Internal Vacancies; Secondments; Flexible Working; Garden Leave; Restrictive Covenants & Restraint of Trade

Posted in : 'Any Questions' Webinar Recordings on 11 January 2019
Seamus McGranaghan
O'Reilly Stewart Solicitors

'Employment Law at 11' is a series of 45-minute webinars from Legal Island in conjunction with O'Reilly Stewart Solicitors.

Scott Alexander, Head of Learning and Development at Legal Island, discusses your Northern Ireland employment law questions and topical HR issues with Seamus McGranaghan, Director at O'Reilly Stewart Solicitors.

Topics covered in this month's webinar include:

  • Internal Vacancies;
  • Secondments;
  • Flexible Working v Agile Working;
  • Garden Leave;
  • Restrictive Covenants and Restraint of Trade

Don’t forget to visit the ‘Seamus Says – Employment Law Discussion’ section on the employment law hub, which provides answers to over 130 employment-related questions addressed throughout this webinar series.

Log in to watch the recording and read the full transcription.

Transcript

Scott: Okay. Good morning and happy new year to everybody. My name is Scott Alexander. I'm from Legal-Island. Welcome to the first of the any questions, ask Seamus webinars that we're doing in 2019. I'm here, of course, with Seamus McGranaghan from O'Reilly Stewart.

Seamus: Good morning, Scott.

Scott: Good morning there. Happy new year to you, Seamus.

Seamus: Same to you.

Scott: The slight difference is this year—not very much difference, right enough—but a slight difference is that rather than doing the survey, which recently none of you answered on questions after the webinar, if you just want to write to me, I'm scott@legal-island.com. So, you'll get the email afterwards anyway.

But if you want to send some questions—we had a couple this week come in. There's no point in you emailing me during the broadcast because I've got my phone on do not disturb, but any of the questions that come in today or in subsequent days, we'll try and deal with at the next webinar, which will be on the 1st of February for O'Reilly Stewart.

We also have another webinar this particular month. That would be Mark McAllister from the Labour Relations Agency. He is having a webinar with us on the 22nd of January, again at 11:00. You can register for that if you go on to the events page of the Legal-Island website. Hopefully, you can join us for that. It's his case law update of the year. He's looking at the ten most important cases of the year, why they're important, what you should do about them while you're at it. You make some notes. If you were at the annual review, that's a kind of reminder and refresher for everybody.

Anyway, we're now going to start this year with the mighty Seamus. We have some questions that have come in today. We're dealing with a number of things, including internal vacancies, garden leave, restricted covenants if we get to them and a number of things on secondments. So, there are a number of things coming up.

Internal Vacancies

Q: An employee is being investigated but has applied for a different internal vacancy. She claims it is unfair to expect her to attend the interview until the investigation is over. What advice can you give?

The first question, Seamus—an employee is being investigated but has applied for a different internal vacancy. She says it is unfair to expect her to attend the interview until the investigation is over. What advice can you give?

Seamus: Well, the important point in terms of this query is that we don't know what the investigation is in relation to. So, we don't know if it's a disciplinary investigation or it can well be a grievance investigation. You can possibly understand that if an employee has put in a grievance that they may be hesitant to proceed with an interview process for another vacancy while that's ongoing because they may feel that they want that resolved.

In addition to that as well, if you have someone that is facing possible disciplinary procedures, they may feel that they want that addressed in terms of they don't want a dark cloud over them going into any kind of interview or any role. So, it's understandable, but at the same time, the real crux of the matter for me here is if I was sitting in the HR advisor seat, I would be saying that we have a vacancy here in our organisation.

It's an important role with responsibilities that need to be conducted and carried out within the organisation and it's a vital importance that that role is filled and it's filled as quickly as possible because we're looking at the business need here. My opinion and my view on it would be that you would be proceeding to complete the vacancy process and whether that's through the internal trawl or what it is, but for me, that's the most important aspect here.

I can understand there might be exceptional circumstances where perhaps you do need to complete the investigation first of all, but really, you're looking after your business here. If the business isn't there, there aren't any jobs and there are potential redundancies if the work isn't done. You can imagine if this was a role, for instance, that was dealing with invoicing and things like that, there could be a very important role. My view would be that you could surely deal with the two processes in tandem and you could hold the investigation separate to any interview for the role.

Scott: There are certain sensitivities there, but you can't let the tail wag the dog.

Seamus: No.

Scott: You've got a business to run. You go ahead and you do that. Sometimes you find that people will say you can't go ahead with any of that recruitment until this process is finished. The answer to that is generally get lost.

Seamus: Yeah.

Scott: It's our business. We will run it. But there are sensitivities there. You could have somebody presumably argue, whether they win it or not, but they could presumably argue there's some kind of—what's the word? Penalization or victimization. If it's an equality angle that's in this investigation . . .

