Q&As

An employee was employed by company A who operated an enhanced, purportedly non-contractual, redundancy policy. On a relevant transfer under TUPE 2006, to company B, it was agreed that company A’s enhanced policy would remain in place for one year from the date of that transfer (‘one-year period’). A second relevant transfer under TUPE 2006 (within the one-year period) transferred the employee to company C, which confirmed that pension contributions, medical insurance and ‘any other benefits’ would be maintained. Shortly afterwards, within the one-year period, company C began a redundancy consultation. The employee was then (outside the one-year period) granted voluntary redundancy and their employment was later terminated on that basis. Does the employee have the right to be paid a redundancy payment under the enhanced non-contractual policy, or statutory redundancy pay only?

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Published on LexisPSL on 24/01/2020

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • An employee was employed by company A who operated an enhanced, purportedly non-contractual, redundancy policy. On a relevant transfer under TUPE 2006, to company B, it was agreed that company A’s enhanced policy would remain in place for one year from the date of that transfer (‘one-year period’). A second relevant transfer under TUPE 2006 (within the one-year period) transferred the employee to company C, which confirmed that pension contributions, medical insurance and ‘any other benefits’ would be maintained. Shortly afterwards, within the one-year period, company C began a redundancy consultation. The employee was then (outside the one-year period) granted voluntary redundancy and their employment was later terminated on that basis. Does the employee have the right to be paid a redundancy payment under the enhanced non-contractual policy, or statutory redundancy pay only?
  • Enhanced redundancy payments
  • TUPE 2006
  • Transfer of rights and liabilities
  • Variation of contract terms

Enhanced redundancy payments

It is relatively common for employers, particularly larger employers and those that are unionised, to pay redundancy payments to redundant employees which are in excess of the statutory minimum under the statutory redundancy payments scheme. The employer may have an established written policy which sets out what employees can expect to be paid as such enhanced redundancy payments (some policies may, expressly or impliedly, be incorporated as part of the employee’s contractual terms of employment or alternatively, such policies may be expressed to be purely discretionary and not form part of the contractual terms) or the employer may decide, at its discretion, to set up a one-off arrangement for a particular redundancy exercise. Sometimes there may simply be an established custom and practice of making enhanced redundancy payments which may or may not, depending on the circumstances, have become an implied contractual term of employment.

See Practice Note: Contractual redundancy payments.

TUPE 2006

Relevant transfers under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246 are:

  1. business transfers—involving the transfer of an undertaking or business, or part of

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