal (EAT) ruled that employers should include ‘non-guaranteed’ overtime that is routinely worked when calculating an employee’s holiday pay.

The EAT held that this only applies to the 20 days’ annual leave entitlement guaranteed under the Working Time Directive (WTD), not the additional eight days’ entitlement granted under Regulation 13A of the Working Time Regulations 1998, and claims for unlawful deductions from holiday pay will be subject to the three-month limitation period for bringing claims laid down by the Employment Rights Act 1996. This will limit any retrospective liability on the part of employers, particularly as the EAT ruled that additional leave under Regulation 13A should be ‘the last to be agreed upon during the course of a leave year’.

Recognising the importance of the issues, the EAT granted the parties leave to appeal to the Court of Appeal on all points on which they lost, but doubted whether an appeal against its main finding as regards guaranteed overtime and normal remuneration would succeed.

However, the trade union Unite, which acted for the claimants, has indicated that it will not be appealing against the decision on limitations on retrospective claims.

That is unlikely to be the end of the matter but, for the time being at least, employers should include non-guaranteed overtime when calculating holiday pay, as well as other payments which constitute a worker’s normal remuneration.

We can advise you on your individual circumstances.

Mental Illness in the Workplace – Tribunal Rules

In a case which put the spotlight on the difficulties posed by mental illness in the workplace, a paranoid schizophrenic who was dismissed from his job for gross misconduct after he launched physical and sexual assaults on colleagues has had his compensation hopes boosted by the Employment Appeal Tribunal (EAT).

The man held a responsible position within a multinational insurance company but had suffered severe mental health problems requiring medication and admissions to psychiatric hospitals. The death of his mother appeared to have sent him over the edge and he had sexually assaulted two female colleagues and threatened others. Following the incidents, which ultimately led to criminal proceedings, he was swiftly admitted to a psychiatric intensive care unit.

In dismissing him, his employers found that he had failed to take his medication of his own volition and that there could be no guarantee that he would not commit further inappropriate acts against colleagues. They said that that was a risk which they were not prepared to take.

The man’s unfair dismissal and disability discrimination claims were rejected by an Employment Tribunal (ET). However, in allowing his appeal, the EAT found that the ET had focused excessively on the man’s ‘heinous’ actions, rather than his blameworthiness or culpability in respect of them.

Although serious, his actions were not such as to be incapable of explanation or mitigation and the ET had erred in concluding that dismissal necessarily fell within the range of reasonable responses open to the employer. There had also been only limited consideration of the impact of dismissal on the man and no critical evaluation of alternative steps which could have been taken, including requiring him to work from home. The EAT afforded the parties the opportunity to make further representations as to disposal or future management of the case.

Cut and Thrust of Film Industry Workplace Practices Exposed

In a bitterly fought case which exposed the cut and thrust of workplace practices in parts of the film industry, a producer has convinced the High Court that she at least deserved to be paid for more than three years of effort she put in before her contract was terminated.

The woman, a former make-up artist, was keen to make it in the movie industry and had been engaged under contract by a film company which in due course promoted her to associate producer. The terms of her contract were, however, far from clear and the company ultimately broke off all commercial dealings with her.

After she launched legal action, the company argued that she had agreed that she would only be paid if one of her projects came to fruition and was ‘green-lighted’. However, following an eight-day hearing, the Court found that, on a true reading of the contract, she was entitled to be paid £25,000 a year for her work.

She was awarded £79,167 in respect of the remuneration she should have received after the Court rejected the company’s plea that she had herself breached the contract by failing to adequately perform her duties. The company’s counterclaim that she had failed to reimburse expenses incurred during trips abroad, including to the Cannes Film Festival, was rejected.

Although the woman failed to establish entitlement to a £50,000 bonus, the Court ordered her to be reimbursed in respect of more than £6,000 in loans that she had made to the company prior to the acrimonious parting of their ways.

Employment Tribunal Members ‘Researched Internet’

ambulancesMembers of an Employment Tribunal (ET) have been criticised for falling into a trap which more commonly ensnares unqualified jurors by resorting to the Internet in a bid to fill gaps in the evidence in a disability discrimination case.

The ET was considering a woman’s discrimination and unfair dismissal claim against an ambulance service. The woman had appeared in person and, in order to make good perceived inadequacies in the medical evidence, members of the panel had privately carried out research on the Internet without prior reference to the parties.

In upholding the woman’s claim, the panel revealed the fruits of its online search, the accuracy and reliability of which it appeared to have accepted uncritically. The members refused to disqualify themselves from further hearing the case in terms which indicated that they had developed ‘an animus’ towards the ambulance service.

In upholding the ambulance service’s appeal, the Employment Appeal Tribunal (EAT) ruled that the members had ‘descended impermissibly into the arena’. In seeking to use the Internet to construct arguments which would favour the woman’s case, they had given the appearance of hostility towards the ambulance service.

In directing a fresh hearing of the case, the EAT noted that, far from causing no harm to anyone, the panel’s mistaken use of the Internet had exposed the parties to the substantial expense and delay of an appeal and a complete rehearing of the matter.

