In Keeley v Fosroc International Limited the Court Of Appeal (CA) held that an enhanced redundancy provision contained in the handbook was “apt” to be incorporated into an employee’s employment contract and on the facts here was so incorporated.
The court reasoned because the redundancy provision was phrased in terms of entitlement it was incorporated whereas other parts of the handbook was aspirational and procedural and hence non-contractual and hence was not incorporated
The decision follows earlier cases like Kaur v MG Rover Group Limited which decided that handbooks and manuals could form part of the contract if the terms contained within were contractual in nature.
That said even if so incorporated any term drafted should be specific and certain as otherwise a court may not be able to enforce it.
In this case there was only a written statement of terms plus a reference to the handbook in question as opposed to a fully-fledged employment agreement. The handbook made reference to redundancy payment as an “entitlement”(hence pay in lieu of notice-PILON-and taxable as opposed to damages-see website search for more of the same) but did not provide any mechanism for the calculation of this.
The employee in question Mr Keeley did not receive enhanced redundancy and therefore sued for breach of contract.
The CA overturned the earlier High Court (HC) decision and held that the HC had erred in its analysis of the incorporation issue since the wording on its own was clearly of contractual intent and was not negated anywhere else in the agreement so that even though “marooned” in a sea of aspirational clauses this did not detract from its narrow effect.
