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Giving clear notice

Redundancy iStock 000006411338XSmall 146x219Harmajinder Hayre looks at a recent employment case involving a city council that demonstrates the importance of clear notices.

The claimants in Lynam & Rooney v Birmingham City Council [2017] UKEAT 0072_17_0609 were all employed as Review and Monitoring Officers within the Adult and Communities Division of Birmingham City Council.

In accordance with section 188 of the Trade Union and Labour Relations Act 1992, the council issued a notice on 9 December 2013, informing the claimants of potential redundancies. The notice also stipulated that they would be inviting "affected" employees to apply for Voluntary Redundancy.

On 16 December 2013, the council circulated a document on the staff intranet which gave further details of the Voluntary Redundancy ("VR") policy. The statement explained that all eligible employees (which explicitly included those identified in the section 188 notice) would be contacted by HR and invited to make an application for VR.

In September 2014, the council decided that they no longer had a requirement for any workers in the claimants' job group. The claimants were told that as the whole of their job group was being "deleted", they were being made compulsorily redundant and therefore were unable to apply for VR.

Unhappy with the decision of the council to deny them the right to apply for VR, the claimants brought a breach of contract claim in relation to the VR package.

Tribunal decision

The claimants' argument was that as they were "affected employees" the council had committed a breach of contract by denying them the right to apply for the VR scheme. The council argued that there was no contractually binding offer of VR in place between the parties, and that the employees were made compulsorily redundant.

The ET found in the council's favour and explained that the claimants had "no express contractual right" to the VR package. Indeed, there was nothing in their contract of employment that entitled them to VR. The judge also interpreted the communication from the council as meaning that only those who got invited to apply to VR would become "eligible". Here the claimants had not been invited to make such an application.

Further, there was nothing to suggest that the right to VR had been implied by custom or practice. The ET emphasised that the VR scheme had only run in the years 2013/14 and 2014/15 and was not a well-established policy. Additionally, the judge explained that although employees may have become "eligible" for the VR package "the decision whether or not they would be accepted was in the gift of the employer".

Finally, it would not have been the council's intention to allow employees who were to be made compulsorily redundant to apply for VR, as VR was intended as a cost-saving exercise.

EAT decision

The EAT found that the ET had mistakenly placed too much emphasis on the fact that VR had only recently been made available and could not be implied as a custom or practice.

The ET had also erred in interpreting the VR documents as stating only those specifically invited to apply to VR would become "eligible". The documents clearly stated that all "affected" employees, which included the claimants, would be eligible for the enhanced scheme. It was also of note that "affected" and "eligible" were used interchangeably in the documents.

With regard to the other findings, the EAT held that although it would have been the council's final decision as to whether the claimants received VR, the basis of the claimants' dispute was about the failure of the council to let them apply for VR. It was for the tribunal to determine what damages the claimants would receive had there been such a failure.

Further, the ET had incorrectly relied on the fact that the VR was intended as a cost-saving exercise. Within the VR documentation it was explained that the intention was to reduce the amount of compulsory redundancies. This would have been achieved had the claimants been allowed to apply.

The EAT held that the real issue of the case was whether the council's communications, viewed objectively, gave rise to a contractual right for the claimants to apply for VR. Consequently, the EAT remitted the matter back to the ET.

Comments

The case is a good example of how, if you get the drafting wrong, you could end up committing to the right for employees to apply for VR. The case does not hold that the employees were entitled to receive the VR package - this was in the employer's discretion, but that the employees were entitled to apply for VR.

Harmajinder Hayre is executive partner in the Leeds office of Ward Hadaway. He can be contacted on 0113 205 6712 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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