Claimant v SGS Limited
Outcome
Individual claims
The tribunal found no repudiatory breach of contract. The claimant had no contractual entitlement to a full bonus payment in December; bonus payments were discretionary and based on company performance. The tribunal found the respondent did not place constant pressure on the claimant every week, nor did it breach the implied term of trust and confidence. The procedural deficiency in issuing a warning without proper investigation did not amount to a repudiatory breach as it could be corrected on appeal and did not destroy the employment relationship.
The tribunal found the claimant's contract expressly stated entitlement to Statutory Sick Pay only. There was no contractual or implied term entitling the claimant to enhanced sick pay. Previous discretionary payments of full pay during sickness (on only two occasions 15 years ago under different ownership) did not create a contractual right via custom and practice. SSP was correctly paid during the notice period.
Facts
The claimant was employed as Office Manager by a scaffolding company from August 2007 until January 2024, a period of approximately 16.5 years. In February 2021, the Wescott Group acquired the business. The claimant's workload was reduced but he received substantial pay increases. The claimant resigned on 28 December 2023 citing five main reasons: non-payment of full bonus in December 2023, constant weekly pressure, lack of trust and communication, strained co-worker relationships, and issuance of a warning without proper investigation. He claimed constructive dismissal and unlawful deduction from wages (enhanced sick pay).
Decision
The tribunal dismissed both claims. It found no contractual entitlement to a full bonus payment in December — bonuses were discretionary and performance-based. The tribunal found no evidence that the respondent placed constant pressure on the claimant or breached the implied term of trust and confidence. While there were procedural defects in issuing a warning, this did not amount to a repudiatory breach. The tribunal also found no contractual or implied entitlement to enhanced sick pay; the contract expressly provided for SSP only, and previous discretionary payments did not create a contractual right.
Practical note
Discretionary bonus schemes, even if paid regularly and expressed as a percentage of salary, do not automatically become contractual entitlements absent clear contractual language or compelling evidence of custom and practice intended to create legal obligations; similarly, isolated discretionary payments of enhanced sick pay under previous ownership do not override express contractual terms providing for SSP only.
Legal authorities cited
Statutes
Case details
- Case number
- 6001664/2024
- Decision date
- 6 February 2025
- Hearing type
- full merits
- Hearing days
- 3
- Classification
- contested
Respondent
- Name
- SGS Limited
- Sector
- construction
- Represented
- Yes
- Rep type
- barrister
Employment details
- Role
- Office Manager
- Salary band
- £40,000–£50,000
- Service
- 17 years
Claimant representation
- Represented
- No