The Royal National Theatre is currently involved in an employment dispute in the High Court following the contract termination of five War Horse musicians.
The musicians were employed by the Theatre under contracts which stated that, after an initial period, their employment could only be terminated on two weeks’ written notice if the Theatre’s production of War Horse was to close. After a number of years, the Theatre decided to stage the play without live music and terminated the musicians’ contracts despite the production continuing.
Although the lawfulness of that termination remains for the High Court to decide, the Court has recently refused the musicians’ application for interim injunctions requiring the Theatre to immediately re-engage them. The Court said that an order in those terms would interfere with the Theatre’s right of artistic freedom. In reaching its decision, the Court recognised that the musicians had good claims for breach of contract but concluded that their losses could be adequately compensated for by monetary damages at the ultimate trial of their claims without the need for injunctions.
The Theatre may have won the initial battle against the grant of injunctions, but it is unlikely to win the entire war and may face an order to pay damages and legal costs once the musicians’ breach of contract claims are finally decided.
Sometimes breaches of contract are inevitable due to external drivers and changed commercial strategy. However, businesses should ensure that employment and general commercial contracts allow for change.
When a breach is unavoidable, wherever possible, plans should be put in place to manage the disrupted relationship before the breach is initiated. Had the Theatre put such plans in place before it gave notice to the musicians, it may not have even been in a fight; instead, it has incurred an injunction battle and finds itself in a continuing and costly (although, arguably, avoidable) legal war.