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UK: Jurisdiction: Court considers the territorial scope of UK collective redundancy consultation rights

An employer that fails to comply with these consultation obligations may be ordered to pay each employee a protective award of up to one week’s pay for each week of the 90 day period. The affected employees, their unions or representatives can bring a claim (although where a union is recognised, they must bring the claim in the first instance).

A Guernsey registered company employed crew which it supplied to specialist ships owned and operated by other companies. A UK company dealt with employee administration. The crew, who were UK domiciled, were stationed all over the world for 4-6 weeks at a time and would return home at the end of each trip, but then tended to return to the same vessels in the same locations.

Four ships were taken out of service, so the crew working on those ships were no longer needed and more than 20 crew members were made redundant without following collective consultation rules. The trade union that had collective bargaining rights in respect of the employees brought claims for protective awards for failure to inform and consult with the UK domiciled employees.

The EAT could see no reason for making a distinction between collective and individual redundancy rights and confirmed that the territorial reach applicable to individual redundancy rights was also applicable to collective redundancy rights.

Factors the EAT considered were relevant to whether the crew members had a sufficiently strong connection to Great Britain included:

• they were domiciled in the UK
• their employment contracts were stated to be governed by English law
• the employer used a UK registered company to manage the employees

The redundancies were over four different ships and less than 20 crew members would be lost on each ship. This raised the question as to whether each ship was a separate “establishment”, so that the obligation to inform and consult, which is triggered when dismissing “as redundant 20 or more employees at one establishment” within a 90 day period, could be avoided. The EAT concluded that all of the ships in the fleet had to be considered together, forming one establishment as although generically, individual ships are capable of being establishments, in this case, each ship could not be said to be a distinct part of the employer’s undertaking. The following factors were taken into account:

– some employees were not attached to a particular vessel and transferred between them; and
– the UK administrator treated the employees as a group rather than in relation to each ship.

This case clarifies that individual employees working outside the UK who have a sufficiently strong connection with the UK, may have the right to be collectively consulted if their employer proposes to dismiss as redundant 20 or more employees at any one establishment, anywhere in the world, within a 90 day period. When considering whether an employee will have jurisdiction to bring an employment claim in the UK, the most important factor is whether the employee has ‘a strong connection to Great Britain’.

Seahorse Maritime Ltd v Nautilus International (A Trade Union) UKEAT/0281/16/LA

For more information, please contact L&E Global.

UK: Whistleblowing: Court gives guidance on the factors to take into account in assessing whether a whistleblower’s disclosure meets the ‘public interest’ requirement.

The Claimant had complained to his employer, Chesterton estate agents, that it was deliberately misstating its accounts, the effect of which was to lower his and some 100 or so other senior managers’ commission earnings. Following that disclosure, he was dismissed, which led him to bring a claim for automatically unfair dismissal under whistleblowing legislation.

Under current whistleblowing rules, a worker’s disclosure is only protected if they reasonably believe it is made in the public interest. The question this case raised is whether a whistleblowing disclosure can be said to be in the public interest if it concerns only the personal complaint of that worker and affects only a small and limited section of the employer’s workforce.

The Court of Appeal found that the disclosure about misstating the accounts was in the public interest because, although personal to the Claimant, the disclosure was of a deliberate wrongdoing and it allegedly took the form of misstatements in the accounts to the tune of £2-3million.

The Court observed that if the accounts had been statutory accounts, even of a private company, the disclosure of such a misstatement would unquestionably be in the public interest. The accounts were only internal accounts which made the position less black and white. Nevertheless, the Court observed that internal accounts fed into the statutory accounts and Chestertons was a very substantial and prominent business in the London property market.

The question of whether a disclosure is in the public interest depends on the character of the interest served by it rather than simply the number of people sharing it. The Court of Appeal gave useful guidance on factors to be taken into account in determining the public interest element, which include: the number of people affected, whether the subject of the disclosure is important or trivial, whether the wrongdoing was deliberate or inadvertent and the identity of the wrongdoer: the larger or more prominent the wrongdoer (in terms of the size of its relevant community, i.e. staff, suppliers and clients), then the more obviously a disclosure about its activities will engage the public interest.

