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Unfair dismissal: Refusal to sign unreasonable restrictive covenant not fair reason for dismissal

This report relates to 1 case(s)

Key points

In Forshaw and others v Archcraft Ltd, the EAT holds:

  • The employment tribunal erred in holding that a dismissal for refusing to sign a contract of employment that contained an unreasonable restraint of trade clause was for "some other substantial reason".
  • An employer cannot assert as a potentially fair reason for dismissal the fact that the employee refused to sign up to unreasonable terms.
  • In the circumstances, it would have been reasonable to ask the employees to sign contracts with a reasonable restraint clause. Any dismissal for failure to sign such a clause would have been potentially fair.