The appellant employees (A) appealed against a decision that a redundancy policy with improved severance terms did not form part of their contract of employment. The policy was officially approved by an advisory council. The employee handbook expressly stipulated that the redundancy policy would apply. These promises were verified by the employer (B) that they would be applicable at least until renegotiations in 2010. Before said renegotiations, A was made redundant but was unable to rely on the policy.
It was held that the terms within the policy could not be deemed contractual. The terms and conditions did not refer to the redundancy policy and the terms were not incorporated into the employee’s contract. A appealed the decision of the tribunal. It was held that the tribunal erred by failing to consider whether the handbook could be deemed a source of contractual obligation. The tribunal merely referred to the handbook but did not fully consider the promises made within the handbook in the event of redundancies.
Its conclusion that there was no evidence of any inference that B intended to be contractually bound by the redundancy policy depended on whether the employee handbook was capable of being a source of contractual obligation. The Tribunal could not therefore conclude B did not have a reasonable expectation that payment would be made in accordance with the express promise in the employee handbook. The matter of enhanced severance payments are traditionally dealt with orally, by custom and practice, or held within particular documents, including an employee handbook. The handbook expressly stated that the policy would be implemented.
In addition, the statements and promises made by B indicated the A would have a reasonable expectation that the policy would apply. The policy in question was particularly dogmatic and did not facilitate for discretion. The tribunal had erred in law in considering whether B was contractually obliged to pay the enhanced severance terms set out in the redundancy policy. http://bit.ly/W2BnSz
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