The question
We have an employee who was relocated in 2007 to a different work venue.
He was entitled to claim a reorganisation allowance for a period of three years after the move and failed to claim at the time, but has now asked whether it can be paid in retrospect.
Our policy neither says that he can or can’t. My view is that it’s too late and it was his responsibility to complete the required form and get it approved at the time. What is the legal position on this?
The legal verdict
Adam Partington, solicitor at Speechly Bircham
Assessing whether the employee has a right to claim for the reorganisation allowance will depend on a variety of factors.
Such factors include the precise terms of both the individual’s contract and your reorganisation policy; how the policy normally operates in practice; any other communications that the company has issued on this topic, and any relevant communications with the individual concerned (whether verbal or written).
Also relevant could be the reason behind the individual’s delay in requesting the allowance in the first place. Just as pertinent is to establish whether this issue, or a similar one, has occurred with anyone else, and how it was handled.
Once this analysis has been carried out, you will be better placed to determine whether the individual has a sound basis for claiming that they are entitled to the allowance, and the risks involved if you deny this request such as a potential discrimination or constructive dismissal case.
Such information will help you to decide on how to frame an appropriate response.
Adam Partington is a solicitor at Speechly Bircham LLP.
Andrew Crudge, solicitor at Thomas Eggar
The starting point when considering this issue would be to look at the wording of your policy. You mention that the policy doesn’t specify whether your employee can or can’t now claim this allowance.
However, as the allowance runs for three years, it could be interpreted as meaning that it is only possible to claim the payment during that time (although, of course, this would depend on exactly how the policy is worded).
The policy may also contain other wording that states you have discretion as to how the entitlement is exercised, or that indicates the policy itself is not contractual.
If the policy isn’t contractual, you may be able to show that you are not (and never were) under a contractual obligation to make the payment. However, it is more likely that the obligation will be considered contractual – given the seemingly clear belief of the employee that they can claim this allowance.
So in the absence of wording limiting the time by which the payment must be claimed, it is possible that the employee might be able to show that he still has a right to claim it under this contractual provision.
To counter this situation, you could argue that it would produce an absurd result and that it was clearly not your, or the employee’s, intention for him to be able to claim the allowance such a long time after the relocation.
However, given that the policy wording was, of course, drafted by you as the employer, the uncertainty is more likely to be interpreted in favour of the employee.
Where the allowance relates to repayment for specific costs, there may be a requirement in the policy for the employee to provide receipts or other evidence in order to claim the allowance. So you may be able to refuse to make the payment if he is unable to provide them.
But if he is not required to produce such evidence, or if he can produce it, it would be much harder for you to argue that the allowance does not have to be paid.
Andrew Crudge is a solicitor in Thomas Eggar‘s business services team.
