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.
The claimant, a trade union and three trade union representatives, brought a claim against the defendant in relation to act of ‘fire and re-hire’. In 2007, the defendant closed a number of distribution centres and opened new ones. To retain staff, the defendant offered enhanced payments known as ‘retained pay’ for as long as they remained in their current role. The statement at the time stated the retained pay was ‘guaranteed for life’ and that it would increase with pay increases. The contract was changed noting that the enhanced pay would only be changed by mutual consent, promotion or a change of working pattern requested by the employee.
In January 2021, an announcement was made to the effect that the enhanced pay would be removed. A number of employees refused and the defendant informed them that their contracts would be terminated and they would be offered re-engagement on terms which removed the enhanced pay. The High Court gave judgment to the claimants. The issue related to the construction of the term and it was held that permanent would ordinarily mean that it would last as long as the particular contract was in place. However, to use that interpretation would ignore the realities and the intentions of the parties when the enhanced pay was originally given. This led to a conflict between the rights of the employees and employer in this situation which had to be resolved through implied terms.
The High Court held it was necessary to imply a term stating that the contract would not be terminated for the purpose of removing the enhanced pay. The reason for this is that the officious bystander would feel that such a term was in place and that without such a term it would remove the permanent status that the term was supposed to have. As a result, an injunction was granted to restrain the defendant from giving notice to those employees who sought to retain their enhanced pay.
Practical Lessons
This case demonstrates the nuances that can arise when it comes to contractual terms. The use of ‘permanent’ in a contract may only suggest it arises in relation to that contract but to allow for fire and re-hire in such a situation would make a mockery of using the word ‘permanent’. The court recognised this stating that an implied term was part of the contract to give some protection to the permanence to be given to the enhanced pay for those employees.
https://www.bailii.org/ew/cases/EWHC/QB/2022/201.html
Continue reading
We help hundreds of people like you understand how the latest changes in employment law impact your business.
Please log in to view the full article.
What you'll get:
- Help understand the ramifications of each important case from NI, GB and Europe
- Ensure your organisation's policies and procedures are fully compliant with NI law
- 24/7 access to all the content in the Legal Island Vault for research case law and HR issues
- Receive free preliminary advice on workplace issues from the employment team
Already a subscriber? Log in now or start a free trial
