If an employee plans to set up a business in competition with that of his employer and uses employer resources to do so, is this gross misconduct?  The leading case on this point is Laughton and Anor v Bapp Industrial Supplies Ltd [1986] which found that an intention to compete in the future with an employer and the making of preparations for a future business is not, in itself, a breach of loyalty and gross misconduct.  This case also established that not every piece of information that an employer has and which they might regard as important or confidential, is to be regarded in law as confidential information.

The recent EAT case of Khan/ Hemming v Landsker Child Care Ltd was on this point.  Mr Khan and Mr Hemming who planned to set up in competition with Landsker lost their claims of unfair dismissal at Tribunal.  However, crucially, the Tribunal did not consider the Laughton case when reaching their decision.  The case has therefore been remitted back to Tribunal for re-hearing.

The morale of the tale is that Laughton should be a point of reference for any gross misconduct case concerning employees setting up, or planning to set up, in competition to their employer.