[**

](http://www.linkedin.com/in/mbsconsultancy)*[Mark Shulman, Consultant Solicitor, Keystone Law*

](http://www.keystonelaw.co.uk/solicitor.php?search=p_t&id=217)**EMPLOYMENT STATUS

**Was a former member of an LLP an employee?
No said the Court of Appeal on the facts of [Tiffin v Lester Aldridge [2012] EWCA Civ 35]()**. Although it will always be necessary to look at the facts in any specific case, it is more likely that an LLP member will be a partner if he or she:-

* has a share of the profits dependent on the actual profits for the financial year; * is required to make a capital contribution; * has some voting and management rights; * has rights to income and benefits that are distinct from those offered to employed staff (e.g. health or life assurance benefits); * has signed a members agreement and is not described as an employee in it; * pays national insurance contributions as a self-employed person; * has some entitlement to a proportion of the surplus assets on a winding up of the business.

**What are the key elements required for a person to be classed as a worker?
**Under section 230 of the Employment Rights Act 1996 a worker is:-

"... an individual who has entered into or works under (or where employment has ceased, worked under) –

(a) a contract of employment

(b) any other contract, whether express or implied, and (if it is express) whether oral or in writing, whereby an individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of that contract that of a client or customer of any profession or business undertaking carried on by the individual."

The case of [Singh v The Members Of The Management Committee Of The Bristol Sikh Temple And Others UKEAT/0429/11/ZT]() serves as a reminder of the general tests that need to be satisfied when consider worker status. Some key practical points which emerge from the case are:-

* when considering whether there is a contract under which services are performed personally in return for remuneration, the fact that such remuneration is made from voluntary donations is not necessarily inconsistent with a contractual obligation to pay the person providing services; * the provision of benefits in kind such as the provision of free accommodation can form part and parcel of the arrangements with the person providing services such that there is an obligation giving rise to a contract; * even if the person providing the services is an office-holder, this is not inconsistent with the existence of a contract personally to provide services: (see Percy v Church of Scotland [2006] ICR 134; * even if there is the power to recommend a substitute to provide the services, this is not inconsistent with a contract to perform services personally unless the right not to do so is unfettered (Yorkshire Window Co. Ltd v Parkes [2010] UKEAT/0484/09.

JURISDICTION

**Can a British employee working in Libya claim unfair dismissal?
The leading case of Lawson v Serco Ltd [2006] UKHL 3** confirms that the jurisdiction of Employment Tribunals extends to:

* employees working in Great Britain; * peripatetic employees where the employee is 'based' in Great Britain; and, * in some exceptional cases, expatriate employees.

But what is the position of individuals who are resident in Great Britain and employed by a British company but who travel to and from home to work overseas? Such employees do not fall within any of the three categories above.

In [Ravat v Halliburton Manufacturing and Services Limited [2012] UKSC 1](), a British citizen living in Preston was employed by a UK company and at the time of his dismissal was working in Libya. Did a Tribunal have jurisdiction to consider his complaint of unfair dismissal?

Yes said the Supreme Court. The starting point for jurisdiction is that the employment relationship must have a stronger connection with Great Britain than with the foreign country where the employee works. The Court held that Mr Ravat could pursue his complaint because:

* the employer's business was based in Great Britain; * he was treated as a commuter with benefits for which he would have been eligible had he been working in Great Britain; * he was  assured  that  UK employment law would apply to his contract and the termination of his employment was handled by the HR department in Aberdeen under British employment law.

**PRACTICE AND PROCEDURE
Can there be an appeal to the EAT only in relation to a judicial decision?
**Section 21(1) of the Employment Tribunals Act 1996, provides that:-

"An appeal lies to the Appeal Tribunal on any question of law arising from any decision of, or arising in any proceedings before, an Employment Tribunal...."  (emphasis added).

In [Paw v HMRC UKEATPA/0705/11/DA and UKEATPA/0715/11/DA](), the EAT decided that this statutory provision is very wide and includes:-

* an appeal against an omission or an unreasonable delay (where by definition there is no judicial decision); * an allegation of actual or apparent bias ; and * issues concerning automatic disqualification for having an interest in imminent or current proceedings, before any adverse decision is made.

