Latest in Employment Law>Case Law>Maguire & Jamison v Department for the Economy [2021]
Maguire & Jamison v Department for the Economy [2021]
Published on: 10/08/2021
Issues Covered: Redundancy Pay
Article Authors The main content of this article was provided by the following authors.
Jason Elliott BL Lecturer in Law and Barrister
Jason Elliott BL Lecturer in Law and Barrister

Jason Elliott was called to the Bar of Northern Ireland in 2013 and is the Associate Head of School of Law at Ulster University.  As a practising barrister, he has developed a largely civil practice representing individuals, companies and public bodies in litigation. This covers a wide range of areas including personal injuries, wills and employment law. In terms of employment law, he has represented both applicants and respondents in the Industrial Tribunal.   At Ulster University, Jason lectures extensively on the civil areas of practise such as Equity and Trusts and delivers employment law lectures for both undergraduate and postgraduate students.

Background

The claimants were employed by BOTL Wine and Spirit Merchants Ltd until their contracts were terminated by reason of the insolvency of their employer.  Ms Maguire had been employed from October 2014 and Ms Jamison from October 2016.  

The claimants lodged claims with the Redundancy and Insolvency Payments Service in August 2018 following the insolvency in July 2018.   Both claimants received payments relating to notice pay, holiday pay and arrears.  Ms Maguire also received a redundancy payment.  They both made claims in relation to their annual bonus, which was in their contract of employmentyet this was claim rejected. 

The claimants brought a claim for the payment of arrears in relation to the bonuses.  Ms Maguire claimed £2,000 and Ms Jamison claimed £1,600 relating to the annual bonus. 

The issue, as raised by the respondent, was whether an annual bonus was to be considered as ‘pay’ under the terms of the legislation.  It was held by the Tribunal that the claimant had discharged the onus of establishing a contractual right to an annual bonus payment.  The Tribunal stated that bonus payments are capable of falling within the definition of arrears of pay under Article 229 of the Employment Rights (NI) Order 1996.  This is on the basis that they are remuneration for work that has been performed and as a result they can qualify as a debt, which they are entitled to be paid. The next question was whether the bonus payment was subject to the eight week pay limit.   It was held that it was and, as a result, the bonus payment had to be examined on a pro-rated basis for the last seven weeks.  This meant that Ms Jamison received £160.19 and Ms Maguire received £194.55.  

Practical Lessons

This case provides an example of how the legislation applies when there is an unfortunate situation when the employer has gone insolvent and the Department steps in to provide a redundancy payment. The issue here was whether a bonus payment had to be considered as an ‘arrears’.  As there was no express provision against it in the legislation, it had to be examined on its facts and it was clear that it was pay for work that had been done.  Therefore, it could be claimed, but would only be based upon the last 8 weeks as per the legislation.

NI Tribunal decisions are available on the OITFET website:
http://www.employmenttribunalsni.co.uk/

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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 10/08/2021