Cavenagh v William Evans Ltd [2012] EWCA Civ 697
Published on: 01/06/2012
Issues Covered:
Dismissal
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Background
The Claimant, Mr Cavenagh, was MD at the firm and was made redundant. He was entitled to receive a six-month payment in lieu of notice (PILON) payment but, as the company subsequently found out that he had been guilty of gross misconduct, they declined to make the payment. Mr Cavenagh sued for the debt owed.The Court concluded that the employer had no contractual right to withhold the money - the MD was dismissed under one clause and there was not another clause permitting the employer to withhold pay in lieu in the event that other information came to light about gross misconduct. Those conclusions were reached on the pleadings made in this case and the wording of contracts. Solicitors with executive clients may wish to read this case because it is possible that the employer may have succeeded in defending the claim had the employment contracts contained appropriate wording.In the light of this judgment, employers should consider amending their pay in lieu of notice clauses in their employment contracts expressly to provide that the payment is not due as a debt and can be clawed back (if already paid) if gross misconduct is subsequently discovered.This case is due to continue as it is anticipated William Evans will be seeking to appeal to the Supreme Court.http://bit.ly/LFNsUt
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Disclaimer
The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.
This article is correct at 01/06/2012
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