In this issue we report that a “Britain’s Got Talent” contestant is not covered by discrimination laws, Employment Tribunal awards limits are being raised and how a springboard injunction prohibited three employees from joining a competitor.

EAT confirms “Britain’s Got Talent” contestant not covered by discrimination laws

In Czikai v Freemantle Media Limited and others, the EAT has confirmed that a Britain’s Got Talent contestant was not covered by discrimination law.

In a preliminary hearing to determine whether the Claimant’s appeal had a reasonable prospect of success, the EAT has endorsed the findings of the Employment Tribunal that a Britain’s Got Talent contestant was not covered by discrimination law.

The EAT agreed that the purpose of auditioning was to progress in a competition, it was not an application for employment. Miss Czikai attended auditions voluntarily and no mutual obligations existed between the parties. Had the contestant progressed to the subsequent stage of the competition and become contractually obliged to perform in a roadshow, that would have constituted employment for discrimination purposes.

Comment: This will generally be viewed as a common sense judgment of the EAT.

Limits on Employment Tribunal awards to increase from 1 February 2012

Employment Tribunal compensation limits will increase on 1 February 2012. The maximum award for unfair dismissal will rise from £68,400 to £72,300 and the maximum amount of a week’s pay, used to calculate statutory redundancy pay (among other things), will rise from £400 to £430.

The figures reflect an RPI increase of 5.6% in the year to September 2011. In cases involving dismissal, the new figures will apply where the effective date of termination falls on or after 1 February 2012.

Comment: Unwelcome news for employers as the cost of making redundancies (among other things) will now increase. In addition any successful claim made by an employee at the Employment Tribunal has the potential to be more expensive.

If you have any queries or concerns regarding any Employment Law issue, please do not hesitate to contact a member of the Employment Team.

Springboard injunction prohibits defection of three key employees

The High Court has granted a springboard injunction, pending speedy trial, restraining three employees from joining a potential competitor. There was an arguable case both that the employees had solicited each other over a period of months to carry out a co-ordinated departure which they concealed from their employer, and that they had retained confidential information during their employment.

These were serious breaches of the duty of fidelity. It was also arguable that fiduciary duties existed and had been breached. The court accepted that unless restrained, there was a real risk that the employees would misuse the confidential information in the future.

In this case the applicant company (Clear Edge) designed, manufactured and sold industrial process filtration products. These include its Ceraphil product range of gas filtration products comprising ceramic tubes impregnated with a catalyst. A leading ceraphil product is Topkat which is impregnated with a catalyst supplied by Haldor Topsoe AS (Topsoe) which also provides technical support and underwrites guarantees. It would take Clear Edge some time to find an alternative to Topsoe.

The three defendants had been employed by Clear Edge for some 20 years and together made up the entire team that dealt with Ceraphil products. Accordingly, all three defendants had access to highly confidential information about the technical and financial aspects of the Ceraphil business and its customers.

In early 2011, Clear Edge rejected an approach from Topsoe to buy the Ceraphil business. On varying dates in September the defendants resigned by email and advised that they intended to join Topsoe.

Clear Edge requested the return of its property, including laptops and mobile phones. On 20 September 2011, an employee sent to collect these items found all 3 defendant’s in one of the defendant’s homes.

Clear Edge requested a warranty from each defendant that they had not disclosed confidential information to Topsoe, an undertaking not to engage in any competitive activity or breach duties of fidelity prior to the termination of their employment and an undertaking to comply with the post termination conditions in their contracts.

The defendants offered an assurance that they intended to comply with the confidentiality provisions in their contracts.

On 25 October 2011, Clear Edge received a preliminary report from the IT company instructed to examine the defendants’ laptops and mobile phones. This advised that the mobile phones had been cleaned and that no user data was available. The report prompted Clear Edge to seek injunctive relief to prevent the defendants commencing employment with Topsoe before 15 March 2012.

The High Court granted injunctive relief to prevent the defendants from joining Topsoe pending a speedy trial listed for 16 January 2012.

Clear Edge had shown a prima facie case that by their co-ordinated defection and by their past and threatened misuse of confidential information, the defendants had given or would give Topsoe and/or themselves an unfair competitive advantage from which they would benefit if not restrained.