Acas Publishes Early Conciliation Figures

ACASSince 6 May 2014, it is a legal requirement, unless an exemption applies, for anyone wishing to make a claim to an Employment Tribunal (ET) to first notify the Advisory, Conciliation and Arbitration Service (Acas) by completing an Early Conciliation notification form. ET claims will not be accepted unless this procedure has been followed and a formal Early Conciliation certificate has been issued. The system was initially introduced on a voluntary basis on 6 April 2014.

Acas has now published information on the number of notifications received during the first six months that the scheme was in operation.

Between 6 April 2014 and 30 September 2014 there were 37,404 notifications in all, 36,162 from employees and 1,242 from employers. The average weekly number of notifications was around 1,600, which is in line with the number forecast. Included in the total number of notifications are 1,156 group notifications covering 8,142 individuals.

Only 10 per cent of employees (3,783) rejected the offer of conciliation. The employer is only contacted in cases where the employee decides that they do wish to proceed with Early Conciliation. At this stage in proceedings, 10 per cent (3,727) of employers rejected the offer of conciliation.

The statistics only become meaningful when cases have reached a final outcome. Figures on the status of cases notified during April, May and June 2014 show that, to date, 18 per cent (3,046) have resulted in a formal conciliated agreement (COT3) and 24 per cent (4,198) have been lodged as ET claims. The remaining 9,918 notifications (58 per cent) that have not progressed as ET claims may include a small number of cases that could still be presented as ET claims. It also includes cases where agreement was reached without the need for a COT3 agreement, as well as cases where the employee, for whatever reason, decided not to pursue the matter.

As more cases go through the system, so the impact of the Early Conciliation arrangements will become clearer. Acas will also be carrying out a survey of users of the scheme, the results of which will be published in 2015.

Further information on Early Conciliation can be found here.

Sacked Housing Association Officer Wins Appeal

A former housing association officer who succeeded in an unfair dismissal claim – but was awarded not a penny for the impact which his unlawful treatment had on his future earnings – has been handed a fresh chance to win a bigger compensation award.

The former anti-social behaviour officer had been awarded just over £26,000 for his past loss of earnings by an Employment Tribunal (ET). However, the ET found that he remained ‘eminently employable’ and refused to compensate him for any future loss of earnings. His award for loss of pension rights was also reduced by 85 per cent.

Following his dismissal, the man had sought to mitigate his loss by finding work as a postman, but was paid only about one third of his previous salary. That job had in any event come to an end when he was struck down and gravely injured by a hit-and-run motorist. By the time of the ET hearing, he was unemployed.

In upholding his appeal, the Employment Appeal Tribunal found that the ET had failed satisfactorily to address the question of his potential continuing loss arising from his dismissal. It had also given inadequate reasons for drastically reducing his award for loss of pension rights. The case was returned to the ET for fresh consideration of those issues.

CEO Who Helped Himself Must Repay £300,000

The former chief executive of a spread betting company who helped himself to more than £300,000 of its funds before it went into special administration has been ordered to repay every penny, with interest, by the High Court.

During the four years in which he led the company, the businessman had repeatedly asked its accounts department to pay him large sums for his benefit. He had made more than 80 such requests and received £540,409. He had promised to repay the sums by cheque but had in fact reimbursed only £231,087 before he resigned. The company sued him for the balance.

He retorted that he was ‘astonished’ to be facing legal action. He insisted that the money he received was fair recompense for his hard work and the skills he brought to the company. The form of his remuneration was more ‘convenient’ and took advantage of discounted foreign exchange rates enjoyed by the company.

The Court acknowledged that the explanations put forward by the businessman had displayed ‘considerable ingenuity’. However, they were ‘totally devoid of merit or common sense’ when measured against the background and evidence. He was indebted to the company to the tune of £309,321 and was ordered to repay that sum, together with accrued interest.

Redundant Company Secretary Triumphs in £400,000-Plus Claim

The former company secretary of a global mining concern, who received a £487,925 bonus after the company merged with a former rival, is entitled to £418,774 more after he was made redundant less than a year after the deal went through, the High Court has ruled.

The man received the ‘transaction bonus’ and warm thanks following the successful merger. However, on subsequently losing his job, a dispute arose as to whether his employment contract also entitled him to a ‘prescribed sum’ equivalent to a year’s salary, bonus, benefits and pension contributions.

In upholding the man’s claim, the Court rejected the company’s plea that the bonus was ‘in lieu’ of the prescribed sum. The terms of the contract were clear and the man had never agreed to forego his entitlement to the prescribed sum, either explicitly or impliedly by his acceptance of the bonus.

Government Taskforce to Assess Impact of EAT’s Holiday Pay Ruling

Further to the ruling of the Employment Appeal Tribunal (EAT) that remuneration received by employees for ‘non-guaranteed’ overtime which they routinely worked as part of a ‘settled pattern’ of their employment should be included when calculating their holiday pay (see Overtime and Holiday Pay – Tribunal Rules on Vital Test Case), the Government has announced that it is setting up a taskforce to assess the possible impact of the decision.

The announcement can be found here.