Cut in payout on job loss dampens spirits

How definite does an expectation of receiving an enhanced redundancy payment have to be, before an employee can bring a claim for having lost the right to it?

Whisky group Chivas Brothers acquired a controlling shareholding in Allied Distillers. After the acquisition, Chivas re-organised and combined departments. As a result the contracts of three senior Allied employees were terminated, their equivalents at Chivas having been appointed to the newly merged posts.

Mr Handley and his two colleagues’ unfair dismissal claims were successful at tribunal and although they hadn’t claimed it, they were awarded a sum for loss of enhanced contractual rights. This was to compensate them for not receiving an enhanced redundancy payment — normally due to Allied employees — if they signed a compromise agreement waiving their rights to sue.

On appeal, the Employment Appeal Tribunal (EAT) decided that this part of their award could not stand as it had not been claimed by Handley and his colleagues. It also commented that the basis upon which an enhanced redundancy payment was to be made to Allied employees was not sufficiently binding. Handley and his colleagues had the opportunity to receive a redundancy payment calculated on this particular basis only if a compromise agreement, the terms of which were unknown, could be agreed. The EAT decided that that chance could not be properly assessed or valued.