In the UK Employment Appeals Tribunal (EAT) case of Allen –v- TWR Systems (Appeal No. UKEAT/0083/12) the Tribunal held that Employment Tribunal erred in law in failing to consider whether an express promise in the Employee Handbook was contractual in nature; and failed to address that express promise in the Employee Handbook and subsequent promises in determining whether the enhanced redundancy payments had been incorporated in the contract
In 1999 TRW agreed a policy with its works council for enhanced redundancy payments. The promise was subsequently added to the employee handbook and repeated in letters to the workforce on a number of occasions thereafter. The Employment Tribunal held, however, that because the policy was not referred to in the written statement of terms, it was not incorporated into employment contracts.
The EAT overturned the Tribunal decision. In Keeley v Fosroc International the Court of Appeal held that if provisions about severance payments were apt for incorporation it was no obstacle in principle that they were in a Handbook, as opposed to a statement of terms.
The Tribunal was therefore wrong in this case to ignore the works council agreement, the express promise in the employee handbook, and the subsequent repeated promises in correspondence, in determining whether the enhanced redundancy payments had been incorporated into the contract of employment. As the EAT put it: “how can an employer, having acted in this way, sensibly deny that employees could have a reasonable expectation that payment would be made in accordance with the promise?”
The case was remitted to a differently constituted employment tribunal to address these matters.
This case confirms that the Court will look to all documentation and events surrounding the working relationship and will not restrict itself to what is recorded in the written Contract of Employment.