Employees argued that enhanced redundancy payments had been implied into their contracts by custom and practice. Although there was no written policy, a consistent practice of offering enhanced payments had been operated for 20 years. In more recent years, there was limited evidence about what, if any, policy had been applied. Were the employees entitled to the enhanced payments?
Yes. Historically, there was significant evidence of a consistent practice. Although there was only limited evidence in recent times, a contractual term could be implied from 2006. There was no evidence to show that the term in question had been varied after that date. This meant that the enhanced package applied to redundancies which took place in 2012.
Employers should take care to make clear to employees, on each occasion, that any enhanced redundancy payments are discretionary. If employers invariably make enhanced redundancy payments according to a specific formula, they should consider varying the package offered from time to time.
Peacock Stores v. Peregrine and Ors UKEAT/0315/13. A link to the case is here.