Thread by @JasonBraier

1/ Thomas v FW Farnsworth: A useful reminder of the principles of Park Cakes v Shumba as to when terms of enhanced redundancy payment are implied into employment contracts by custom & practice.

bailii.org/uk/cases/UKEAT…

#ukemplaw

2/ 27 workers at Pizza Factory were made redundant & paid statutory redundancy pay plus 10%. They claimed this was in breach of a contractual entitlement to enhanced redundancy pay of double the number of statutory weeks & no cap on a week's salary.

3/ Before the ET, the employees asserted their entitlement on 2 alternative bases: (i) a '1999 redundancy agreement' was incorporated & applied to all future redundancies; (ii) a term on enhanced redundancy pay was implied by custom & practice.

4/ The ET also had to consider whether any incorporated or applied term was superseded by a recognition agreement with Unite.

5/ The ET decided there wasn't incorporation of the 1999 agreement, nor a term implied by custom & practice, & the Recognition Agreement wouldn't have affected incorporation or an applied term.

The only issue before the EAT was on implication by custom & practice.

6/ The ET found that between 1999 & 2009 companies in the same group as T's employer paid enhanced redundancy payments on similar terms to the 1999 agreement though potentially with important differences in the formula.

7/ It found such exercises were by way of informal ad hoc agreement. The ET wasn't satisfied enhanced redundancy was paid on the same or similar terms after 2008 although T and the other claimants believed it would be paid on such terms after 2008.

8/ The ET looked at the guidance in Shumba (pasted below), finding that each of the 6 factors pointed in this case either in a neutral direction or towards past enhanced redundancy payments being made as a matter of discretion rather than out of legal obligation.

9/ The claimants appealed on the basis that the ET had misapplied Shumba, also suggesting that given the group employer was the same in Shumba as in the present case, the ET should've taken into account that the EAT & CA in Shumba found an enhanced right to exist.

10/ The EAT noted that the 6 factors in Shumba are non-exhaustive & also shouldn't be used as a tick-box. Sometimes not all 6 will be relevant.

11/ As to the asserted misapplication of Shumba, the EAT found the ET made findings of fact it was entitled to make & gave them weight it was entitled to attribute. It was not a perverse decision, nor were the principles in Shumba misapplied.

12/ As regards the suggestion the ET should've taken account of the EAT & CA findings in Shumba because both cases concerned the same group companies, the EAT noted the employers involved were different. They had once been in the same group but not when the redundancies occurred.

13/ In any event, the EAT's decision in Shumba (upheld by the CA) was to remit the question of implication by custom & practice. There was no factual finding made on appeal which could be said to be binding.