Employee not entitled to choose settlement terms

An employer’s offer to gift an employee a company car as part of a redundancy settlement was capable of being a contractual right, but only if all the terms on offer were accepted (Evergreen Timber Frames Ltd v Harrington UKEAT 0072/20).

Manager Nick Harrington was made redundant when his employer ceased trading. At a meeting to discuss his redundancy, his employer handed him a letter that set out the amount to be paid to him upon dismissal, asked him to continue working during his notice period and stated that it would also like to gift him a Nissan Qashqai.

Harrington accepted the car and some other terms but asked for clarification of the redundancy payment and other terms he said had been verbally offered. Following his dismissal, he brought claims for breach of contract in the employment tribunal (ET) which awarded him £8,400 for the value of the car. The employer appealed.

The Employment Appeal Tribunal agreed that offering a gift is the same as offering payment “ex gratia”, or without admission of liability, and that this can be legally binding once accepted.

But the ET had been wrong to say that Harrington was entitled to accept only part of the offer.

Harrington’s case was remitted to a different tribunal to reconsider, to take account of any verbal agreements made.

https://www.bailii.org/uk/cases/UKEAT/2021/20_0072_20_1003.html