Legal Practice Notes

Practice Note This Practice Note explores the questions that arise concerning the application of liquidated damages clauses as a substitute for seeking damages for breach of contract. It looks at instances of liquidated damages clauses for either the employer or the employee. It contrasts enforceable liquidated damages terms with penalty provisions and reviews the inclusion of repayment terms. Relevant case law is likewise analysed......

This Practice Note examines what is meant by gross misconduct in the context of wrongful dismissal ie summary dismissal or termination on short notice or no notice This note explores gross misconduct within wrongful dismissal, meaning summary dismissal or ending employment on short or no notice. It considers fundamental breach of contract, conduct at odds with the duty of fidelity and/or the duty of trust and confidence, serious misconduct, gross negligence, and disciplinary rules. It also addresses misconduct for unfair dismissal purposes. Gross misconduct is behaviour by an employee so serious that the employer cannot reasonably be expected to continue the employment relationship. It must amount to a fundamental breach—one that strikes at the core of the contract. The conduct must be both gross (that is, extreme or out of the ordinary) and culpable (blameworthy). It is behaviour incompatible with the employee’s...

This Practice Note outlines the conduct of a main hearing in the Employment Appeal Tribunal ( EAT), covering the composition of the bench, whether hearings are public or private, when remote observation and any recording are permitted, the circumstances for remote hearings, and the manner in which judgments are delivered. For EAT contact details and cause lists, see the HMCTS: Employment Appeal Tribunal guidance. Hearings in the EAT are usually attended in person, but may, where just and equitable in the interests of justice, be held wholly or partly by electronic communications. For more, see Types of EAT hearings (in-person, wholly remote or partially remote), below. Appearance and representation before the EAT The position largely mirrors that in employment tribunals. A party may appear in person or be represented by: counsel a solicitor a trade union...

This Practice Note reviews the Transnational Information and Consultation of Employees Regulations 1999 ( TICER 1999), SI 1999/3323, which gave effect to the recast Directive 2009/38/ EC on European Works Councils and related information and consultation procedures. Under TICER 1999, staff could request that their employer establish a European Works Council ( EWC) so that information was provided and employees were consulted on issues affecting workers in at least two EEA states. Brexit impact Since IP completion day (31 December 2020), UK-based workers can no longer require their employer to create an EWC. Nevertheless, it was intended that any application to set up an EWC submitted before 1 January 2021 should be allowed to proceed to completion. A person who acted as a representative may, from 1 January 2021 onwards, continue to participate in their employer’s EWC if the employer agrees. The...

This Practice Note considers how various benefits are valued when calculating damages in an employment wrongful dismissal claim This note explains the approach to valuing benefits when assessing damages for wrongful dismissal in employment cases. It covers: private medical insurance permanent health insurance life assurance company cars other travel benefits It also addresses share incentive rights and the impact of exclusion clauses that seek to remove any entitlement to compensation for lost share incentive rights on termination of employment, or within a specified period afterwards. Damages may additionally include the value of pension benefits that would have built up during the notice period. The pension consequences of wrongful dismissal can be complex and are subject to specific presidential guidance. See Practice Note: Calculating pension loss in employment tribunal claims. For wrongful dismissal (ie a dismissal in breach of...

Wrongful dismissal This Practice Note explores the remedies (heads of claim) that arise where an employment contract is broken by dismissal (wrongful dismissal), with a focus on how awards for wrongful dismissal—that is, damages for breach of the contract of employment—are calculated. It addresses the overarching principles on eligibility for compensation, termination clauses, payments in lieu of notice ( PILONs), agreed (liquidated) damages, damages linked to the manner of dismissal (the Johnson exclusion area or zone), monetary loss arising from stigma or psychiatric injury resulting from pre‑dismissal breach, breach of any contractual disciplinary or dismissal process, loss of the opportunity to pursue an unfair dismissal claim, and the consequences of not complying with the Acas Code of Practice on disciplinary and grievance procedures. Under common law, an employee is wrongfully dismissed if the employer terminates in contravention of the contract of...

In some circumstances, the usual rules relating to dismissal do not apply, or additional requirements must be taken into account. Among the most significant of these are situations where a partnership dissolves (considered below) and where an employee also holds the role of a company director (see Practice Note: Dismissing a senior executive). See Precedent: Clauses—termination [ Archived]. Unlimited partnerships Partners within an unlimited partnership are not, in addition, employees of that partnership and therefore do not benefit from the statutory employment rights employees have on dismissal. An individual engaged by an unlimited partnership is, legally, employed by all of the partners acting jointly. As a matter of principle, this means that if a partner is admitted or leaves, the employment contract must terminate, because the employee is no longer employed by the same legal entity......

