Employer obliged to pay settlement despite employees confidentiality breach
In Duchy Farm Kennels Ltd v Steels the employer was found not to have been relieved of its obligation to pay a settlement sum, despite the former employee having breached the confidentiality clause contained in the settlement agreement.
In Duchy Farm Kennels Ltd v Steels the employer was found not to have been relieved of its obligation to pay a settlement sum, despite the former employee having breached the confidentiality clause contained in the settlement agreement.
The High Court stated that the employer could potentially establish that the breach of confidentiality relieved it of its obligation to continue paying the settlement sum via two routes:
- the confidentiality clause being regarded as a condition of the contract; or
- the breach of the confidentiality clause being repudiatory.
Neither of these were established. Firstly, the confidentiality clause was not a condition but was an intermediate term. Confidentiality was not at the core of the agreement: this was a generic confidentiality clause and its existence in the settlement agreement did not indicate that confidentiality was of any importance to the parties. Secondly, it was not a repudiatory breach. The employee had not shown “an intention to abandon and altogether refuse to perform the contract”.
Where employers wish to withhold payment where confidentiality is breached, they should not rely on the existence of a generic confidentiality clause in settlement agreements. An employee’s breach of such a clause does not automatically end the employer’s obligation to pay a settlement sum. In these circumstances, the employer would need to ensure that the confidentiality clause was drafted in such as way so as to make it a condition of the contract.
Related expertise
You may be interested in...
Opinion
Gender pay gap reporting – what are my obligations?
Opinion
Employment claims: the new rates and limits from 6 April 2023
Opinion
Plans to amend NHS pension rules to bolster NHS workforce approved by government
Opinion
Increase to 20 hour limit on supplementary employment for Health and Care Worker visa holders
Article
New report highlights risk of sidelining ED&I in school trusts
Opinion
Mopping up after a leak – how businesses can take steps to protect their confidential information
Online Event
Wellbeing and financial considerations – practical solutions for challenging times
Press Release
Browne Jacobson collaborates with The GLAA and University of Nottingham to tackle modern slavery and human trafficking
Legal Update
Teacher strikes – lessons learnt so far
Opinion
Can toilet facilities amount to sex discrimination?
Opinion
Consultation launched on minimum ambulance service levels during strike action
Opinion - Maternity services
Changes to redundancy protections for employees post-maternity leave
Opinion
BMA issues medical locum rate card for junior doctors
Legal Update
Employee who refused to wear a face mask fairly dismissed
Opinion
New toolkit to support safer recruitment in the care sector
On-Demand
Employment update webinar
Opinion
Term-time school worker entitled to national minimum wage for unworked basic hours
Opinion
Fire and re-hire – draft statutory code
Opinion
Menopause and the workplace
Opinion
Consultation on holiday entitlement – part-year and irregular workers
Opinion
Government introduces new “anti-striking laws” to be discussed in Parliament
Opinion
Twitter facing employment claims following mass redundancies
News that Twitter is being threatened with multiple claims by UK employees following mass redundancies provides a reminder of the risks that comes with an employer implementing large scale redundancy exercises.
Legal Update
Industrial Action and Minimum Service Levels
Legal Update
Discrimination comes of age
Legal Update - Shared Insights
Shared Insights: Looking ahead to 2023 – what Health and Care employers need to know
Opinion
Rising Employment Tribunal backlog
Legal Update
Official statistics demonstrate a new wave of age discrimination claims
Opinion
Menopause and the NHS workforce addressing the female brain drain…
Opinion
4-day working week a success?
The Covid-19 pandemic drastically changed the world’s way of working, with increased flexibility being greatly desired by employees. Earlier on in the year, a number of organisations trialled the concept of a 4-day working week – which has clearly been a success for many.Legal Update
Coming of age
Official statistics show that 15,336 claims which included a complaint of age discrimination were received at the Employment Tribunals between March 2020 and March 2021.
Published Article
Starling Bank employment tribunal
The outcome of the Employment Tribunal claim brought by Gulnaz Raja against Starling Bank Limited (1) (Starling), and Matthew Newman (2) was reported last month.
Published Article
EU banks show slow progress on gender diversity
Opinion
Rising wages ahead
In the Autumn Statement delivered on 17 November, rises to the National Living Wage and National Minimum Wage rates were announced, to take effect from 1 April 2023.
Opinion
World Cup 2022 – how employers can avoid scoring an own goal!
The World Cup kicks off in Qatar on Sunday 20 November 2022, with the final taking place on Sunday 18 December 2022. Undoubtedly, this is a huge sporting event, and many employees will be keen to show their support for their favourite teams. However, due to the time difference, start times for the matches are between 10 a.m. and 7 p.m. UK time, which could have an impact on employers if employees who wish to watch the matches are scheduled to work.
Legal Update
Settlement agreements – what are the limitations?
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship.
Legal Update
The Starling Bank disability discrimination decision
Opinion
The vanishing dismissal
Where an employee appeals against their dismissal under a contractual appeal procedure and their appeal is successful, reinstatement to their previous role is automatic and does not require approval or agreement from the employee.
Opinion
Settlement agreements – what are the limitations post Bathgate?
Settlement agreements in an employment context are ordinarily used to provide both parties with certainty following the conclusion of an employment relationship – but what happens when there is alleged discrimination after entering into a settlement agreement?
Legal Update
IR35 rules here to stay after government U-turn
A few weeks ago we brought you news that following the Government’s mini-budget it was confirmed that the off-payroll working rules (known as “IR35”) put in place for public and private sector businesses from 2017 and 2021 would be scrapped from April 2023.
Legal Update
Redundancy consultation and selection concerning expiry of a fixed term contract – EAT put the spotlight onto a ‘selection pool of one’
In Mogane v Bradford Teaching Hospitals NHS Foundation Trust the Employment Appeal Tribunal (EAT) considered whether it was fair to dismiss a nurse as redundant on the basis that that her fixed-term contract was due to expire before that of her colleague.