Chesterton Global Ltd & Anor v Nurmohamed & Anor [2017] EWCA Civ 979

For more information, please contact L&E Global.

Sweden: A salesperson in breach of a non-competition clause was imposed interim security measures to cease a contractual breach

The case concerned whether an employer had grounds for a demand for interim security measures against a formerly employed salesperson who, despite a non-competition clause in the salesperson’s employment agreement, had taken employment with a competitor. The salesperson claimed that the non-competition clause was unreasonable and should be declared void.

The Labour Court found that the salesperson had access to trade secrets due to his specialised position with the former employer and that the employer had a justified interest to protect the trade secrets. The Court also found that interim security measures were both necessary and proportional since the salesperson had joined the employer’s main competitor and that there were no other effective means for protection. The Court therefore found that further breaches of the non-competition clause by the salesperson would result in a liability to pay a penalty of SEK 500,000.

For more information, please contact Cederquist our affiliated member firm in Sweden.

Norway: Norwegian citizen fired from Swiss company –Norwegian law applicable

A Norwegian citizen with British origin worked for a Swiss company, but was located and preformed his work tasks in Norway. The employee was fired from the Swiss company, and filed a case against the company to the district court in Norway. The parties agreed that the dispute had to be solved in Norwegian courts. The district court found that Norwegian law regulated the employment contract. The Swiss company appealed the decision, and the appeal court denied the appeal. The appeal court concluded that the case according to the Rome 1 Regulation (Regulation (EC) No 593/2008) was governed by Norwegian law. It was clearly stated in the employee’s contract that it was regulated by Swiss law. However, The Rome 1 Regulation section 8 nr.1, states that if a law is chosen in an individual employment contract, such choice of law may not have the result of depriving the employee of the protection afforded to him by a provision that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable pursuant to paragraph 2, 3 and 4 of the regulation. According to the Rome 1 Regulation section 8, paragraph 2, if the parties have not agreed to a specific law, the law of the country from which the employee habitually carries out his work in performance of the contract is applicable. The employee had carried out his work in Norway, and the employment contract would then, if not otherwise agreed, have been regulated by Norwegian law. The appeal court found that the employee was better protected according to Norwegian law than according to Swiss law in the case regarding the dismissal. The Norwegian law that regulates the employee’s rights when given a dismissal could not have derogated from in this case if Norwegian law was applicable. The court thus came to the conclusion that Norwegian law was applicable in the case.

For more information, please contact Storeng, Beck & Due Lund (SBDL) our member firm in Norway.

Norway: Store manager fired for making false claims for compensation for her private purchases of company products

An employee was dismissed with immediate effect from her position has a store manager in a convenience chain. The appeal court found the dismissal to be just. The employee had misused her position to make false claims for compensation after she had made private purchases of company products. The products did not have flaws, and the employee had no legal grounds to ask for compensation. The appeal court, similar to the district court, concluded that it was highly probably that the employee had made a severe breach of duty.

For more information, please contact Storeng, Beck & Due Lund (SBDL) our member firm in Norway.

The Netherlands: Dutch Court rules against Employee using Social Media to Harm his Employer

The employee has been employed with the employer since 2001 in the position of ‘employee information’ and, in connection with this function, has contact with clients and guests, including writers, is co-responsible for the image of the employer and uses social media. On February 7, 2017, an incident occurred on Facebook where the employee was involved. The employer requests the court to terminate the employment contract. The employer states that multiple writers are offended and threatened by the employee on Facebook. Also, the employer has already warned the employee before about the use of social media.

