Top Trumps – contractual terms v custom & practice – discretionary payments and terms can become contractually binding by custom & practice. In a recent case decided by the Employment Appeal Tribunal (Park Cakes Ltd v Shumba & Others (2013)) the EAT held that employees transferred under TUPE were entitled to enhanced redundancy payments from the transferee as the transferor company had a wide group policy of paying them. What mattered was whether it was reasonable for the employees to believe they were automatically entitled to the payment. Contractual documents and practice in dealing with such payments should be carefully managed to avoid a costly error and pay out. Seek legal advice.
