Facts
Mr Harlow asserted that on being made redundant he was entitled to an enhanced redundancy payment of £60,000 in excess of his statutory entitlement by virtue of inclusion of the provisions of Artemis’ redundancy policy into his contract of employment. He maintained that as the policy had been published in the company’s handbook, the provision for an enhanced payment had become an express term of his contract of employment.
Artemis denied that the policy formed part of Mr Harlow’s contract of employment. It argued that the written policy had been changed unilaterally on a number of occasions since it had been published and that any enhanced payments that had been made in accordance with the provisions of the policy were made on a purely ‘ex gratia’ basis rather than as a legal entitlement.
High Court’s findings
The High Court held that Artemis’ provision for enhanced redundancy payments contained in its redundancy policy was an express term of Mr Harlow’s contract of employment.
The Court concluded that the policy was part of Artemis’ handbook, notwithstanding that the bulk of the Company’s handbook was made up of a collection of individual policies kept only in an electronic format. The Court also took note of the fact that the policy was located within a section of the Company’s intranet referred to as “employee benefits and rights”, even though it was not in the section which was expressly referred to as contractual.
As Artemis’ practice for a number of years had been to make enhanced payments in line with the redundancy policy, the Court found that the provisions of the policy in this regard would therefore have become an implied term of Mr Harlow’s contract by virtue of custom and practice, even if it hadn’t be found to be an express contractual term.
The Court provided confirmation that where an employer attempts to unilaterally change contractual terms which do not immediately impinge on employees, for example, redundancy terms, which only impact on employees at the time of termination, the fact that the employee continues to work, notwithstanding knowledge of the asserted change, does not necessarily mean that the employee can be taken to have accepted the change.
Comment
The status of enhanced redundancy payments schemes is becoming particularly relevant in the current difficult economic climate and this case demonstrates the risks of failing to consider fully the potential status of such policies when undertaking a redundancy exercise.
Christopher Harlow v Artemis International Corporation Limited [2208] EWHC 1126 (QB)