Enhanced Redundancy Payments

Keeley v Fosroc International Ltd is relevant to any employer considering redundancy and is a warning that the wording of any formal redundancy policy needs to be taken into account before any redundancy procedure is initiated.

In making Keeley redundant Fosroc ticked all the procedural boxes for individual redundancy consultation but offered statutory minimum redundancy pay.

This was in contrast to the way things had been done in the past and the company felt that the rather woolly statements about the 'entitlement' of staff to receive redundancy pay beyond the statutory
minimum provided them with enough discretion to refuse enhanced payment.
 
Keeley put forward an argument that enhanced pay was custom and practice and also a right described in the handbook. In considering the case the High Court reviewed the origin of the handbook and its specific place in personnel matters at Fosroc, it had been agreed by the Trade Union and Management to make the handbook contractual and its specific language (i.e. enhanced payments described as an 'entitlement') meant that the Court dismissed arguments about Management discretion even though there was no specific written formula for enhancement payments, enhancement was never the less a contractual right.