IMPLIED TERMS

18 April 2011

An appeal tribunal held that a term requiring an employee to sign a compromise agreement before receiving an enhanced redundancy payment could be ‘implied’.

Daniel Barnett’s Employment Law Bulletin reports:

The Court of Appeal has handed down its decision in Garratt v Mirror Group Newspapers, which is an interesting case about the implication of terms into an employment contract. It was held that a term requiring Mr Garratt to sign a compromise agreement before receiving an enhanced redundancy payment could be implied because:

• No employee had been paid an enhanced redundancy payment without signing a compromise agreement since 1993
• The requirement to sign a compromise agreement was expressly notified to all employees identified as redundant and the signing of such an agreement was an automatic consequence of being dismissed as redundant
• No employee, other than Mr Garratt, has sought to insist on a contractual right to an enhanced redundancy payment in the absence of a signed compromise agreement
• Before the redundancy process started, Mr Garratt knew that he would have to sign a compromise agreement in order to get the enhanced redundancy payment provided by his contract