Kerrigan & Ors v Ballyrashane Co-Op Agriculture & Dairy Society ((Termination Payment)  (1990) Ltd 16 May 2002)
THE INDUSTRIAL TRIBUNALS

CASE REF:	1342/01
1343/01
1344/01

APPLICANTS:	Noel Kerrigan
			William John McDade
			David Dickson

RESPONDENT:	Ballyrashane Co-Op Agriculture & Dairy Society (1990) Ltd 

DECISION
The unanimous decision of the tribunal is that:

(i)	the tribunal finds that the sum of £2,570.20 is due to Mr Kerrigan and orders the Respondent to pay that amount to the applicant.  
(ii)	the tribunal finds that the sum of £3,216.27 is due to Mr McDade and orders the Respondent to pay that amount to that applicant. 
(iii)	the tribunal finds that the sum of £ 3667.20 is due to Mr Dickson and orders the Respondent to pay that amount to that applicant. 
   
Appearances:
The applicants were unrepresented.
The respondent was represented by Ms Beirrell, an employee of the respondent company.

Summary Decision.

1.	It was agreed that the respondent had made all the applicants redundant.  The last date of the applicants’ employment was the 3 February 2001.  All the applicants had been approached in November 2000 to agree to continue working for a given period, not to exceed twelve weeks, to allow the respondent sufficient time to place other employees in their posts.  This is a complaint by the applicants that the respondent had failed to pay them the monies agreed in November 2000 in return for them continuing in post from November to February 2001.  The respondent alleged that the applicants had received all monies due and that they were correct to deduct tax and National Insurance from the sums to be paid to the applicants.  

2.	The tribunal in reaching its decision considered the originating application, the Notice of Appearance by the respondent, oral evidence of the applicants and Ms Beirrell and the documentation furnished to the tribunal by the parties.

3.	From the evidence presented the tribunal found the following relevant facts and came to the following conclusions:-

4.	The agreement recorded in the letter of the 22 November 2000 advised the applicants that they would receive a payment equivalent to 10 weeks pay in consideration for them remaining in post after the 1 December 2000 until February 2001.  The letter did not state that the pay would be calculated on a basic 39½-hour week.  The applicants invariably worked in excess of 39½ hours every week.  The letter did not state whether the payment would be paid gross or nett.  The applicants Mr Dickson, Mr McDade and Mr Kerrigan received from the respondent in respect of the 10 weeks payment the sums of £2,372.80, £2,271.13 and £2,271.13 respectively.

5.	The average weekly gross wage for the applicants for the twelve weeks prior to the effective date of termination was agreed by the Parties as :-

(a)	  Mr Dickson £604.00, 
(b)	  Mr McDade £548.74 and 
(c)	  Mr Kerrigan £484.16.

6.	This was not a payment in lieu of notice of termination of employment as the applicants were clearly working their notice.  It was clearly a payment arising upon the termination of their employment, not for work done but in consideration of remaining in post and therefore unavailable to seek new or alternative employment.  

7.	It was clear that the respondent in seeking advice from the Inland Revenue helpline had not fully set out the circumstances of this payment.  This tribunal was not satisfied that the Inland Revenue had been clearly advised that this was not a payment for work done or in relation to notice of termination of employment.

8.	This tribunal concluded that it was clear that the parties intended the letter in November 2000 to set out the variation of their contractual terms of employment.  It is a normal rule of construction of terms of contract that any vagueness in the contract is correctly construed against the party responsible for the lack of clarity, namely the respondent.  It was clear that the applicants if they had left their employment in December 2000 would have received “a weeks wages” calculated with reference to Article 18 of the Employment Rights (Northern Ireland) Order 1996 (referred to as the 1996 Order).  Accordingly, in the absence of a specific term to the contrary, and giving the words their plain and literal meaning the tribunal concluded that the 10 weeks payment fell to be calculated in accordance with Article 18 of the 1996 Order.  

9.	The payment was clearly in return for the applicants remaining in post and therefore disadvantaging themselves regarding the seeking of alternative employment.  There was no express provision or discussion as to whether the sum would be paid gross or nett of tax.  However the payment was clearly in the nature of a golden handshake to be paid upon the termination of their employment.  It is this tribunals understanding that such payments, provided they amount to less than £30,000, can be paid gross to an employee.  It did not appear to this tribunal unreasonable for the applicants to have assumed that that payment would not be subject to tax.  While there was no advantage to the respondent as to whether the sum was paid gross or nett the tribunal concluded that the respondent must bear responsibility for ambiguities in its own document.  Accordingly the tribunal finds that the sum of £ 2570.47 is due and owing to Mr Kerrigan, the sum of £ 3667.20 is due and owing to Mr Dickson and the sum of £3216.27 is due and owing to Mr McDade and orders the respondent to pay those amounts to the applicants.

10.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990. 

Chairman:	

Date and place of hearing:  4 April 2002, Belfast

Date decision recorded in register and issued to parties: 16 May 2002