Archive for the ‘Breach of Contract’ Category
By Sarah - Wednesday, March 3rd, 2010
More than 50% of workers do not expect a pay rise this year probably thankful they have a job! according to a new survey for February. Those that are expecting a pay rise are expecting one lower than the rate of inflation. Apparently 20% of the UK already spend more than they earn and people expect it to get worse this year.
Gloomy reading for employees, some employers are rubbing their hands with glee! Remember promise of an annual review does not mean an increase and I am yet to see a contract worded in such a way that an employee has a contractual right to a pay rise specified at a set amount/percentage every year. A pay review cannot of course mean a unilateral review downwards, although some employers have been asking employees to take pay cuts in the difficult economic times we have been experiencing.
Posted in Breach of Contract | No comments »
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By Liam - Thursday, January 14th, 2010
Some people may be enjoying the recent weather and snowy conditions. Snow can still be seen from the windows of the PJH Law offices, although it hasn’t been enough to keep us all out of the office.
For some people, the snow has been used as an excuse a reason for not attending work. In some cases the snow may genuinely prevent employees from getting to work and in others it may just be used as an excuse for a day off. Irrespective of whether the snow was genuinely so bad as to make getting to work impossible, the legal position is that if employees don’t attend work, they are not entitled to pay (unless their contract or employment says otherwise). Many employers have contractual terms about sick pay, but being prevented from getting to work because of snow is not sickness.
Employers are of course entitled to take a view in each case and decide to pay employees as a gesture of goodwill where, for example, they are satisfied that the snow caused geniuine problems getting to work.
Posted in Breach of Contract | 1 comment »
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By Sarah - Wednesday, October 28th, 2009
A chinese medicine store in London has lost its appeal against a Tribunal decision to award an ex-employee £25,000 in unused holiday and meal allowances. The employer, BTRT, had a total award made against them in September 2008 for £39,000 including a claim for unfair dismissal.
The employee worked for BTRT from 2001 to her dismissal in 2008. She had racked up 131 days of unused holidays only taking holiday on four days per year which were bank holidays when the shop was closed! The employer argued that she was not entitled to any holiday except for the last holiday year under the WTR but the ET found the holiday entitlement to be contractual and therefore it could be backdated. Interestingly this was despite the employee not having a s1 statement to that effect. Apparently the EAT were persuaded to leave the Judgment as it stood given the impplications of Ainsworth and Stringer which as we reported has recently been decided.
There was also an interesting mitigation arguement as BTRT argued the unfair dismissal award should have been reduced for failure to mitigate. The EAT held that the ET was correct in finding that it would not be reasonable to expect a person like the employee, when bowled over by her unexpected dismissal, to get straight back into the job market. This sounds like an arguement which could be run with most unfair dismissal cases but the Tribunal put this down to the employee’s personal circumstances. These included her shock at being dismissed and the way she was treated, her lack of English and feelings of isolation in London and finally her lack of money for food and to find another job. Make of that what you will!
Posted in Breach of Contract, Holidays, Unfair Dismissal | 1 comment »
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By Sarah - Thursday, October 15th, 2009
A new survey of nearly 700 young women found that 1 in 3 had been the victim of bullying in the last 6 months. Older women in senior positions were the main culprits. The survey gives a number of examples of bullying which unfortunately we frequently hear about. These include excessive work monitoring and criticism, isolation and exclusion, public humiliation and unrealistic targets.
Bullying in the workplace is not uncommon but can be quite hard to prove. It is hard to get enough to constitute a fundamental breach of contract but can be very unpleasant for the victim. When the victim gets into that cycle they can perceive the smallest things to be another example of bullying.
Posted in Breach of Contract | 2 comments »
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By Liam - Thursday, July 23rd, 2009
Breach of contract battles can, in some circumstances, be fought in either an Employment Tribunal or a County Court. It is essential that you pick the right battle ground.
At first appearances, Tribunals have a number of advantages. Claiming is free. There are (usually) no costs consequences if you lose (but on the downside you pay your own costs even if you win) and the process is less formal than in the County Court.
However, there are a number of traps in Tribunal. For example, in the Employment Tribunal, breach of contract complaints can only be presented if employment has terminated and Tribunals don’t have jurisdiction to consider complaints in respect of amounts in excess of £25,000.00.
So, if you want to sue for more than £25,000.00 or you are still in employment (for example suing for an unpaid bonus in an unquantified amount) you will need to claim in the county court.
If you want to sue for an unpaid bonus of a quantified amount (no matter whether more or less than £25,000.00) this can be done in an Employment Tribunal before employment has terminated as an unauthorised deduction from wages claim.
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By Liam - Wednesday, February 4th, 2009
The EAT have handed down judgment in Small & Others v Boots. The case discusses at some length whether a bonus is a contractual right or a discretionary benefit. Payment of the former can be enforced by the Courts. Payment of the latter can not.
