Local authority severance

Case 1: The facts

Rita Nicholls, a part-time school cleaner, had a contract that on retirement gave her the right to a lump sum payment of two weeks' pay for every year she had worked. Her employers did not pay it because they believed it would be against the law.

The ruling

The Court of Appeal upheld Nicholls' right to be paid according to her contract term. The court ruled that even if it were the case that there was legislation preventing employers from paying over the odds, the law did not apply retrospectively. This meant that it could not be used to deny a contractual entitlement to the lump sum.

* Nicholls v LB Greenwich A1/2002/1400