This Practice Note provides guidance on the various aspects of industrial action from an employee’s perspective It covers employees’ ballot rights, when an individual might incur liability, and the possible outcomes of taking part in industrial action. Industrial action sits at the heart of collective bargaining. Employers may trigger it by imposing a lockout, while workers commonly do so through their union, typically by calling a strike. The taking, or even the threat, of such action operates as leverage each side may deploy against the other during negotiations to secure an agreement. In this setting, industrial action has been characterised as workers refusing to do ‘something’ as a bargaining device, whether or not that ‘something’ would breach their contract. It also serves as a means of settling disputes of right, where the grievance is that the opposite side has broken its promise and failed to...

The Employment Appeal Tribunal ( EAT) can, upon request or on its own initiative where it deems it suitable, reconsider any order it has previously issued. However, the occasions on which such authority can properly be exercised are genuinely uncommon indeed......

The following types of whistleblowing claim are available: Unfair dismissal claims brought by employees where the reason, or main reason, for dismissal is a protected disclosure. A dismissal for whistleblowing is automatically unfair (see Practice Note: Automatically unfair reasons). For more detail, see Unfair dismissal below. If the claim succeeds, the claimant may seek interim relief and reinstatement, but cannot recover compensation for injury to feelings (see Practice Note: Unfair dismissal remedies—general). Claims by workers (see Practice Note: Entitlement to claim whistleblowing) that they have suffered any detriment due to any act or omission by their employer because they made a protected disclosure. Dismissal counts as a detriment, but only non-employee workers can bring a direct claim against the employer about dismissal on whistleblowing grounds under these provisions. Unlike employees, workers cannot obtain orders for reinstatement or re-engagement (see Practice Note: Unfair dismissal...

This Practice Note covers: the non-discrimination rule in section 61 of the Equality Act 2010 ( Eq A 2010) as it applies to occupational pension schemes—see: Non-discrimination rule—an overview below, and discrimination and other prohibited conduct under Eq A 2010, Pt 5 concerning payments to personal pension schemes, together with age-related exceptions—see: Employers’ contributions to personal pension schemes—prohibited conduct below Non-discrimination rule—an overview A ‘non-discrimination rule’ is a provision requiring a responsible person not to do any of the following: discriminate against another person while performing their functions connected with an occupational pension scheme (see: what is an occupational pension scheme below) harass any person in relation to the scheme victimise any person in relation to the scheme For more detail, see: Non-discrimination rule–when it applies below......

Alternative dispute resolution ( ADR) Alternative dispute resolution ( ADR) refers to non-court processes and procedures used to resolve disputes. ADR may take various forms, eg negotiation, conciliation, mediation, early neutral evaluation ( ENE) and arbitration, and its uptake is increasingly promoted within the courts and tribunals system, as well as becoming more commonly used, generally. This Practice Note outlines the Acas arbitration scheme and the use of arbitration in cross-border disputes, and points to example arbitration clauses for inclusion in employment contracts. It also summarises ADR processes available specifically in the employment tribunal setting, including Acas conciliation, judicial mediation, judicial assessment and dispute resolution appointments. In the employment context, ADR may either be arranged privately by the parties or form part of the employment tribunal process. The ADR mechanisms most frequently encountered are set out below: negotiation ...

This Practice Note This Practice Note explores the character of employment policies and policy documents within the employment context. Policies are akin to guidance: they reflect customary practice, and sound practice, yet they are not declarations of practice that applies in every situation. By their very nature, there will be occasions when adhering to a policy would be inappropriate, and flexibility is contemplated. It is recognised that employers must create rules to manage the minutiae of everyday working life without those rules becoming fixed contractual terms. For illustration, in Dryden, the employer implemented a ban on smoking at work (before the statutory prohibition, see Practice Note: Smoking in the workplace). The employee resigned and alleged constructive dismissal, asserting that introducing the ban amounted to a fundamental breach of their employment contract. The EAT concluded that the new policy was a ‘works rule’. It had no...

