In the recent case of Employment Appeal Tribunal (EAT) decision of Ugradar v. Lancashire Care NHS Foundation Trust UKEAT/0301/18, the EAT found that the Claimant was entitled to a statutory redundancy payment on top of the normal cap of £25,000 on breach of contract claims brought in the Employment Tribunal. This was notwithstanding that the whole amount claimed by the Claimant in respect of breach of contract and redundancy pay was calculated in accordance with Agenda for Change (NHS standard contractual terms).

Agenda for Change states:

“NHS contractual redundancy is an enhancement to an employee’s statutory redundancy entitlement, the statutory payment being offset against any contractual payment.”

In determining the sums due to Mrs Ugradar, the EAT concluded that the statutory redundancy payment needed to be offset against the contractual sums. The remaining contractual sum was subject to the £25,000 cap in the normal way. However, the contract did not (and could not) restrict her from recovering statutory redundancy pay. The EAT pointed out that any such attempt in Agenda for Change to alter the position would have been void by virtue of section 203 of the Employment Rights Act 1996.

Here the Claimant’s statutory redundancy entitlement was only £5,868. However, the current maximum statutory redundancy payment is £15,750. Accordingly, a misunderstanding about the method of calculation could in some cases be much more costly.