Seamus: The risk would be that if the person go through the interview process, doesn't get the job, and then makes an allegation whenever they didn't get the job to say, "Well, this is because this investigation was ongoing and my name hasn't been cleared," or, "I'm now viewed as a troublemaker," or something like that. So, you could understand that there is a bit of risk with it dependent on the circumstances, but ultimately, the necessities and the needs of the business are paramount, really, here, I would have thought.

Q: If I have a temporary internal vacancy, can I pick a member of staff to offer the role to or do I need to advertise it to all staff and interview for it?

Scott: Okay. We have another question on internal vacancies that came in this week. Just while you're listening, everybody, there is a little chat box on your screen if you want to send in any questions live. We'll try and deal with those as well. If we don't get through them, we'll hold them over until next time, which is on the first of February. The next question—if I have a temporary internal vacancy, can I pick a member of staff to offer the role to or do I need to advertise it to all staff and interview for it?

Seamus: This is interesting. Certainly, from my experience, I do get a lot of calls about this from HR advisors that I give advice to and there is always that temptation where there is a temporary role that comes up and you say, "I have the perfect person for this. I know who can fill this role temporarily. They'll be brilliant at it. I don't want to put it out for internal trawl because I'm going to get a lot of people and then there's going to be upset and there are going to be disappointed people and all the rest."

But look, ultimately, I think the correct legal answer and the correct practice and the best practice would be to advertise the role and if necessary, then hold your interviews. Ultimately, you want to get the best candidate for the role. There's no doubt that the way to obtain the best candidate would be to hold an interview process and do a correct competition for it. It's the fair and the right way to do it.

The risk, I suppose, is if you don't do it that way, you potentially alienate, you disappoint other employees and really, what you're doing is you're denying the opportunity for other employees to have a stab or at least have a go at the role. The majority of times that people apply for a role—I know this doesn't apply all the time—but if they apply for the role and they get a stab at it and they don't get it, they'll take it on the chin. Some people will be aggrieved and there are people that have a sense of entitlement and feel they should have got the job, but that's a different matter. I certainly would have thought that you as an HR practitioner, you want the best person for the role.

You also want to be fair to your older staff and you don't want a situation where another employee comes along and says, "I think it's unfair. I was deprived the opportunity here of this role. Although it's temporary in nature, I could have gained new skills. It might have set me up for a promotion further down the line and it's unfair that someone else has obtained that opportunity and I haven't." So, to me, it's following the correct and best process here. It's keeping yourself safe and out of risk. Really, it's doing the best for the company and the employees.

Secondments

Q: An employee secondment to another internal department was issued for up to one year and the employer wants to extend it further, but the employee doesn't. Where does the employer stand?

Scott: Okay. The same person wrote in a couple of questions just on secondments. Now, they're not on the list. Hopefully, they won't take too long to deal with, but they are very interesting and they kind of tie in with the later question that we had on restrictive covenants, if you like, because they're all about contractual wording and being tight on certain contractual entitlements. So, this question here, on secondments, "Unfortunately," it says, "We do not have a secondment policy."

Seamus: Right.

Scott: So, there you go. You've lost already people. So, the question is, "An employee secondment to another internal department was issued for up to one year and the employer wants to extend it further, but the employee doesn't. Where does the employer stand?" Keeping in mind they have no secondment policy, Seamus.

Seamus: What we're looking at here is there's an agreement in place. Whether that is an expressed or an implied agreement or whether it has been actually put in the contract between the employer and employee, but what I'm reading here is that there is an agreement that the secondment would be for up to one year. You have an employee here that's saying, "I don't want to remain in this secondment. I want back to my original position."

The first point, I think, would be for what the employer wants, in these circumstances, the employee to remain in the secondment and the first thing is, really, to consult with the employee. If the employee straight away out of the first thing that they say is to you, "I'm not staying. I want back into my old job," they're going to say, "You can't keep me in this job. The agreement was up to one year. I want back." So, to me, it's about consulting with the employee.

I think that you want to find out why they're not happy in the seconded role. There could be a number of reasons for that. You can imagine that potentially the employee is going to say, "I feel like this is a dead end for me. At least in my old job, there might be a career progression. There's a career track to go through." Or maybe they said, "It wasn't a role I thought it was going to be."

Scott: "I don't like the work. I'm losing skills." It could be any number of reasons why they don't like it.

Seamus: It could be anything.

Scott: Which could be fixed, potentially.

Seamus: Yeah.

Scott: Without that discussion, you're not going to fix them. So, having that discussion is vital.

Seamus: Absolutely.

Scott: Assuming, though, that we get to the position where we're still the same, the employer says, "I need you in that role," and the employee says, "No way. You said a year. I'm going back." Where does the employer stand in line with this person's question?

