Home News Business Law Negotiating a Severance Package? Consult a Lawyer to Obtain a Fair Deal

Negotiating a Severance Package? Consult a Lawyer to Obtain a Fair Deal

If you lose your job, negotiating a severance package can be a complex task and it almost always pays dividends to take professional advice. That was certainly so in one case concerning a manager who asserted that his employer was contractually bound to let him keep his company car after he was made redundant.

The manager was dismissed by reason of redundancy after his employer ceased to trade in its then current form. He said he was assured that he would be allowed to keep the car as part of his severance deal, but the employer reneged on that part of his package. His claim in respect of the car was upheld by an Employment Tribunal (ET), which ordered the employer to pay him £8,400 in damages, that sum representing the value of the vehicle.

Ruling on the employer’s appeal against that outcome, the Employment Appeal Tribunal (EAT) rejected arguments that a written proposal to give him the car was gratuitous and unenforceable. A firm offer had been made to transfer ownership of the car to him as part of an overall severance deal and the ET’s conclusions in that respect accorded with industrial reality and common sense.

In upholding the appeal, however, the EAT found that, having mounted an internal appeal against his severance terms, the manager had not accepted that offer. The ET erred in concluding that he could accept part of the proposed deal – the car – whilst rejecting, or seeking to improve upon, other parts of his package. In the absence of acceptance, the negotiations had not crystallised into a contractually binding agreement.

The manager’s case was sent back to a freshly constituted ET for reconsideration. At that hearing, it would be open to him to argue that his boss had also made a freestanding oral offer to let him keep the car in consideration of his agreement to work on specific projects during his notice period.

Published in
26 July 2021
Last Updated
10 August 2021