Categories
Employment Injunctions

Board of Management Decision Quashed for Failure to Give Reasons for Dismissal of School Principal

This school principal went to the High Court to seek an order quashing the decision by the Board of Management of a national school from terminating her employment as a school principal and teacher.

The allegations against the school principal involved allegations of inappropriate behaviour towards two pupils, made against her by a special needs assistant. The school was a small one with only two teachers, including the principal.

The school principal had been dismissed in March 2018 and appealed the decision to the Disciplinary Appeals Panel. The Disciplinary Appeals Panel (DAP) recommended that the teacher be immediately reinstated to her position as principal. The Board of Management rejected this recommendation.

The teacher’s case to the High Court was that the investigation leading up to, and the decision to terminate her employment was fundamentally flawed and legally indefensible. The core of her argument, however, was that the failure by the Board of Management to give any, or any adequate, reasons for the decision to dismiss her was irrational and unreasonable.

She argued that there was no proper evaluation of the evidence against her, nor had she been told what allegations had actually been found as having been proven against her.

Thus, she argued that the decision was bad at law for having failed to giver reasons for the decision.

She also argued that the decision to ignore the recommendation of the DAP was bad at law having regard to the established case law as to the circumstances where a Board could lawfully depart from the recommendations of the DAP.

High Court Decision

The High Court, Barr J, held that the Board of Management had acted rationally and fairly in the investigation and disciplinary stage of the process.

Where it went wrong, however, was in engaging with the evidence against the Principal and deciding which, if any, allegations were proven against her. The Board had to engage with the evidence in a fair and rational manner and this could only be shown if they could give reasons for their decision.

They had failed to do this.

They also failed to give due regard to the recommendation of the DAP and there was no logical or constructive engagement with the DAP recommendation. For these reasons the High Court set aside the decision of the Board to terminate the Principal’s employment and quashed the decision.

You can read the full 50 page decision of Barr J here: C.D. and The Board of Management of a National School.

Categories
Employment Claims Employment Law Procedures and Policies

Hidden Cameras in the Workplace-European Court of Human Rights Approves in Certain Circumstances

Are you concerned about the use of cameras in the workplace? Hidden cameras?

If you are a recent European Court of Human Rights decision will disappoint and dismay you.

The case López Ribalda and others v Spain was an appeal from decision of the lower Chamber that the Convention for the Protection of Human Rights and Fundamental Freedoms had been breached.

Article 8 of the Convention provides for respect for the person’s private and family life:

Article 8 – Right to respect for private and family life

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

In this Spanish case five workers had brought a case to Europe that their right to privacy was breached when they discovered there was hidden surveillance cameras in their shop.

The footage gathered by the covert cameras formed the basis for the dismissal of the employees due to losses and theft in the business.

The European Court of Human Rights decided that the rights of the workers were not breached and there was “weighty justification” for the use of the hidden cameras.

The Court also stated that it was for individual states to decide on laws, if any, covering the topic of video surveillance in the workplace.

The legal principles involving video surveillance in the workplace

The court said that the principles set out in the Barbulescu v Romania case were the correct principles to apply when it came to video surveillance. These principles involve 6 questions:

  1. Has the employee been notified of the video surveillance?
  2. What is the extent of the monitoring?
  3. Are there legitimate reasons for the cameras?
  4. Are there less intrusive ways of achieving the employer’s legitimate objective?
  5. What are the consequences of monitoring the employee?
  6. Are there safeguards for the employee?

In the López Ribalda and others v Spain case the monitoring of the employees was at an area of the shop where the general public was being monitored-the checkout area-and it was not unreasonable to monitor such an area where the employee’s expectation of privacy would not be the same as, for example, in toilets or employee’s locker areas.

It was also noted that the surveillance only lasted 10 days and ceased as soon as the objective was achieved-this was to identify which employees were responsible for the theft and losses occurring.

It was accepted by the Spanish court, and the European court of human rights, that it would have defeated the purpose of the surveillance if the employees were advised about it in advance. Therefor the right of the employee to be told must be counterbalanced by the legitimate objective of the employer to find out who is responsible for theft.