Seamus: I think the employer is going to have difficulties. If there was a clear secondment policy in place that said that the employer had a right or a discretion to extend it, that would give the employer benefits in that sense, but where there's no policy in place, I would hope at least that there would be some sort of agreement, whether it's recorded and written in an email, in a letter to the employee setting this out, but really, where their contractual agreement, whether implied or expressed is that you've got up to a year. The employee is going to have a right to say, "I'm entitled at this point to go back to my original role."

Scott: You would expect some kind of letter or email there, but in the absence of that, the employer is really on kind of ropy ground, aren't they?

Seamus: Absolutely. You would imagine that if the employee was to push this, you're looking at some sort of grievance, or potentially that they could say this is a breach of my contract of employment and that they seek to resign.

Q: If there is no longer enough work to justify the seconded employee to return to their original role, would all the employees within the same role be put at risk of redundancy?

Scott: Okay. Well, moving on, there's a second part to this question. If there is no longer enough work to justify the seconded employee to return to their original role, would all the employees within the same role be put at risk of redundancy and the short answer is yes.

Seamus: Absolutely. Yeah. If the secondment is coming to end and you say to the employee, "Well, look, the difficulty here that your old role doesn't exist," the employee is going to immediately say, "Well, look, the role I was doing, the original role, is the same role that's being conducted by a number of other employees. We should be pulled together and a redundancy process applied to all of us to make it fair." Now, I think the benefit of having a secondment policy or a specific agreement in place might be that you say to the employee at the time, "Look, you can take the secondment on. It may be of benefit."

Let's go back to the idea that if there has been a possibility of secondment, it has been at the internal trawl and everything else and the successful candidate is there and you're saying to them, "Look, we can give you the secondment, but there's no right or obligation for us to reinstate you back into your original position," and you might be at risk of redundancy, if there's been notice provided to the employee in relation to that and it's recorded in writing, I think that changes the goal posts very much.

Scott: Yeah. The employer is on stronger grounds there. But in the absence of anything . . .

Seamus: In the absence of it, the employee, I think, has a right to say, "If my role is no longer available and there are a number of people doing the role, we should be pulled together and a redundancy procedure applied to that." Two exceptions, really, outside of that that come to mind—one is that if you have somebody that is off on maternity leave or if there is the obligation in terms of looking at redeployment and things like that as well, those types of employees are protected and would have a right to return potentially to their original role.

Scott: That would be impact the same with the temporary vacancy-type things. You may have a situation where you don't put out to tender, if you like, or put out to the whole of the workforce, simply because you've got other more demanding people who need something, and you've got to do something.

Seamus: Yes.

Internal Vacancies

Scott: Now, there's a question that just came in here, Seamus, on the chat box, which ties in with both of those, and it's where somebody has been promoted internally on a temporary manager's post and now, the employer wants to give them the job permanently. That happens quite a lot.

Seamus: It does.

Scott: Normally, you get away with it and it's fine, but it shows you the kind of advantage you get from getting a temporary position.

Seamus: Yes.

Scott: And why it's better to market it. But in this particular situation there, if they were just to say, "Look, we're going to make you permanent," what's the position?

Q: What is the position when somebody has been promoted internally on a temporary manager's post and now the employer wants to give them the job permanently?

Seamus: I think there are risks for the employer to do that. Where you have a permanent position and a permanent role, there could be scepticism among the existing staff that this person was selected for that role specifically for it to be made permanent and maybe it was just a trial period on the probation, that it was a bit of a full process.

The best approach for any employer is that where there are roles available—I'm not necessarily saying you have to go out externally for those roles if they could be dealt with internally, it's best to run the competition for them. It keeps you right and it keeps the dogs in the doors in the sense that you have some protection that you've ran a fair process in relation to it. If you don't, you leave yourself exposed.

It also fades back down into the motivation of your staff. If other roles come up, people may say that you are doing an internal trawl, there's a risk that somebody will say, "Well, what's the point in applying? In this office or in this organisation, they just hand-pick people for the roles. There's no point in me applying." You really are doing yourself a disservice, I think, at that level.

There is a very strong temptation to do that, where you have a temporary role, where the person comes in and they take the role on. They expand it and they give a justification for permanency of the role. They also feel like they have a sense of entitlement for that role as well. That can be difficult to manage from the employer's point of view. So, it's important just to be clear at all levels with all staff and that you're not creating any expectations or anything like that as well.

Scott: Even with that, if you were to advertise it, there's a very good chance that the other staff—this is a small employer—but there's a very good chance that the other staff would simply say, "Look, there's no point in competing against that person." They got the experience and the advantage with those types of things.

Seamus: Yes.

