Employment Law
Where employers consistently offer enhanced redundancy payments, this can give right to a contractual right for all employees being made redundant to receive similar enhanced payments.
The case of Peacock Stores v Peregrine & Ors (2014) the Employment Appeal Tribunal has found that even where the exact terms of enhanced redundancy payments and their calculation vary from employee to employee and over a period of time, where enhanced payments are consistently made and it is well understood that this is the employer’s accepted practice, a contractual right to enhanced redundancy payments can arise.
Many employers do of course have in place a contractual policy in place for making enhanced redundancy payments, which provides clarity and certainty for both employers and employees when redundancy situations arise. However, employers without such a policy should be wary of making any enhanced redundancy payments in order to avoid future allegations that such enhancement has become a contractual right, thereby significantly increasing the employer’s financial exposure.
If you would like advice on employment issues please contact us.
Jacqueline Penfold
Tina Ripley
Please note the above is for information purposes only and is intended to be a short summary. It should not be treated as a comprehensive guide and should not be acted on without qualified legal advice.
