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Is an objection to transfer a notice to terminate employment?

In Williams de Broë Limited and Investec Wealth & Investment Limited v Phillip Epsley [QBD, 9th November, Mr Justice Underhill] David Reade QC was instructed by Clyde & Co on behalf of the Employee.

  • Is an objection to transfer a notice to terminate employment?

In a recent injunction application Mr Justice Underhill held, at the interim stage, that it did not. The employee argued that he was released from his post termination restrictions because of the employer’s repudiatory breach of contract in not paying a contractual bonus due on the day upon which there was to be a TUPE transfer.

The employee had written to his employer objecting to the transfer and that had had the effect, Reg 4(7), of terminating his employment at the point of transfer. The employer’s case was that the giving of notice of objection to the transfer fell, under his contract of employment, within the meaning of an employee giving notice to terminate his employment with the consequence the bonus would not have been payable. Mr Justice Underhill held that the notice provisions of the contract could not be construed so as to embrace an objection to a transfer.

  • Can you accept a repudiatory breach after the end of the employment relationship?

A further novel and important point in the case was whether the repudiatory breach could be accepted after the end of the employment relationship as the employee did not become aware   of the non payment of his bonus until after his employment had ended. The employer argued that a repudiatory breach had to be accepted whilst the employment relationship was still alive for the employee to be released from the covenants.

Mr Justice Underhill held however that on a true construction of General Bill Posting Co Ltd Atkinson [1909] AC 118 the release was the consequence of the other party not performing their contractual obligations, whether or not the employment relationship was still subsisting.  The employer’s application for interim injunctive relief to enforce the post termination non-solicitation and non-dealing covenants in his contract was therefore refused. This was however an interim application and the points may be argued again at trial.

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