Scott: So, it's probably in the best interest of the employer to put it out there and say if anyone wants to apply, the other person, the person that's been doing the role, should have the advantage.

Seamus: You would've thought so.

Scott: And you would think they're likely to get the job. It may be that nobody bothers applying, in which case you've got around all this problem that you've previously had, where people feel that it's a job for the boys.

Seamus: Yeah. It's a potential solution of it. Absolutely.

Flexible Working

Q: If an employee has more than 26 weeks continuous service, but recently applied for a new full-time post in the organisation, can we state they need to have at least 26 weeks continuous service in their new posts before they can make another flexible working request?

Scott: The next question we're going to look at kind of ties in there again. It's on flexible working. It came in between the last session that we had and over Christmas. "If an employee has more than 26 weeks continuous service, but recently applied for a new full-time post in the organisation, can we state they need to have at least 26 weeks continuous service in their new posts before they can make another flexible working request?

Seamus: There's a very straightforward answer to that question and it is that under the legislation, the position is that once you have the 26 weeks continuous employment within the organisation, that you're entitled to make your application for flexible working. You cannot departmentalize and say if you're moving into a new department within the organisation, the clock starts to tick again for your 26 weeks. Where there's a period of continuous employment, you must have the 26 weeks. Once you have that under your belt, you have an entitlement.

Scott: You can make a request. Now, there is a barrier to making a second request if you've been rejected. So, you're barred for 12 months.

Seamus: Yes.

Scott: But in this situation here, if you have somebody who makes a request, they perhaps get flexible working and they move to a different role, there would be nothing, really, to stop them saying, "Hey, can I have flexibility in that other role?"

Seamus: Yes. I think the key aspect for that, what I've taken from this question and what the issue behind it might be is that if you have somebody working, they've made a flexible working application, again the law and the procedure is pretty clear—you can only make one statutory request in any 12-month period. Also, the application of flexible working, it is permanency. So, it's not a situation where you can apply for flexible working and six months later decide to change your mind. There is permanency with it now.

The smarter way that a lot of employers deal with flexible working is to say, "Well, if it's looking like a possibility, let's do a trial run. Let's do a test. Let's pilot this out for 12 weeks and see how we get on." Then we'll know better at the end of that period whether we can confirm the flexible working arrangements as permanent. So, there's an ability to do that okay.

Really, what might happen in these circumstances is that we have somebody in that has been working at least for the 26 weeks, for the six months in the role, and they're in a position whereby there's a new role coming up. If they're already on a flexible working arrangement, the opportune time to discuss that, really, is at the interview stage or whenever the job offer has been made to say, "Well, look, if you're on a flexible working arrangement at the minute, this new role that you're looking to move to, here's what we can and can't do or what we can and can't facilitate."

Then that works vice versa as well. It may be that the employee is a very good employee, has put an application in for flexible working, but the role just doesn't allow it. That's okay too. The legislation says that specifically in Northern Ireland, there has to be that business case in terms of saying how it's all going to work or not. Sometimes it just doesn't work. I think that's few and far between.

We're also of the view now—I do remember I had a tribunal case a couple of years ago, whereby the employment judge said that it was very few jobs, few and far between now that couldn't work on a flexible basis and it would be hard to think of one that wasn't. Now we were fighting the case under the circumstances. We thought we had a very good case. It turned out . . .

Scott: That you didn't.

Seamus: The judge didn't agree with us. I wouldn't say that we didn't have a good case, but the judge didn't agree with us. Those words always stuck with me, specifically in and around applications for flexible work at our job shares or anything like that. I think certainly the climate now is that these applications should be accommodated, certainly where they can be.

Scott: There's only a right to request. There's not a right to get it.

Seamus: No.

Scott: But the bottom line is there is a benefit to both the employer and the employee in flexible working because if you can accommodate the work-life balance, which is what flexibility is about, of the employee, they're more likely to stay. So, flexibility is a retention tool. It also makes people happier and more willing to go into work and do the job. So, it's about engagement.

Q: What's the difference between flexible working and agile working?

We had a follow-up question on this flexible working thing, which is what's the difference between flexible working and agile working? So, if flexible working is the, if you like, more of a benefit for employees, it's there to enable them to work, to balance their work-life balance and maybe their family responsibilities and so on. What's agile working about, then, Seamus?

Seamus: It's this idea now that we have these new terms that arrive with us every so often and suddenly, you hear everybody talking about it and you're not quite sure what it means. But you're right in terms of we've covered off the position of flexible working there. Just to recap on the three main points in that, you have to be an employee, not an agency worker or there's an issue about if you're in the armed forces, 26 weeks continuous period of employment, and you can't have made another application within the past 12 months.

