- Date:
- 21 Oct 2013
- By:
- Søren Eeg Hansen
The Western High Court recently ruled that an employer was not justified in summarily dismissing an employee, even though he had engaged in competitive activities
The Western High Court recently ruled that an employer was not justified in summarily dismissing an employee, even though he had engaged in competitive activities.
As a general rule, if an employee who is not under notice engages in competing activities, this will constitute a material breach of the employment relationship. But how much does it take before the employer is justified in summarily dismissing the employee? That was the question before the Western High Court in this case.
The employee worked for a business engaged in shipping activities to and from Greenland. One of his duties was to label dangerous goods. When a colleague created a website offering advice on handling of dangerous goods, the employee accepted to help out and his name was therefore added to the website.
When the employer became aware of the website, the employee and his colleague were both summarily dismissed. The reason given for the dismissal of the employee was that he had acted very disloyally by engaging in competing activities.
The summary dismissal of the colleague was subsequently held to be justified by a dismissals tribunal. But the employee did not believe that his own summary dismissal was justified since, in his view, the activities did not compete directly with those of his employer, and the matter ended up in court.
Appearance was not enough
The High Court agreed with the employer that the employee's participation in the colleague's business was disloyal. The very fact that the employee's name featured on the website – without the employer's permission – meant that the employee had not observed his duty of loyalty to his employer.
The High Court agreed with the employer that the employee's participation in the colleague's business was disloyal. The very fact that the employee's name featured on the website – without the employer's permission – meant that the employee had not observed his duty of loyalty to his employer.
In the High Court's opinion, however, the employee's misconduct was not of sufficient gravity to justify a summary dismissal, the High Court not being satisfied that the employer had suffered any adverse effects. Accordingly, the employer was ordered to pay the employee his salary in the notice period, but the employee was not awarded any compensation for unfair dismissal.
Norrbom Vinding notes
- that the judgment illustrates that an employee who engages in unfair competition will, as an overriding rule, be deemed to have failed to observe the duty of loyalty to his employer; but
- that such unfair competition may be of so modest as to render summary dismissal unjustified in some situations.
