- TUPE and restrictive covenants: the background.
- The P14 Medical case: covenants, novation and liability.
In the recent England and Wales High Court case of P14 Medical Ltd v Mahon [2020] EWHC 1823 Mr Justice Cavanagh expressed the view that it is beyond doubt that a restrictive covenant in a transferring employee’s employment contract can transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006, SI 2006/246 (TUPE). In this case, a TUPE transfer occurred. Mr Mahon was a transferring employee. After the transfer, Mr Mahon resigned from the transferee, P14 Medical, to join a competitor of the business. But Mr Mahon’s transferred employment contract had restrictions which forbade that. Could P14 Medical sue to enforce those restrictions? In principle, yes, said Cavanagh J. As the effect of TUPE is that the contracts of employment of all employees in the part transferred are automatically transferred, by operation of law, from the transferor to the transferee, and the terms and conditions remain the same, this operates so as