The idea behind the flexible working is to move away from that traditional 9:00 to 5:00-type role and to facilitate people to be able to do a job outside of those normal hours that we see. I think it would be very surprising to go into any office where there's not some type of flexible working that's taking place, whether that's on job shares, whether it is people working core hours, sort of 10:00 to 4:00 sometimes rather than the strict 9:00 to 5:00 or some sort of part-time work.

The big thing now is the working remotely from home. Working remotely from home can fade into the agile working aspect, but essentially, to be clear, flexible working is where we're looking at a move away from the traditional working mode of 9:00 to 5:00. Agile working is more about the format of how you work when you are working. So, if we take things, for instance, like within a workplace, the idea of everyone having a desk set up and sit behind the desk or everyone has a certain point in the office where they work at.

Agile working is about working efficiently in terms of the projects that we have on, that types of work that we're doing. So, a classic one might be whenever you have a situation that there's a team of people working together within an office. They don't necessarily have to be in the office working together on it. It's the idea of perhaps maybe having these ideas of click shares and remote access to certain apps, where everybody can contribute in the one space, but not necessarily at the same time.

Scott: Sometimes you can. You can see the little comments. If you've used certain apps or software applications, I remember we were chatting earlier when Employment Law Hub, the website was being developed, the website developers put their changes onto this space on a temporary website and we could all feed in with our comments and say, "No, that's right. No, this is wrong. Let's change this. Can you change that word?"

You can see all the little ways that was working through. It was a way that you could respond quickly without us having to go and have meetings all the time down in Weavers Court, we could simply contact them effectively through a website and make our changes known then. So, it's about flexibility from the employer's point of view, being able to respond quickly, if you like. That's where the agility, the agile working really comes from.

Seamus: There are certain circumstances where there's a lot of managerial positions now that do not in any way follow the 9:00 to 5:00 or say that you have to work 35, 37, or 40 hours a week. There's a lot of jobs out there that people will have commitments that they have to work in the evenings. They'll have to attend functions. They'll have to have attend meetings and seminars and things like that that all take place in the evening. It's this idea that you are looking to improve productivity within the workforce. You're looking to boost motivation.

The real key thing is was it prioritizing the physical and mental wellbeing of staff in order that you have a more efficient workforce. So, rather than looking at the hours that we work, agility is about the way we work and the format of how we're working. It talks about these would have been new age terms a couple of years ago, but we're all very familiar with them now, the idea of hot-desking, of having our breakout spaces in work, where you don't necessarily have a seat or a place or a desk at your work.

But it's free-flowing that people have an area and a space to meet in order to discuss projects or alternatively that that's done using the latest information technology that we have, where you don't necessarily have to physically see each other. We all use things like Skype and things like the Doodle Polls that we have now in terms of we don't need to actually physically speak to each other. It's a great way, if you can imagine, of having ten people and trying to arrange a meeting, things like that, without having to engage on a face-to-face basis, and giving people additional time in order to do that.

Scott: Yeah. Well, we do physically have to speak to each other, Seamus.

Seamus: Yes, we do…

Scott: Because we enjoy it, you know? That's one of those things. I remember going to meetings down at the Science Park at the Titanic Court. The guys there would book a table in the canteen area and that would be their office basically whenever they had to go in. Because they were seldom there, they were working from home. There were shared spaces upstairs or whatever. If you needed a meeting room, you would book a table, basically, in the shared area.

That's the kind of agile working type of thing. You can look it up on the internet. There are loads of ideas on how to, if you like, use technology to improve the way that you work. Undoubtedly some of them don't work. We'll have to go back to the old-fashioned ways of sitting next to each other like we're doing now, Seamus, you know?

Seamus: That's it. Unilever has a good quote in terms of how to describe this. They say essentially that the concept of agile working is an approach to getting work done with maximum flexibility and minimum constraints. That really kind of sums it up in terms of it's a smarter way of working. It's a more efficient way of working. It's gone to the old days of the 9:00 to 5:00 at the desk, core hours and that's when the work is done. Things have changed. People are on the move. It's all about mobility. It's all about hitting your mark whenever you need to and using the technology to get there.

Q: If the employee is on flexible working arrangement, apply for flexible role outside of their existing flexible pattern and they're not successful for that role, can the employer not discuss why they cannot be more flexible in their current role and review that due to the business needs?

Scott: Okay. We have another question coming here. I'm not quite sure I understand it. So, I might ask the caller to drop me a line afterwards, scott@legal-island.com, Scott with two T's, by the way. Going back to flexible working, if the employee is on flexible working arrangement, apply for flexible role outside of their existing flexible pattern and they're not successful for that role, can the employer not discuss why they cannot be more flexible in their current role and review that due to the business needs? I think what that's saying is the limits on flexibility.

Seamus: Yeah.