All of these matters can fall within the scope of an appeal if they are "arising in any proceedings".

ILLEGALITY

**Can workers pursue contractual employment rights when they enter the UK illegally?
No said the EAT in [Zarkasi v Anindita & Anor UKEAT/0400/11/JOJ]()**.

A domestic worker from Indonesia who had voluntarily entered the UK on false documents pursued various Tribunal claims which depended upon there being a contract of employment. She contended that she was a victim of human trafficking and that the Council of Europe Convention on Action against Trafficking in Human Beings applied. She argued that the Tribunal should provide remedy irrespective of any concerns about illegality i.e. that the Convention trumped any illegality.

The EAT ruled that a court should not, as a matter of public policy, permit a party to enforce a contract that was always illegal. There is no discretion to rule a contract lawful where clearly it was not.

However, an illegal contract will not necessarily prevent the employee from pursuing a discrimination claim under the Equality Act 2010. Such a claim will only be barred where it is so clearly connected or inextricably linked with the employee's illegal conduct that the Tribunal could not permit the employee to recover compensation without appearing to condone that conduct (Hall v Woolston Hall Leisure Ltd [2000] IRLR 578.

RESTRICTIVE COVENANTS

**In the context of restrictive covenants, what constitutes "soliciting"?
In [Towry EJ Ltd v Bennett & Ors [2012] EWHC 224 (QB)]()** the High Court's judgment reviews the current law and authorities underpinning restrictive covenants and many other issues.

We are reminded that the concept of 'solicitation' is not easy to define. There can still be solicitation where it is the customer who first contacted the ex-employee. Some examples are:-

* where the customer telephones the ex-employee asking what they will be doing after employment. If the ex-employee informs the customer that they will for instance, be trading from a particular address in the same line of business as the ex-employer, it is questionable whether that would amount to solicitation; * an offer by a former employee to make a sales presentation, could constitute solicitation; * where the gist of what the ex-employee says is responsive to the customer's enquiries, there will be no solicitation; * significant use of persuasion by the ex-employee is likely to be seen as soliciting.

In order to avoid the practical difficulties of proving customer solicitation by an ex-employee, it is often advisable for employers to consider obtaining a non-dealing covenant.

EMPLOYEE DUTIES

**What is an employee bound to do under their duties of fidelity and good faith?
This extensive judgement of the High Court in [QBE Management Services (Ltd) v Dymoke & Ros [2012] EWHC 80 (QB)**]() covers issues of fidelity, fiduciary duty, and the use of confidential information. The general principles relating to employees duties of good faith and fidelity can be summarised as follows:

* the extent of the contractual duty of fidelity will depend on the facts of each case;
the more senior the staff the greater the degree of loyalty, fidelity and diligence required; * 'preparatory' activities to competition are not necessarily legitimate;
it is a breach of the duty of fidelity for an employee to recruit or solicit another employee to act in competition; * attempts by senior employees to solicit more junior staff constitutes serious misconduct; * misuse of confidential information belonging to the employer will be a breach of the duty of fidelity; * when considering whether there is a breach of duty it is necessary to look at the activities in which the employee is engaged and whether those activities affect his or her ability to serve their employer faithfully and honestly and to the best of their ability.

In the context of 'team moves'', four recent cases provide useful guidance about what may constitute illegitimate conduct by employees:-

* diverting business opportunities and misusing confidential information when former employees set up a competing business, (Shepherd Investments Ltd and Anr v Walters & another [2006] EWHC 836 (Ch); * keeping silent when knowing of planned poaching raids upon the company's existing staff or client base (UBS Wealth Management v Vestra Wealth LLP [2008] IRLR 965; * failing to divulge that senior employees (including oneself) may transfer their allegiance to a group of companies which includes a competitor (Kynixia v Hynes [2008] EWHC 1495 (QB); * a desk head assisting the recruitment of his desk to a competitor (Tullett Prebon plc v. BCG Brokers LP [2010] IRLR 648.

Mark Shulman is an employment solicitor offering freelance consultancy to law firms and dispute resolution through workplace mediation. For further details see his LinkedIn profile.