NHS Worker Wins Appeal Over Redundancy Pay Entitlement
An NHS worker has won an appeal, confirming her right to both contractual and statutory redundancy payments, plus a critique of outdated tribunal caps.
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NHS Employee Secures Full Redundancy Pay After Tribunal Win
A significant employment appeal has seen an NHS worker, Mrs Sofiyah Ugradar, successfully challenge a previous tribunal ruling that capped her redundancy payment and denied her a statutory redundancy payment. The Employment Appeal Tribunal (EAT) has clarified that she is entitled to both her contractual redundancy payment, and a statutory redundancy payment, in addition to each other.
Contractual Entitlements Under Scrutiny
Mrs Ugradar, employed by Lancashire Care NHS Foundation Trust, was dismissed due to redundancy. Her employment terms, based on "Agenda for Change" conditions, provided a substantial contractual redundancy payment. This contractual scheme was designed as an enhancement to the statutory redundancy entitlement, with the statutory payment intended to be offset against the contractual amount. Calculations showed Mrs Ugradar was due £43,949.04 under the contractual terms.
The Tribunal's Initial Decision and the Appeal
However, the initial Employment Tribunal (ET) ruled that while Mrs Ugradar was entitled to the contractual payment, it was capped at £25,000 due to a statutory limit on claims heard by the ET under the Employment Tribunals (Extension of Jurisdiction) (England and Wales) Order 1994. Critically, the ET also rejected her claim for a statutory redundancy payment altogether, concluding it was subsumed within the contractual entitlement and thus subject to the same cap.
Mrs Ugradar appealed this decision, arguing she was entitled to the statutory payment in addition to the contractual one, even though it would be offset. Her legal team argued that the contractual terms did not, and could not, exclude her statutory rights, particularly given the absence of a specific exemption order under the Employment Rights Act 1996. They also pointed out that the statutory redundancy payment element of her contractual entitlement was £5,868.00.
EAT Upholds Statutory Rights and Criticises Outdated Cap
The EAT found that the ET had erred in law. They rejected the Trust's argument, which relied on the doctrine of merger from the case of Fraser v HLMAD Limited, stating that there were distinct contractual and statutory causes of action. The tribunal confirmed that Mrs Ugradar met all conditions for a statutory redundancy payment and that the ET had a duty to determine this claim.
Furthermore, the EAT clarified the interaction between the contractual and statutory payments. The statutory payment should be offset against the full contractual amount of £43,949.04, not the capped amount. This meant the net contractual payment due was £38,071.04. Given the ET's jurisdiction cap of £25,000, Mrs Ugradar was awarded the maximum contractual amount. However, the EAT ruled that the statutory redundancy payment was a separate entitlement and not subject to the same cap, meaning she was entitled to receive it as well.
The judgment also included a pointed commentary on the £25,000 statutory cap, which has remained unchanged for a quarter of a century. The EAT suggested that this outdated limit can lead to real injustice, forcing employees to forego significant portions of their rightful entitlement to bring claims within the tribunal system. They noted that increasing the cap in line with inflation would prevent such losses.
**Read the entire judgment here:** **Mrs S Ugradar v Lancashire Care NHS Foundation Trust UKEAT/0301/18/BA**