Scott: I think maybe there's a bit of misunderstanding there. There's nothing wrong with an employer at any stage or indeed an employee at any stage discussing their needs to be flexible or to have some kind of different work pattern at any time. It's just a statutory scheme, which stops you making an application and if you've been rejected, you're not allowed to keep making applications. So, you can't, if you like, frustrate your employer by continually saying, "I don't want to work Mondays anymore."

But there's nothing wrong if you don't work Mondays and your family circumstances change or something comes along or you have elderly parents that you've got to look after for a while, there's nothing wrong with that employee or indeed the employer at some stage saying, "We would like you to change your hours," or, "Would you want to consider that?" So, you can do that at any stage.

Seamus: You wouldn't want a situation arising within your workplace whereby an employee would be of the view or be of the fear of, "I can't raise a concern that I have about my working circumstances because I'm on a flexible working agreement here and that's been dealt with and I can't do anything for 12 months, certainly." You can agree anything outside of that. The idea is just to prevent people from making repetitive applications whenever a decision has already been made. But when circumstances change, absolutely you want the employee to feel they can come and have that discussion with you.

Garden Leave

Q: An employee was asked to attend an investigation meeting but tendered his resignation before this could start. He was quite militant during a follow-up meeting. He refused to sign the minutes of the meeting. We accepted it and gave him garden leave for his two weeks' required notice as per his contract. What are the dangers of this?

Scott: Okay. We're flying through these today, Seamus. Garden leave is the next question. An employee was asked to attend an investigation meeting but tendered his resignation before this could start. He was quite militant during a follow-up meeting. He refused to sign the minutes of the meeting. We accepted it and gave him garden leave for his two weeks' required notice as per his contract. What are the dangers of this?

Seamus: Just to go back to the issue of garden leave, first of all, garden leave is an important provision for employers. So, if you have someone that comes into work and resigns from their position and says, "By the way, I'm going to work for our competitor, you may have restrictive covenants, you may not, but at that point, you may say, "This employee is now a risk for the employer because while they're here, we know they're going to move somewhere else," and they might take steps . . .

Seamus: They might take steps in order to cause difficulties or to interfere with those non-compete-type clauses that we have. A lot of employers will, at that point, immediately say, "Okay, you're on garden leave." What that means, essentially, is it does what it says. The employee remains of an employee of the organisation through their normal notice period . . .

Scott: Bound by all the contractual terms . . .

Seamus: Absolutely.

Scott: Except one, they're not at work.

Seamus: Yes. They're not at work. Usually, the employer will reserve a right to provide the employee with work while they're home. So if there's something specific, they may say, "During your normal working hours, we require you to complete this work," or alternatively they can ring them up and say, "We require you to come into the office today because we have queries about something. And the employee has to abide as they would through their normal terms and conditions, but essentially, it does mean the employee is at home.

Now, it can be frustrating for some employees that want to move on and get into their new job, but they can't because they're stuck with their notice period. They have to work that out. They sometimes feel a bit frustrated at home. Others think it's great because they're not doing any work or they're getting paid for it at home. Whilst they're at home, unbeknown to their employer, they could be working away in terms of making endeavours for their new role.

Scott: So, in this one here, that's not what's effectively happened. There's an investigation. We don't know what it's about, but there's been some kind of investigation. I presume it's a disciplinary issue because rather than go through the process, this employee has resigned. They have said, "Okay."

They were very angry. They refused to sign the minutes of the meeting. It means very little, really. You've got your minutes and your meeting and you record the chap refused to sign them. So, he's now on garden leave and they've said, "Well, that's fine. You're on garden leave. You're not coming into work. You're still an employee for two weeks." What are the dangers really, if any, for the employer?

Seamus: The dangers are limited. Again, it's about protecting the business. You need to make sure that you do have an appropriate clause in your contract of employment that allows you to place the employee on garden leave. Now, a lot of employers will go ahead and do it. I've given advice to employers and I've said it's a commercial call for you here. If the employee is going to be in work during that notice period, they're going to be aggrieved.

We see here from the background here that this employee is annoyed and angry and frustrated. You're potentially going to have an employee that's going to have problems with you or for you and not another staff within that notice period. Sometimes it's better just to get them out of the office space or out of the workplace all together where they can cause those difficulties. In those circumstances, provided that you're abiding by the terms and conditions, one, you have a right to do it, put them on garden leave, and second of all, that they're being enumerated and paid in a normal way, I don't see any dangers whatsoever.

The only risk I would say would potentially be where the employee is aggrieved and is considering a constructive dismissal claim. It's always better if the basis of the allegations against the employee form part of the constructive dismissal claim. Certainly, in advice that I've given in the past, I've said to the employer proceed with your investigation, complete it, and arrive at a conclusion because ultimately, if they bring a constructive dismissal claim, you can say, "Well, we investigated it and here was our outcome in terms of it." I can give justification, but other than that, I don't see any risk for the employer whatsoever.

