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PRACTICE NOTES
This Practice Note examines the concept of ‘reasonableness’ in the context of specific types of employment post-termination restrictions (restrictive covenants), eg area restrictions and non-compete clauses, non-solicitation, non-dealing and no-poaching (no-employment) clauses. As a post-termination restriction constitutes a restraint of trade by agreement, it will, even if it is properly incorporated into an employment contract (see Practice Note: Incorporation of post-termination restrictions, be contrary to public policy, and therefore unlawful, unless: • the person or entity seeking to enforce the restraint has a legitimate business interest to protect, and • the restraint is reasonable as between the parties and is in the public interest For further guidance on restraint of trade in the employment context generally, see Practice Note: Restraint of trade in employment. For further guidance on legitimate business interest, see Practice Note: Legitimate business interest. Reasonable as between the parties For a restraint to be reasonable in the interests of the parties it must afford no more than adequate protection to the party in whose favour it is imposed. Reasonableness as between the parties does not
PRACTICE NOTES
This Practice Note examines the concept of severance and when it will be applied in relation to a post-termination restriction (restrictive covenant). It considers the ‘blue pencil’ test and sets out examples of cases where severance has, and has not, been permitted. In order to be enforceable, the terms of a post-termination restriction must do no more than the minimum necessary to protect the legitimate business interests of the employer (see Practice Note: Legitimate business interest). The restriction will be unenforceable if it does more than the minimum necessary (see Practice Note: Post-termination restrictions—reasonableness: Reasonable as between the parties) and is, for example, too wide in terms of its geographical ambit or duration. The courts are not permitted to re-write a restriction so that it becomes reasonable and therefore enforceable. Some employers include provisions in contracts of employment to the effect that if the ambit or duration of a restriction is unreasonable, then it may be reduced as necessary so as to render the restriction enforceable. Such provisions are, however, generally ineffective. Although the courts are unable to re-write
PRACTICE NOTES
This Practice Note examines the nature of a repudiatory breach by the employer of a contract of employment, and the effect of such a breach on the enforceability of post-termination restrictions (ie restrictive covenants) contained in that contract. A repudiatory breach of contract by the employer will usually mean that any express post-termination restrictions are not enforceable by the employer. Repudiatory breach What is required for there to be a repudiatory breach of a contract of employment by an employer is discussed in Practice Note: Constructive dismissal. Essentially, a repudiatory breach will be one that is a significant breach going to the root of the contract of employment, or one that shows that the employer no longer intends to be bound by one or more of the essential terms of the contract. If the contract is terminated by the employee accepting that repudiatory breach, the termination is usually referred to as a constructive dismissal. Dismissal by an employer without giving the period of notice required by the employee’s contract of employment, ie wrongful dismissal,
NEWS
Law360: The director of a postage company was sentenced to four years in prison at a London court on 8 February 2024 while his conspirators avoided jail over their roles in stealing £70m from Royal Mail by under-declaring bulk mail.
GLOSSARY
“Postal data” means data which— (a) identifies, or purports to identify, any person, apparatus or location to or from which a communication is or may be transmitted, (b) identifies or selects, or purports to identify or select, apparatus through which, or by means of which, a communication is or may be transmitted, (c) identifies, or purports to identify, the time at which an event relating to a communication occurs, or (d) identifies the data or other data as data comprised in, included as part of, attached to or logically associated with a particular communication. For the purposes of this definition “data”, in relation to a postal item, includes anything written on the outside of the item.
GLOSSARY
“Postal item” means— (a) any letter, postcard or other such thing in writing as may be used by the sender for imparting information to the recipient, or (b) any packet or parcel.
GLOSSARY
“Postal operator” means a person providing a postal service to persons in the United Kingdom.
NEWS
Corporate Crime analysis: Mr Winder was arrested, interviewed and released pending further enquiries and then charged by postal requisition with offences under section 127 of the Communications Act 2003 (CA 2003). He unsuccessfully attempted to persuade the district judge that he had been charged out of time. The appeal was brought after Mr Winder had indicated a guilty plea but not entered that plea. The High Court decided it had no jurisdiction for the court to consider an appeal by way of case stated at an interlocutory stage of proceedings but agreed to treat the hearing as a judicial review. The court held that the district judge had been correct to conclude that for the purposes of the legislation the prosecutor was the crown prosecution service (CPS) not the police and that the proceedings were therefore issued in time. Written by Kate Bex QC, barrister, at Red Lion Chambers, London.
GLOSSARY
“Postal service” means a service that— (a) consists in the following, or in any one or more of them, namely, the collection, sorting, conveyance, distribution and delivery (whether in the United Kingdom or elsewhere) of postal items, and (b) has as its main purpose, or one of its main purposes, to make available, or to facilitate, a means of transmission from place to place of postal items containing communications.
GLOSSARY
A 'posted worker' is a worker who: • normally works in one EU Member State, but • for a limited period carries out their work in another Member State
PRACTICE NOTES
ARCHIVED: This archived Practice Note examines the Posted Workers Directive, 96/71/EC (PWD) in the context of cross-border, international and jurisdictional issues. The PWD no longer applies to workers posted to the EU from the UK, or posted from the EU to the UK, on or after 1 January 2021. The Practice Note: • outlines the impact of Brexit on this topic (see: Brexit impact, below) • outlines the issues to be considered when posting a worker on after that date (see: Posting workers from 1 January 2021, below) The remainder of the Practice Note considers the position before 1 January 2021, and is retained for reference. Brexit impact From exit day (31 January 2020) the UK ceased to be an EU Member State but, in accordance with the transitional arrangements provided in the Withdrawal Agreement, the UK was in an implementation period (IP) until 11pm on 31 December 2020, known as ‘IP completion day’. During this period, the UK continued to be treated by the EU as a Member State for many purposes.
PRACTICE NOTES
Directive 96/71/EC concerning the posting of workers in the framework of the provision of services, the Posting of Workers Directive or PWD, which entered into force in the early 90s, still gives rise to significant debate. The reason is simple: posting of workers represents a ‘zone of exception’. As explained by some authors, in the context of the free movement of workers, the principle of equal treatment applies to mobile workers, who cannot be treated differently than domestic workers. However, the provisions on working conditions and social security of posted workers constitute an exception to this principle. This has caused concerns regarding possible unfair competition and negative impact on labour and social rights. Directive (EU) 2018/957, which has amended the PWD, has addressed unfair competition and race to the bottom in the field of labour, even though the text may have not provided the clarity it aimed for. Directive 2014/67/EU on the enforcement of the PWD was adopted to improve the practical application of the PWD by enhancing the