Referring to a bonus as “discretionary” is not enough on its own to place a bonus in to the latter category as it can be ambiguous as to whether the discretion relates to the decision to offer the bonus at all, the amount to be paid, how it is to be paid or when it is to be paid. Employers who do not wish to be bound by a bonus scheme must therefore make it plain that the bonus is not contractual and the employer has complete discretion as to whether to provide a bonus scheme at all and if they do decide to provide a scheme, that they have complete discretion as to the amount, the calculation of the amount, the method of payment, the date of payment and any other conditions for payment (for example a requirement to be in employment at the time the bonus is to be paid).
Posted in Bonuses, Breach of Contract | No comments »
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By Philip - Monday, December 8th, 2008
The Uk economy has been divided into those who work in the City and those that don’t.
If you work in the City, seven figure salaries are not unusual and six and seven figure annual bonuses are (or were) commonplace.
The legal sector is no different with the City firms orbiting a different universe to the rest of the market.
The rest of the workers in the economy chug along on 5 figure salaries and the occasional 4 or 5 figure bonuses, the threat of redundancy and the guarantee of a depleted money purchase pension scheme.
Well just as the rewards in the City are high, this recent employment law case shows that the risks can be high. Mr A was working in the City as a “specialist variance swaps broker of pure exotic equity options” . This means, I think, that he bought and sold bits of paper which had some sort of financial value placed on them by the market, although I am probably doing him a great disservice and his job no doubt did involve adding to the sum of human happiness.
I digress. Mr A went and negotiated a job offer with another Company, Tullett Preon Group (TP).He signed a contract which contained the provision that if he did not join he would re-pay (as liquidated damages) the sum of 50% of his net annual salary. Given that his annual salary was to be £1 million, the liquidated damages clause meant that he had to pay a sum not unadjacent to £300k net.
As it happened Mr A decided to stay with his current employer, who in time honoured fashion probably only saw his real value when faced with a letter of resignation. In deciding to stay he also negotiated an indemnity clause with them in case TP brought any claims for breach of contract.
TP brought a claim against Mr A for liquidated damages and won. The argument that the clause was unenforceable for being a penalty clause did not wash.
Obviously this guy was seen by his current employer as a “rainmaker” but as with any rainmaker there is a fair chance of getting wet. In this particular case Mr A was smart enough to be holding a brolly, in the form of an indemnity.
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By Philip - Wednesday, December 3rd, 2008
Some questions about the conduct of disciplinary hearings are timeless-getting asked year in, year out. Two of those questions have recently been answered by the courts in a relatively unambiguous way.
Question 1:Is an employee entitled to bring a Solicitor into a disciplinary hearing?
Answer: In Kulkarni v Milton Keynes NHS Trust the High Court held that there was no implied right to bring a Solicitor to a disciplinary hearing, even if the allegation is one that potentially could amount to criminal conduct.
A Solicitor would obviously be permitted either if the disciplinary procedure expressly allowed for external representatives, or the Solicitor was the officer of a Trade Union recognised by the employer.
Question 2: Does an employer have to adjourn a disciplinary hearing at the employee’s request?
Answer: In Lakshmi v Mid Cheshire Hospital NHS Trust ( in a flurry of double negatives) the Judge held that it is a breach of the implied contractual term to act in good faith for an employer to decline a request made on apparently reasonable grounds to adjourn a disciplinary hearing in the absence of a good reason not to do so.
Well that settles that then.
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By Nicky - Thursday, September 18th, 2008
Penalty clauses are sometimes used by employers in an attempt to retain an employee for a certain period of time following a financial payout, usually in the case of bonuses. However, the question arises as to how enforceable are these clauses in reality?
The case of CMC v Zhang 2006 EWCA Civ 408 it was held that a clause in a compromise agreement was a penalty clause introduced as a deterrent intended to induce the employee not to breach any terms of the agreement. Breach of the terms would result in the monies being repayable. The House of Lords decided that this clause was not enforceable and that the sum of money must be an estimate of the damage, not extravagant and unconscionable compared to the actual loss following the breach. For more details click here.
Therefore, if an employer is intending to rely on a penalty clause then they would be wise to ensure that it is reasonable, narrow in scope and reflects a real estimate of the actual loss. Otherwise, if challenged, be prepared to lose!!!
Posted in Breach of Contract, Compromise Agreements | No comments »
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By Philip - Tuesday, June 10th, 2008
A question that is regularly asked is can an employer not pay an employee if that employee is in breach of contract. The question normally arises when the employment relationship ends.
The position is clear. Unless the employer has signed authority from the employer to authorise the deduction then no deduction is allowed.
The case reported here illustrates the point. An employment agency worker agreed with an employment agency to work for a client for a fixed term from January to May.
The worker only completed two days of the assignment and then left. The agency did not pay the worker on the basis that the client had not paid them and they believed the worker was in breach, having left 2 days into employment.
The EAT held that the failure to pay the wages amounted to an unlawful deduction as there was no lawful basis to withhold the sum due.
Posted in Breach of Contract | 2 comments »
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