Labour Research (September 2013)

Law Queries

Contract terms

Q. I accepted a promotion and was given a new contract which I read but didn’t sign. I got a pay rise and better holiday, but my new contract says I am only entitled to statutory redundancy pay. My old contract gave me much better redundancy terms and now I’m threatened with redundancy. Can I insist on my original redundancy package as I didn’t sign the new contract documents?

A. Almost certainly not. Even though you didn’t sign the new contract terms, by taking advantage of the pay rise and better holiday, you would normally expect a tribunal to find that you accepted the new contract, including the less favourable redundancy terms.

The tribunal would say that the only sensible explanation for your behaviour — taking advantage of the benefits of the new contract such as the extra holiday — is that you accepted all the terms of the new contract, good and bad, whether or not you signed it.

A tribunal would not be interested in what you privately intended or thought about the new contract. Instead, it would look only at how your behaviour — taking the benefits of the new contract without protest — looks to an objective outsider.

If the only sensible explanation is that you intended to accept the new contract terms, then you will be bound, meaning you’ve lost the right to the more favourable redundancy package.


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