How are debts owed to family members dealt with in divorce proceedings?
The first question for the court to determine is whether the debts are legitimate, and this is a...
The situation involving Steve Borthwick, Bristol Rugby Club and the Rugby Football Union has highlighted an interesting area of employment law. What happens if having just started a job with a lengthy notice period, you receive an extremely attractive offer of employment from a third party and the third party wants you to join their organisation with immediate effect in order to replace an outgoing executive or to help them prepare for an international rugby tournament?
A similar situation arose back in 2001 when the High Court became involved in a dispute between Steve Bruce and Crystal Palace FC. Bruce, who had only started his contract with Crystal Palace in June 2001, (with a notice period of 9 months and an express garden leave clause) gave notice to terminate in November 2001 purporting to resign with immediate effect.
Bruce had heard that there was a vacancy for the manager’s job at Birmingham City due to Trevor Francis being sacked but he had been refused permission to approach Birmingham City for the job.
Bruce asserted that he was entitled to resign with immediate effect because trust and confidence between himself and Crystal Palace had broken down .Crystal Palace did not accept that notice as terminating the contract and sought to enforce the contract and keep it alive.
Palace asserted that they potentially had a substantial claim for damages against Bruce as his premature departure could cost them millions if they missed out on promotion.
The High Court judge granted a garden leave injunction and set a speedy trial for 2 months’ time. This meant that Bruce would have to remain as a Palace employee on fully paid garden leave until the Court decided at trial if he had breached his contract and if so award damages.
Ultimately, as history shows, a deal was done and Bruce was able to join Birmingham City in December 2001 with Palace having appointed Trevor Francis as their manager one week after the High Court hearing. One can only surmise that a significant sum of money was paid to Palace in compensation.
These facts are, of course, different to the rugby dispute. Birmingham had not made an offer of employment and had not announced their recruitment of Bruce to the media at the time of Bruce’s resignation. Borthwick resigned and Bristol no doubt alleged that their promotion prospects were severely dented in order to bolster their damages claim. Borthwick was not off to join a promotion rival and there was no risk of other coaches from Bristol joining him so it is not surprising that a garden leave injunction application was not made. The RFU have now reportedly settled Bristol’s breach of contract claim.
In essence, the employer’s response will be to claim for damages or to try to keep the contract alive and seek an injunction. In a damages claim, the employer will have to show that it suffered a loss over and above the salary that it would have paid to the employee during the notice period. A garden leave injunction would involve demonstrating that damages were not an adequate remedy and might be the preferred option if there is a risk of the employee poaching employees or customers if they are allowed to leave with immediate effect.