In the opinion of the District Court, the facts and circumstances stated by the employer provide a reasonable ground for termination. The employee has provided information in a socially harmful manner for the employer, explicitly expressing himself as an employee of the employer. In doing so, he has used unusual language in the direction of an important target group, namely: writers, of which the employer depends on, to a large extent. It is also of importance that the employee has again been mistaken and even used texts that the recipients experienced as threatening and caused fury in a wider context. Furthermore, this mode of operation via social media is also contrary to the internal rules applicable to the employer, which, in the opinion of the judge, have been adequately disclosed to all employees. At the hearing, the employee did not convincingly demonstrate the fact that he sees the seriousness of his behaviour and damages to the image of the employer. Therefore, the court ruled that the employer rightly claimed to have lost confidence in the employee so that there is now an impaired employment relationship, which justifies the termination of the employment contract. However, according to the court, there is no reason to deny the transition payment, since the employer did not succeed in showing that the actions of the employee were seriously culpable.

For more information, please contact Palthe Oberman our member firm in Netherlands.

Italy: Surfing the internet at the workplace leads to lawful dismissal

Through Court ruling no.14862/2017, the Court of Cassation held that a continuous and repeated use of the company’s devices to surf the internet for reasons which do not concern the job, openly violates the most basic obligations of fairness and good faith and, therefore, justifies dismissal.

The Court made it clear that no breach of the privacy law could be found in the current case, since the company had simply verified the existence of undue accesses to the internet and the related connection times, without making any analysis of the websites visited by the employee.

In the Court analysis, the traffic connections cannot even constitute “personal data“, because they do not show any political, religious, cultural, sexual preferences or attitudes of the user.

For more information, please contact LABLAW – Studio Legale our member firm in Italy.

Germany: A contractual clause stipulating a probationary period has to be precise regarding the applicable notice period

German employment contracts often stipulate a probationary period. Under German law, the minimum statutory notice period during such probationary period is 2 weeks. This is shorter than the minimum statutory notice period to be observed outside of a probationary period.

In the case before the Federal Labout Court, the employment contract stipulated that a probationary period of 6 months is agreed. It did not stipulate any specific notice period for this time. The contract only included a general provision on the notice period, without specifying that this notice period shall only apply after the end of the probationary period.

The Federal Labour Court ruled that the contractual notice period also had to be applied during the probationary period and the employer could not apply the minimum statutory notice period for probationary periods. Doubts and contradictions regarding pre-formulated contractual clauses are to be borne by the employer. Here, the employment contract did not make it sufficiently clear that the employer wanted to apply a shorter notice period during the probationary period. Therefore, the contractual notice period had to be applied from the beginning.

For more information, please contact Pusch Wahlig Legal our member firm in Germany.

Germany: The Federal Constitution Court confirmed that the Tariff Unity Act is in line with the German constitution to a large extent

The Tariff Unity Act (“Tarifeinheitsgesetz“) provides that in case several collective bargaining agreements apply in one establishment, the agreement concluded with the union that has the highest number of members among the employees in the establishment shall prevail. Smaller unions also represented in the establishment are then only entitled to take on this same agreement for their members. The law was challenged by several trade unions. The ruling of the Federal Constitution Court, holding that the Tariff Unity Act is in line with the German constitution to a large extent, is a major setback for trade unions representing small but important key personnel within companies, such as pilots, air traffic controllers or train drivers.

Such unions will face significant limitations, e.g. regarding the right to initiate a strike, as long as there is another union represented in the establishment with a higher number of members. Companies will more often be in the position to deal with only one union and effectively rely on the peace duty once a collective bargaining agreement has been concluded.

For more information, please contact Pusch Wahlig Legal our member firm in Germany.

France: Working for a competitor during paid holidays is serious misconduct

During his paid leave, an employee remains bound by an obligation of loyalty towards his employer. He may not engage in any activity that competes with that of his employer. The French Supreme Court (Cour de Cassation) has just recalled this principle regarding an employee, a team leader who is a point of contact for his colleagues, who during his paid holidays exercised duties identical to those he held in his company, but on behalf of a directly competitive company. In addition, the latter company operated in the same sector of activity and in the same geographical area as the original employer. The Cour de Cassation held that the employee had failed to fulfill his duty of loyalty by providing the other company with the means to compete against his employer. The employee was dismissed for serious misconduct.

For more information, please contact Flichy Grangé Avocats our member firm in France.