Mr Cavenagh was the company's managing director before being
made redundant. His contract provided for six months' pay in
lieu of notice. Before the company paid up, it discovered that Mr
Cavenagh had been guilty of gross misconduct – there had
been an unauthorised company payment of £10,000 into his
pension fund. In light of its discovery, the company refused to pay
him the notice, arguing that Mr Cavenagh's conduct had
repudiated the contract and the company had accepted that
repudiation.
The question was could the company escape liability for the 6
months' pay based on facts that weren't known to it at the
time of dismissal? The court held that it could and dismissed Mr
Cavenagh's claim.
He won on appeal. The Court of Appeal held that, in line with
contractual obligations and the employer's decision to dispense
with the notice period, a payment in lieu was due. Had dismissal
been for misconduct then the situation would have been very
different; the company would have been liable to pay salary and
other benefits accrued to the date of dismissal, and no payment in
lieu.
The court went on to say that where an employer chooses to
terminate a contract on notice and offers payment in lieu, it is
looking for a clean break and accepts the risk of discovering
something which could have justified a summary dismissal. There was
nothing in Mr Cavenagh's contract entitling the company to
withhold payment if misconduct later came to its attention. The
payment in lieu was a debt properly due.
Thomas Eggar LLP is a limited liability partnership
registered in England and Wales under registered number OC326278
whose registered office is at The Corn Exchange, Baffin's Lane,
Chichester, West Sussex, PO19 1GE (VAT number 991259583). The word
'partner' refers to a member of the LLP, or an employee or
consultant with equivalent standing and qualifications. A list of
the members of the LLP is displayed at the above address, together
with a list of those non-members who are designated as partners.
Regulated by the Solicitors Regulation Authority. Lexcel and
Investors in People accredited.
Thomas Eggar LLP is not authorised by the Financial
Services Authority. However, we are included on the register
maintained by the Financial Services Authority so that we can carry
on insurance mediation activity which is broadly the advising on,
selling and administering of insurance contracts. This part of our
business, including arrangements for complaints and redress if
something goes wrong, is regulated by the Solicitors Regulation
Authority. The register can be accessed via the Financial Services
Authority website. We can also provide certain further limited
investment services to clients if those services are incidental to
the professional services we have been engaged to provide as
solicitors.
Thesis Asset Management plc, our associated financial
services company, provides a comprehensive range of investment
services and advice. Thesis is owned by members of Thomas Eggar LLP
but is independent of and separate to it. No lawyer connected with
Thomas Eggar LLP provides services through Thesis as a practicing
lawyer regulated by the Solicitors Regulation Authority. Thesis is
authorised and regulated by the Financial Services Authority.
Thesis has its own framework of investor protection and
professional indemnity cover but Thesis clients do not enjoy the
statutory protection of solicitors' clients.
The contents of this article are intended as guidelines for
clients and other readers. It is not a substitute for considered
advice on specific issues. Consequently, we cannot accept any
responsibility for this information or for any errors or
omissions.
Specific Questions relating to this article should be addressed directly to the author.
The Engineering and Construction Contract (NEC3) and FIDIC Conditions of Contract for EPC/Turnkey Projects (FIDIC Silver) are both popular standard forms of engineering and construction contract.
In October 2012, the Court of Appeal confirmed that a Service Provision Change ("SPC") TUPE transfer can only occur where the client who receives the service, before and after the change, remains the same (Hunter v McCarrick [2012] EWCA Civ 1399).
The ICO has published guidance which highlights the dangers of allowing your employees to use their own devices for work emails and other work related uses.
The Agency Workers Regulations 2011 introduced a requirement for employers to provide employee representatives with information on agency workers during TUPE and collective redundancy consultations.
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