Scott: Some things are worth writing to the employee and saying, "We were carrying out an investigation and you chose to resign. We accept your resignation," or something to highlight the fact that it was ongoing. Your point there about the constructive dismissal, you sometimes get employees who say this process is so flawed, I'm being set up for a fall here. You're breaching my contract by this complete horlicks of an investigation and you're setting me up here. So, I'm leaving. You get the odd one there, but assuming it's not that, it's just an employee who's been caught out and decides to resign instead, there shouldn't be too many comments.

Seamus: No difficulties. I would have thought there would be a heightened awareness around those employees where you're in those dangerous circumstances of potential constructive dismissal. You will be aware of that and you'll take the appropriate steps.

Restrictive Covenants and Restraint of Trade

Q: I heard that an ex-employee in a non-managerial role recently started work for a former client who I suspect may have approached the employee prior to the departure from our company. Should we take legal action against this former employee, given that they are potentially in breach of a restrictive covenant in their contract of employment? Would we have to prove that the company has suffered a financial detriment as a result of this action?

Scott: Okay. We move on to, I suppose, an interesting and connected aspect here. We got a couple of questions on restrictive covenants in restraint of trade. They often go hand in hand, as you said, Seamus, with garden leave. First question, "I heard that an ex-employee in a non-managerial role recently started work for a former client who I suspect may have approached the employee prior to the departure from our company. Should we take legal action against this former employee, given that they are potentially in breach of a restrictive covenant in their contract of employment? Would we have to prove that the company has suffered a financial detriment as a result of this action?"

It wasn't really the case that they suffered that financial detriment, so if you're trying to stop somebody or sue them now that they're working there, is it worth it to really take a claim and go to high court and get an injunction?

Seamus: I think in these circumstances, probably the cost would outweigh the risk in terms of what we're seeing here. Really, that's the question that you have to look at for these sorts of scenarios that arise, looking at the circumstances that have arisen in assessing the risk, what is the risk of this employee?

If there's going to be a substantial—we're reading here that it's a non-managerial role, but usually, you would have thought further up the hierarchy in relation to senior management, that if their actions are in breach of restrictive covenants are going to cause a significant detriment to the business, whether it's the loss of a client or they're going to take a lot of staff with them or their suppliers or something like that, it could well be worth enforcement.

Just to give a bit of background in relation, I've done a number of these applications to the court whereby you are looking and seeking to enforce restrictive covenants. Essentially, what you're looking for is for injunctive relief, so these applications take place quickly and certainly, you're not delaying. If you delay it, a judge will be saying, "Why have you delayed so long?" And it will weaken your argument as to why you have to seek the injunction.

But they are expensive processes. The majority of them usually take place in the high court. You will get them in the county court as well. But they're quick-moving. You have to react quickly to them and usually, it does involve bringing on counsel and it's the drafting of affidavits and all of that.

The first thing that will happen is you will sit down and go through your restrictive covenants in detail. One of the cases that I had went through the county court. I remember that we moved in front of the judge. I remember the judge just picking complete holes the whole way through the client's restrictive covenants. They weren't adding up. They weren't marrying up. They were very restrictive in parts.

There were other aspects of it that didn't, really for territory and setting out the specifics that the detail wasn't in it. We very much came away from that saying we're going to have a problem here with enforcement. You do need to consider carefully in advance of deciding to take an application for injunctive relief and really have evidence as well.

A lot of steps are taken by employees, they're not really done out in the open and there are suspicions in behind by the employer and you need to be clear about the evidence. The first protocol is usually to write to the employee first of all and say, "We think you're at risk," or, "We know that you are and here are some undertakings that we want you to get legal advice on and sign to say that you won't." Then if they don't do that then, you're into the injunctive aspect of it.

Scott: But in this one here, chances are it's a non-managerial role. So, unless there's a very special skill, you used to get these things with hairdressers quite a lot because the hairdresser, they'd get a chair in a hairdresser's shop and they'd take all the customers and set up on their own or something like that or work from home. You'd try and do that. So, you do get specialist people, specialist skills.

Seamus: You do.

Scott: But ordinarily, you're talking about a senior executive or a partner in a firm and you're worried that they're going to take away your trade secret type of thing.

Seamus: Yes. Exactly.

Q: We have another former employee in a non-managerial role who started work for a company that we would consider to be a competitor. We included a non-compete clause in the contract of employment, which did not include a boundary or distance from our offices defining the restriction in place because we operate province-wide. Should we take action against this employee to prevent other employees from following suit or would this be deemed unreasonable?

