Thomas and Others v FW Farnsworth Ltd (ta Pizza Factory): EA-2020-000068-BA

Judgment relating to whether Claimants were entitled to enhanced statutory redundancy payments due to either the incorporation of a collective agreement from 1999 into their employment contracts, or the implication of a term for enhanced payments by custom and practice.

The Claimants were made redundant by the Respondent, the ‘Pizza Factory’, in 2017. Whilst they had received statutory redundancy payments, they claimed that they were entitled to more under contract; either on the basis of a collective agreement from 1999 which had been inserted into their employment contracts, or because a term for this had been implied into their contracts by custom and practice. Their claims were dismissed by the Employment Tribunal (ET). Applying the principles relating to when a term should be implied into an employment contract by custom and practice from the case of Park Cakes Ltd v Shumba [2013] IRLR 800, the ET held that the relevant circumstances must be looked at holistically. In particular,

“Consistent payment of enhanced redundancy by an employer over a period of time does not in and of itself suggest that there is a legal obligation to pay. It only does so if one takes the view that employers are solely interested in their short-term profits and would never make payments they were not legally obliged to make.”

The Employment Appeal Tribunal (EAT) dismissed the appeal. It was held that the ET had sufficiently applied the principles in the case of Shumba and considered all the facts available to it when making its decision. The Claimants’ contention that the ET’s findings were perverse as the Respondents in both the present case and Shumba had been part of the same group of companies, and therefore that the case should not have been distinguished from Shumba, was inaccurate. The Respondents were not the same in both cases and this was consequently an insufficient reason for arguing against the ET’s decision which distinguished between the two cases.

Published: 25/09/2021 12:21

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