Digest
Case-law Digest
COMPANY
Sharp and others v Blank and others [2015] EWHC 3220 (Ch)
The trial judge rejected the argument that there existed a ‘special relationship’ between a company’s directors and shareholders such that the directors owed fiduciary duties to the shareholders (para 16). The fact that the directors had more knowledge of the company than the shareholders, and through their actions could affect the shareholders, was not suÿcient to establish such a duty.
Comment: It has been established for over 100 years that the duties of directors are owed to the company - as a separate entity - and not to the shareholders. This principle was placed on a statutory footing by Company Act s170. Sharp confirms this position, but also makes clear that there can be circumstances in which directors will owe duties towards individual shareholders: there will need to be, at least, some form of personal relationship or particular dealing or transaction between the directors and shareholders.
EMPLOYMENT
BT Managed Services Ltd v Edwards [2015] IRLR 994
The thorny question of assignment, ie, identifying which employees are assigned to the part of the undertaking transferred, continues to bedevil TUPE cases. In this case, the employee had been off sick since 2008 and was receiving permanent health insurance payments, but these were no longer paid by the insurance firm; his department continued to pay them as an expense. The department then transferred to a third party, giving rise to a question concerning whether it was necessary for the claimant to be actually involved in some way in the work carried out by the team in order to be assigned to the organised grouping; if so, he would not transfer under TUPE. A tribunal ruled that because he did not contribute to the economic activity of the grouping, he was not assigned to it.
The Employment Appeal Tribunal (EAT) dismissed an appeal. Mere administrative connection to a grouping does not constitute an employee as assigned to the grouping, if he is not taking part in some way in the grouping’s economic activity.
British Security Industry Association v Brown UKEAT/0228/15/BA
The way in which tribunals exercise their discretion in dealing with an application to adjourn a hearing is an important practical matter. A brusque rejection of an adjournment was overturned in this case.
The employer applied for an adjournment of the hearing of the claimant’s claim of unfair dismissal because a key witness was going to be out of the country (a trip which had been planned for a long time). The application was refused.
Allowing an appeal, the EAT acknowledged that:
Wide latitude is given to employment judges in matters of case management... Nevertheless there are boundaries. The decision must be taken in accordance with legal principle; factors which it is essential to take into account must not be left out of account; factors which are wholly irrelevant must be left out of account, and the decision must be within the parameters of reasonableness (para 7).
In this case, the employment judge ‘gave only the very briefest of reasons for his decision’ and, although they did not need to be lengthy, they failed to:
… grapple with the question whether an adjournment should have been granted. It was not necessary for the reasons to be substantial; it was necessary for them to explain why it accorded with the overriding objective to press ahead with a two-day case at a time when the dismissing officer was booked to be elsewhere on a matter of real importance … (paras 9 and 10).