Scott: The follow-up question here—we have another former employee in a non-managerial role who started work for a company that we would consider to be a competitor. So, there's a non-compete clause, I feel like.

Seamus: Yes.

Scott: "Although not located at the same time, we included a non-compete clause in the contract of employment, which did not include a boundary or distance from our offices defining the restriction in place because we operate province-wide. Should we take action against this employee to prevent other employees from following suit or would this be deemed unreasonable?" So, I suppose the issue here is it's difficult to see the reasonableness of a restriction—in this case, working for a competitor—if you're saying it's the whole of Northern Ireland.

Seamus: Yeah. It's not defined.

Scott: Where on earth is this person going to get employment? This is a restrictive thing. It's an anti-competition clause, effectively. So, if I'm trained to do a specific job and you stop me working for any competitor anywhere in Northern Ireland, it means I have to leave the country to get work. Courts are going to looking pretty askance at that.

Seamus: Yeah. There's a general principle from the courts that every man deserves to earn a crust. In my circumstances, you're talking about a non-managerial role and that you don't have your territory specified in relation to your boundary or your distance. I think for a non-managerial role in that sense, this is far too restrictive.

I don't think a court would have sympathy for the employer in terms of this. I think you'd be looking for a fairly tight and narrow definition in terms of your territory and really focusing down on the risks of what the business are. They have to be reflective and they have to be reasonable. So, I think in these circumstances, you would have problems going in front of the judge.

Scott: Okay. So, without plugging it too much, Seamus, I think the lesson there is if any of our listeners have restrictive covenant issues, they really should take legal advice because they have to be very tight, they have to be specific, and they have to be reasonable. If they're not any of those, then they're basically not worth the paper they're printed on, unless you're trying to scare people.

Sometimes you put them in just to try and scare people a little bit, but really, if you want them be effective, they've got to be properly drafted. Otherwise, you're going to lose before the court and it's going to cost you a lot of money and you'll have to pay costs for the other side. So, we don't want to do that.

Seamus: Absolutely.

Retirement and Fixed-term Contracts

Q: How many successive fixed-term contracts can be used post-retirement?

Scott: I think we're coming up to just about time, but we have one last quick question here and it's on retirement and fixed-term contracts. How many successive fixed-term contracts can be used post-retirement and is there a guideline as to how long these can be? For example, how do you sensitively gauge how long someone is able to continue work? I think this question, Seamus, came from one of our listeners in the Republic of Ireland, where it's fairly common—and indeed, there's legislation—on using fixed-term contracts to extend retirement where retirement age has been brought into the employment.

They still have to be justified. If it were to be used even in Northern Ireland, if you're looking to say, "Look, we're going to have some employees that are going to stay past the normal retirement age, both the normal retirement age and any extension would have to be justified in this jurisdiction as well."

Seamus: Yeah. Absolutely. It does beg the question in terms of if the role has been—if you're capable of extending and extending and extending it, it kind of makes a mockery of having the retirement age there, in any event. But as I'm sure all the listeners will be aware, there's no longer a statutory default retirement age in Northern Ireland. That's going back to April 2011.

You can only implement a retirement age if you can justify it. I would have thought if you're looking at enforcing that but then extending it, I think you do need to be careful. Certainly, I can understand circumstances where it could be extended and it might be, again, going to the needs of the business and the role that the person is doing.

Scott: But at the end of the process anyway, just like with any other extension there, the person, by definition, is old, then maybe there will be an age discrimination claim in there.

Seamus: Absolutely.

Scott: There may or may not be an unfair dismissal-type claim or a breach of contract-type claim in there.

Seamus: It's a hot pot.

Scott: I think sometimes what you do is extend it for someone coming up to retirement so they can train somebody and once that's done, that will be end. You're looking at something like that.

Seamus: Or a hand over period or something along those lines. But outside of that, I would have thought maybe you're creeping into a fairly risky area.

Scott: Okay. Thank you very much to Seamus. Thank you to everybody out there who's listening. If you want to send me questions for the next time on the 1st of February, then send them to Scott, scott@legal-island.com. We'll have a look at those questions and try and filter them in for the 1st of February. Don't forget, we have the other webinar, the case law review, with Mark McAllister in a couple of weeks on the 22nd of January.

You'll be able to listen back to this on the website in about an hour's time or so. Once we've got the transcription up, we'll break up all the questions and you can go around searching for specifics. That should be within about a fortnight or so. Thank you very much. Happy new year to you, once again. We'll see you again in about two or three weeks. Bye.

 

This article is correct at 11/01/2019
Disclaimer:

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Seamus McGranaghan
O'Reilly Stewart Solicitors

The main content of this article was provided by Seamus McGranaghan. Contact telephone number is 028 9032 1000 or email seamus.mcgranaghan@oreillystewart.com

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