SG & R Valuation Service Co v Boudrais & Ors

An employee’s right to work depends on the construction of the employment contract. Where the contract and the employee’s role show that work is part of the bargain, the employer must generally provide available work.

That right is qualified. Serious wrongdoing which demonstrates that the employee is not ready or willing to perform the contract, or makes it impossible or reasonably impracticable for the employer to provide work, may justify keeping the employee away from work while the contract continues. This is a qualification to the legal right to work, not an implied contractual term.

Interim relief may protect a reasonable notice period where the employer has proper cause to withhold work. A springboard injunction requires an existing unfair advantage; it is not justified merely because employees lawfully resign and join a competitor.

The claimant, an international hotel-sector consultancy, employed the first and second defendants as senior valuation professionals. Both resigned on three months’ notice and sought to join competing employers immediately. The claimant alleged serious wrongdoing, including misuse of confidential information, diversion of business opportunities and solicitation of staff.

The claimant sought interim relief requiring the defendants to remain away from work during their notice periods, together with further relief concerning information held by the competitor defendants. The central issues were whether the defendants had a contractual or legal right to work, whether their conduct qualified that right, whether the claimant’s conduct amounted to repudiatory breach, and whether springboard or other injunctive relief was justified.

1. Garden leave and the right to work. The contracts contained no express garden-leave power. The employee manual’s suspension provision was not incorporated into the contracts because there was no evidence that the defendants had accepted the relevant manual or addendum. The ACAS Code did not alter the contractual position.
2. The proper question was whether, on construction of the employment bargain, the defendants had a right to work. Applying William Hill Organisation Ltd v Tucker [1999] ICR 291, the court considered the specialised nature of the work, the risk that professional skills and market contacts would become stale, the defendants’ senior positions and the importance of discretionary bonuses. Those matters established a right to work.
3. That right was qualified. Consistently with Miles v Wakefield Metropolitan Borough Council [1987] AC 539 and the approach discussed in Langston v Amalgamated Union of Engineering Workers [1974] ICR 180, an employee must be ready and willing to perform the contract. Serious prior wrongdoing, particularly wrongdoing from which the employee may profit, may make it impossible or reasonably impracticable for the employer to provide work. This is a legal qualification to the right to work, not an implied term.
4. The defendants’ conduct, including misuse or appropriation of information, diversion of business opportunities, solicitation of staff and hostility towards the claimant, qualified their right to be provided with work. The contracts therefore continued until the notice periods expired, and requiring the defendants to remain at home was not a repudiatory breach which they could accept.
5. The court was not persuaded that the mutual-repudiation reasoning discussed in RDF Media Group plc v Clements [2007] EWHC 2892; [2008] IRLR 207, or in Bremer Vulcan Schiffbau und Maschinenfabrik v South India Shipping Corp [1981] AC 909 and Paal Wilson v Partenreederei Hannah Blumenthal [1983] 1 AC 854, applied to the sequential breaches in this employment context.
6. The balance of convenience favoured interim relief. The defendants were protected by payment undertakings and cross-undertakings in damages. The application for a destruction order against the competitor defendants was refused because the court should proceed with diffidence where deletion might cause disproportionate injustice.
7. The springboard jurisdiction, described by reference to Roger Bullivant Ltd v Ellis [1987] ICR 464 and Midas IT Services v Opus Portfolio Ltd 21 December 1999, was not engaged. The information had been returned or sterilised, there was no evidence of use, and lawful resignation and competition did not themselves establish an unfair advantage.