Hello and welcome back to your weekly case law update. Last week we looked at disability discrimination.
This week we look at whether an express term in a contract of employment can be subject to a ‘limiting’ implied term.
The interesting decision in this case by the Privy Council (on appeal from Trinidad and Tobago but essentially applying English common law) is an example of how an implied term can complement a particular express term in order to make it workable.
In this case the Claimant Mr Ali was a longstanding employee and was given financial help to undertake further study.
The express agreement stated that his employer would not seek repayment if the Claimant worked for them for a further 5 years.
In fact, a year and a half after returning from his studies there was a redundancy situation at work and the Claimant volunteered and took redundancy. The employer set off the study payment from his redundancy payment. The Trinidad and Tobago courts held that it could and the case was sent to the Privy Council on appeal.
The main question is whether an express term can be subject to a ‘limiting’ implied term. Marks and Spencer plc v BNP states that:
‘if a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to the state of circumstances, underwhich alone the arrangement can be operative’.
So did the employer do anything on his own initiative to prevent the employee from working for the 5 year pay back period? If it did then the repayment would not be required.
The employee declared that the redundancy had terminated his employment. The problem was that he volunteered for redundancy. He would not have been made compulsorily redundant if he hadn’t volunteered. On that basis it was held that the employer had not ‘prevented the employment continuing’ and the employer therefore had the right to repayment.
The points to take away:
Ensure that your training agreements expressly state the:
- Length of the payback period
- The circumstances in which re-payment applies during the pay back period.
- You can, if you wish, include voluntary and compulsory redundancy.
When drafting bear in mind:
- An implied term can never contradict an express term.
Careful drafting avoids court cases:
- Had the express term been stated to include voluntary or compulsory redundancy, the case would never have been brought.