Compensation

Case 1: The facts

When his employer transferred its manufacturing operations to the Czech Republic, Mr Duffy was selected for redundancy at random without any selection criteria being agreed or applied; two employees who had shorter lengths of service were retained in similar positions.

Duffy was paid an enhanced redundancy payment, as well as an ex gratia payment which was payable on the basis that he worked his full notice period; the total payment was more than £4,000.

A tribunal found that Duffy had been unfairly dismissed, and the issue on appeal was whether the additional payments had to be taken into account when deciding his compensation.

The ruling

The Employment Appeal Tribunal held that the payments did have to be taken into account, so the £4,000 was deducted from the compensation that he would otherwise have received.

Section 123(7) of the Employment Rights Act 1996 states that payments made “by reason of redundancy” are deducted from the compensatory award. And the EAT held that both of the payments Duffy received were by reason of redundancy, even though there was a condition attached to one of them; both therefore had to be deducted, as section 123(7) allows a tribunal no discretion over whether to make the deduction.

Inventec (Scotland) Corporation Ltd v Duffy UKEATS/0021/07