The Court also decided that this right to be told was only one factor when the decision had to be made about the proportionality of the employer’s action was to be assessed.

Takeaway

  1. The employee’s right to privacy in the workplace is not absolute
  2. The employer’s action must be viewed in the light of the specific facts of the case and whether the steps taken by the employer were in pursuit of a legitimate aim and were necessary and proportionate.
Categories
Employment Injunctions The Employment Contract

3 Takeaways from the Ryanair V Peter Bellew High Court Case

The High Court case between Ryanair DAC and Peter Bellew is an important one because it gives us further guidance in the area of restrictive covenants in the contract of employment. A restrictive covenant is basically a covenant in a contract of employment preventing a departing employee from working for a competitor for a certain period of time after departing from his employment.

In Ryanair DAC the airline sought to prevent Mr Bellew from working for a competitor in any capacity for a period of 12 months after leaving Ryanair. This was what Mr Bellew had signed up for when he signed his contract of employment.

Ryanair sought to prevent him from taking up employment with Easyjet and sought an injunction in the High Court to enforce the covenants in his contract of employment with Ryanair. One of those covenants was as follows:

For a period of 12 months after the termination of your employment you shall not, without the prior written consent of the Company, directly or indirectly in any capacity either on your own behalf or in conjunction with or on behalf of any other Person;

a. be employed, engaged, concerned or interested in any capacity in any business wholly or partly in competition with the Company for air passenger services in any market;

b. solicit or entice or endeavour to solicit or entice away from the Company any person who was employed within in (sic.) a senior executive, managerial, or technical capacity by the Company.

1.2 If you receive an offer of employment or engagement during your employment with the Company, or before the expiry of the restriction period set out in this clause, you shall give the person or entity making the offer a copy of this clause.

The defendant in this matter fully admits that he freely signed the covenant and at the time of signing he fully understood its meaning and purpose but makes the case that he is not bound by said covenant.

The case law in this regard provides to be useful and instructive as to the approach adopted by the Irish Courts in relation to restrictive covenants.

Macken v. O’Reilly 1979 I.L.R.M 79

Although this case is not as recent as the case law outlined in the rest of this article, the holding of the court in relation to the matter at hand is helpful. A synopsis of this could be read as follows all interference with a person’s freedom of action to trade is contrary to public policy and therefore are void. Generally, this is the case, however it has opined in some case law if the restriction is justified by reasonableness and necessity to serve public interests, such as instances involving trade secrets or confidential information the restriction may be allowed and held as binding.

Murgitroy & Company Ltd v. Purdy 2005 IEHC 159

This a much more recent decision where the Chief Justice Clarke J. outlined that a restrictive term will not be implemented unless it satisfies the limbs of the following test

  1. The restriction is reasonable between the parties
  2. The restriction is consistent with the interests of public policy

The facts of Murgitroy are as follows. A restrictive covenant in a contract of employment restricted a Patent Lawyer from working in same sector for a period of twelve months in the Republic of Ireland. Clarke CJ.  Found the restriction in relation to the geographical nature (not working in Ireland) and the length of the restriction was reasonable and justified based on the nature of the employers business. However Clarke J. found that the result of allowing the aforementioned restrictions would create another, being the restriction to approach clients who are not pre-existing clients of the employer from being engaged by the ex-employee was too restrictive. The position of this case was affirmed in the more recent example of Net Affinity v Conaghan 2012 3 I.R 67.

Stenhouse ltd v. Philips 1974 A.C 391

The covenant entered into needs to be reasonable between the parties. The holding of this case outlines that the restriction sought must be a reasonable one and cannot restrict an employee from using his skill and knowledge in future endeavors. However, the employer can restrict the employee from using assets or ‘insider knowledge’ that must be regarded as company property.