Practice Note This Practice Note sets out the reasons behind garden leave and when an employer might choose to deploy it in practice. It explores whether, in the absence of an express term in the contract of employment, an employer can impose ‘enforced’ garden leave, and identifies the circumstances in which an express garden leave clause may properly be enforced or relied upon. It examines how garden leave interfaces with an employee’s right to work and with the employment contract itself, including the impact on particular terms and conditions of employment such as holiday entitlement, directorships and other offices, and on ongoing contractual obligations and duties. It also addresses whether an employee is entitled to be paid during garden leave, together with its knock-on effect on any post-termination restrictions. It covers enforcement concerns and the criteria a court will weigh when deciding whether to grant an...

This Practice Note addresses an Equality Act 2010 ( Eq A 2010) provision that had no counterpart under the law in force before 1 October 2010. What amounts to discrimination arising from disability A person discriminates against a disabled person if: the disabled person is treated unfavourably because of something arising from, or as a consequence of, that person’s disability, and they cannot demonstrate that the treatment is a proportionate means of achieving a legitimate aim, and they knew, or could reasonably have been expected to know, that the person had the disability This is relevant where a disabled person is treated unfavourably because of something stemming from, or resulting from, their disability—such as needing a period of disability‑related absence—rather than because of the disability itself. Treating someone 'unfavourably' In Williams it was held that unfavourable treatment is distinct from a 'detriment'. It involves putting an obstacle in someone’s way,...

Practice Note This Practice Note explores the issues that arise around illegal or unlawful terms in employment contracts, including pay provisions intended to circumvent tax legislation, agreements with individuals who are not lawfully permitted to work in the UK, and arrangements to undertake work that is illegal or contrary to public policy. It also analyses the consequences of illegality, including where only one party is implicated, the absence of any requirement for knowledge of the illegality, and the continued ability to bring discrimination claims. The Note addresses the public interest dimension and the Supreme Court’s ‘trio of considerations’ identified in Patel v Mirza. Confidentiality clauses and the limits of contracting-out are examined as well. An employment contract can be tainted by illegality in the same way as any other agreement. Historically, one of the most significant areas of illegality has been covenants in...

This Practice Note This Practice Note addresses the case management powers of the Employment Appeal Tribunal ( EAT), namely: directions that may be issued by the EAT of its own initiative or on a party’s application; amendment of a Notice of Appeal; dispensing with or varying the EAT Rules; reasonable adjustments for a medical condition or disability; adding or removing a party; and the rarely used power to require a witness to attend or to provide documents. It also covers the EAT’s authority, on application to the Attorney General, to make a restriction of proceedings order preventing a vexatious litigant from commencing or continuing proceedings, and the appointment of a litigation friend where a party lacks mental capacity. As part of its case management role, the EAT holds broad powers to direct any party on steps to be taken in relation to an appeal. Such...

This Practice Note explores how marriage and civil partnership are defined for the purpose of safeguarding individuals against discrimination and other forms of prohibited conduct under the Equality Act 2010 ( Eq A 2010). Protected characteristics The Equality Act 2010 offers protection from discrimination connected to particular listed personal attributes that people may hold. Certain protections apply solely to a single specific attribute. Others confer identical protection in respect of all the attributes, which are collectively known as 'the protected characteristics'......

Across England and Wales, the Health and Safety Executive ( HSE) and local authorities oversee compliance with health and safety law. For details of how enforcement is carried out, including the HSE’s power to recover the costs of its pre-charge investigations, refer to: Practice Note: Health and Safety Executive prosecutions policy Practice Note: Powers of health and safety inspectors under the Health and Safety at Work etc Act 1974 Practice Note: Improvement and Prohibition Notices under the Health and Safety at Work etc Act 1974 For information on the position in Scotland, see: Scottish health and safety enforcement—overview. Statutory duty to ensure the health, safety and welfare of employees at work Employers are required, so far as is reasonably practicable, to protect the health, safety and welfare of their employees while at work. This obligation is set out in section 2 of the Health and Safety at Work etc Act 1974 (...

This Practice Note sets out the requirements for establishing a general partnership under the Partnership Act 1890 ( PA 1890). It also addresses statutory limits on the partnership’s name, the trading disclosures partnerships must provide, and the duty to prepare and retain partnership accounts. Formation To create a partnership, there is no need to file documents, register details anywhere, or complete other formalities. Two people may form one simply by beginning to run a business together and sharing profits, provided the definition below is satisfied. For an overview, see flowchart: Forming a general partnership—flowchart. For how a partnership may come to an end, see Practice Notes: Ending a general partnership—dissolution otherwise than by the court and Ending a general partnership—dissolution by the court. ‘ Partnership’ is defined in the PA 1890 as ‘the relation which subsists between persons carrying on a business in common with a view of...