The Court of Appeal has found that, where an amount for a contractual payment such as overtime is not specified, the payment must be reasonable.
In this case, the employer argued that as no details had been specified, there was no contractual right for employees to be paid for overtime, even though they had received overtime payments in the past.
The Court found that:
- The law implied that a reasonable sum should be paid where no details were provided regarding the rate of payment.
- Significant consideration was given to the previous payments which the employer was unable to explain, although a contract is not to be held to exist solely by subsequent payment.
Key point: Employers should try to ensure that written terms for any payments are provided to avoid disappointed employees from bringing claims.
Driver v Air India Ltd