This becomes especially necessary when discussing trade secrets/ confidential information or market sensitive information. Any property or assets of the company that the employee is leaving must be protected by restrictive covenant because it is essentially, company property. Even if the employee may have contributed to the ‘company property’ the employer will still be granted protection for what is ultimately their property.

However, with regard to skill, knowledge and essentially the employee’s property, no restrictive covenant can restrict this movement. It must also be noted that if an employer is seeking to enforce a restrictive covenant simply to protect himself from mere competition, this will not be allowed.

in the Ryan Air case, Allen J. opined that that covenants are generally never reasonable unless if the competition was allowed it would take advantage of the employers trade position.

The High Court also looked at Hernandez v. Vodafone Ireland LTD 2013 IEHC 70 andTillman v Egon Zehnder Ltd from the United Kingdom Supreme Court.

High Court decision

The High Court recognized the difficulty in practice of enforcing a confidentiality clause and referred to Lord Denning in Littlewoods Organisation Limited v Harris [1978]

It is thus established that an employer can stipulate for protection against having his confidential information passed on to a rival in trade. But experience has shown that it is not satisfactory to have simply a covenant against disclosing confidential information. The reason is because it is so difficult to draw the line between information which is confidential and information which is not; and it is very difficult to prove a breach when the information is of such a character that a servant can carry it away in his head. The difficulties are such that the only practicable solution is to take a covenant from the servant by which he is not to go to work for a rival in trade. Such a covenant may well be held to be reasonable if limited to a short period.”

The High Court had a difficulty with whether the restraint that Ryanair sought went further than was necessary for the legitimate protection of its interests. It had no difficulty, interestingly, with the time period of 12 months.

It noted that it could, if the circumstances permitted, use the “blue pencil rule” to remove an unenforceable provision if the character of the contract was not changed as a consequence. However, the covenant in this case applies to “any business wholly or partly in competition with Ryanair for air services”.

With considerable reluctance, but without misgivings as to the applicable law, or my application of the law, I am driven to the conclusion that the clause is void and unenforceable as an unjustified restraint of trade. 195. The other provision of the restraint in this case which troubled me was the prohibition on employment in any business in competition with Ryanair “in any capacity”. It appeared to me that literally construed it would restrain Mr. Bellew from taking up employment with another airline as a pilot or air steward.

208. I find that the plaintiff has discharged the onus of proving that it had a legitimate interest in exacting a covenant from the defendant to protect the valuable sensitive and confidential commercial, operational and financial information that would come to the defendant’s knowledge in the course of his employment. For the reasons given, I find that that interest has not been shown to extend beyond those airlines in competition with the plaintiff in the low cost or low fare sector, to those airlines operating in the legacy or flag or high cost sector.

209. I find that the covenant in this case, properly construed, would prevent the defendant from taking up employment with any European airline, including the legacy carriers, and so goes beyond what the plaintiff has shown to be justified.

210. The legitimate interest of the plaintiff in restraining the defendant from taking up alternative employment is limited to roles which would risk the disclosure or use of its protectable information. I find that the restraint on employment in any capacity goes beyond that interest and has not been shown to be justifiable.

211. For the reasons given, I find that the covenant to which the defendant, for valuable consideration, freely agreed is, as a matter of law, void and unenforceable as an unjustified restraint of trade.

Conclusion

Ryanair DAC were refused their injunction because the High Court found

  1. The restraint preventing the departing employee from working “with any European airline” went beyond what was justified
  2. The restraint preventing Bellew from taking up employment “in any capacity” goes beyond the legitimate interest of Ryanair and was not justifiable.

For these reasons the High Court decided the covenant was void and unenforceable and an unjustified restraint of trade.

Takeaway for employers

  1. Employers need to understand that any restrictive covenant is drafted to reflect the specific relationship between employer and employee in any particular circumstance and a “one size fits all approach” runs the risk of being found unenforceable. If it goes too far and is too wide it is unlikely be justified as being necessary to pursue a legitimate interest.
  2. Twelve months, as a temporal restraint, is acceptable and unproblematic.
  3. Confidentiality clauses, whilst necessary and acceptable, are difficult to enforce in practice as confidential information can be used and abused without any evidence of the breach-for example in negotiating terms with competitors.

