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Redundancy provisions in staff handbook contractually binding

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Judges in the court of appeal have unanimously decided that if a staff handbook contains reference to an entitlement to an enhanced redundancy payment, then it is part of the employee’s contract.

Therefore, an employee who is made redundant could bring a claim for breach of contract if the enhanced payment was not given as stated in the handbook.

The case in question is Keeley v Fosroc International Ltd, where the staff handbook – not unusually – contained a large number of provisions which formed part of the contract, such as disciplinary procedures.

It also said that employees with two or more years service were ‘entitled’ to receive an enhanced redundancy payment.

Lord Justice Auld said that provision for redundancy was now a widely accepted part of employment contracts and that because the entitlement was expressed in the staff handbook which contained other contractual terms then it too was part of the contract.

One Response

  1. Judgement
    This case is significant and should cause employers to think about what they do and do not sayin handbooks. Having read Lord Auld’s judgement it was based on the facts and could have gone either way

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