1. “High-ranking employees can do particular damage to the legitimate interests of their employers following termination of their employment; and it may be that, when they enter into their post- employment covenants, they are able to negotiate with their employers on nearly an equal footing…. It is clearly common practice for an employer to present a prospective employee with a substantial written contract, many terms of which, including those imposing post-employment restraints, are derived from books of precedent…. [M]ost prospective employees will not be able, even if minded, to decline to accept such terms, still less, following the end of their employment, to defend a claim that they are in breach of them. The courts must continue to adopt a cautious approach to the severance of post- employment restraints.”
Tillman v Egon Zehnder Ltd [2019] UKSC 32 [82] (Lord Wilson).
Critically discuss this statement and in particular consider whether the respective bargaining power of the employer and employee should be relevant to the question of severance of restraint of trade covenants in employment contracts.
2. For six months now, Joseph has worked as a night security guard. His job is to drive around various industrial estates checking particular factories and units for any signs of burglary or damage. His hours are midnight to 7 AM, five days per week. He is paid by Herod Security Ltd. Joseph pays his own tax and national insurance. Joseph drives a van owned by Herod Security which carries its logo and is in its colours. Joseph also wears a Herod Security uniform. Herod Security take care of the upkeep of the van and pay for its fuel.
Joseph’s contract with Herod Security states that Joseph is an “independent contractor” who is employed by the owners of each factory and unit that he is bound to inspect under the contract; Herod Security collects payment from these owners and, after taking a “commission”, passes it on to Joseph in the form of a “fee”. The contract also states that there is no mutual obligation for Herod Security to supply work, nor for Joseph to take any; in addition, Joseph may use substitutes providing they have a full driving licence, no criminal record, and are over the age of 21. To date, Joseph has not declined any work or used a substitute.
Joseph wishes to know if he could be classed as an employee or worker of Herod Security. Advise him.
3. Walters Widgets Ltd manufactured widgets in Portsmouth. It had a network of sales offices throughout the United Kingdom, one of which was based on the Isle of Mull in Scotland and was run by Morag. Without the knowledge of Walters Widgets, Morag ran a sideline business selling widgets from another manufacturer to clients of Walters Widgets. In time, Morag’s sideline business earned her more money than her earnings from Walters Widgets.
Recently, Morag decided to take early retirement from Walters Widgets, and under the terms of her contract took a lump sum payment of £100,000 plus a lifetime pension. Morag continued the “sideline” business.
Following Morag’s retirement, Morag’s secretary, Mr Canary, informed Walters Widgets of Morag’s sideline business during Morag’s employment with Walters Widgets. Mr Canary was aware of this sideline business the whole time, but did not say anything until now for fear of upsetting Morag, with whom he had to work. Indeed, Mr Canary has threatened to take the story to the local newspaper, the Mull Mirror.
Walters Widgets would now like, the return of the lump sum payment and pension payments already made, to stop any further pension payments, to stop Morag’s continued “sideline” business (which continues to take custom from its own business on the Isle of Mull), Morag to account for any profit she made while employed by Walters Widgets, and to avoid the bad publicity threatened by Mr Canary.
Advise Walters Widgets.