Read the full decision here: Ryan Air DAC v. Peter Bellew 2019 6239 P , Decided 23rd December 2019.

Categories
Employment Law Books

Kindle Countdown Deal on “Employment Law in Ireland” Kindle book

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It’s a good deal and this book sells well anyway but Amazon lets authors promote their book every 6 months with a Countdown deal like this and it is very effective.

You can learn more about the book here.

I am really doing this promotion for the reviews, quite frankly, so if you do avail of the deal I would be delighted and thankful if you would leave an honest review on Amazon for it. It gives great encouragement and helps sell the book.

Categories
Employment Claims The Employment Contract

Was Doctor an Employee or Self Employed Contractor?

Employee or self employed?

This was the case of a medical doctor with his own practice who claimed he was an employee in respect of his work for a training provider.

This is a common issue: whether an individual was an employee or was self-employed, notwithstanding the statement in a contract that the individual was not an employee.

All employment claims will depend on the claimant being an employee. If the claimant falls at this hurdle any other claims-for example terms of employment or unfair dismissal-will not be heard.

This case involved a medical practitioner who provide training services for the respondent and brought a claim under the Terms of Employment (Information) Act, 1994 seeking a written contract of employment. He had received a contract dated April 1st 2006 which described his position as being ‘an independent contractor’ and stated that he ‘shall not be an employee’ of the respondent.

The first question that arose, therefore, was whether the complainant was an employee or an independent contractor.

The WRC Adjudication Officer noted that there is no one test to determine whether a person is engaged on a contract of employment (contract of service) or on a contractor contract (contract for services).

The AO referred to a UK case in which a number of tests were set out as follows:

1)      Does the person performing the services supply his own equipment?

2)      Can he hire his own helpers?

3)      Does he carry any financial risks and to what extent?

4)      What opportunity does he have to make a profit?

5)      To what extent does he carry the responsibility for investment/management.

He referred also to the Revenue Commissioners approach and their tests to determine employment or self-employment as follows:

1)      Is under the control of another person who directs as to how, when and here the work is to be carried out,

2)      Supplies labour only,

3)      Received a fixed wage

4)      Cannot subcontract the work

5)      Does not supply materials for the job

6)      Does not provide equipment other than small tools of the trade

7)      Is not exposed to personal financial risk in carrying out the work

8)      Works set hours or a given number of hours

The AO was satisfied that the complainant in this case, a medical doctor, satisfied the tests of the Revenue Commissioners. In short it was recognised that the complainant received a fixed and regular income, was fully integrated into the respondent’s activity, and satisfied the other tests of the Revenue Commissioners.

The respondent in this case sought to connect the fact that the complainant was also involved in other self-employed work-as a GP in his own general practice-and was paid a locum allowance to undermine the argument that he was an employee. However, the Adjudication Officer did not accept this argument and said it had ‘no merit’.

“I do not accept therefore that the payment of a locum allowance, whatever the recipient chooses to do with it, affects or alters the substance of the employment relationship between an employee and an employer which must be considered by reference to the tests set out above.”

He also found

In Hall (Inspector of Taxes v Lorimer [1994] IRLR 171 the court endorsed an explanation approved by the lower court (whose judgement was on appeal to it);

‘In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a checklist to see whether they are present in, or absent from a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details.’

The Adjudication Officer had no hesitation in finding that the complainant was an employee and was entitled to be given a written statement of his terms of employment, in accordance with the Terms of Employment (Information) Act 1994.

However, the Adjudication Officer did not consider it ‘just and reasonable’ to make any order for compensation retrospectively as the ‘current respondent whose breach of the Act arises for the first time as a consequence of the finding in this case’. He did order that a statement of terms of employment be given to the complainant.

This decision was issued on 18th December 2019 and you can read the whole decision here. It is a useful reminder of the tests which will be applied to determine the issue of employee versus independent contractor.