Enhanced redundancy pay implied by custom and practice?

Park Cakes Ltd v Shumba and others [2013] EWCA Civ 974 dealt with the question of whether an employer’s enhanced redundancy package had been implied into employees’ contracts of employment by custom and practice.

There has been much case law on this subject over the years and the general position is that an enhanced package cannot become implied unless the policy has at least been drawn to employees’ attention or has been followed without exception for a substantial period of time (Duke v Reliance Systems Ltd [1982] IRLR 347).

In this case, the employees had been able to show that, while their contracts of employment made no mention of the enhanced redundancy package, there had been a group policy of normally paying the package and it also formed part of the employer’s HR manual (and would have been available on request from HR). The tribunal initially dismissed their claims on the basis that the package had not been drawn to the employees’ attention. It was also not persuaded that the policy had been ‘followed without exception’ previously…

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