Many organisations make enhanced redundancy payments in accordance with a non-contractual discretionary redundancy policy. The policy is never published but payments are repeatedly made every time a round of redundancies are announced. The payments are usually calculated in accordance with the lenght of service and multiplied by a number of weeks or half weeks.
A problem could arise for the organisation if the company simply continues to make the enhanced payments without first considering the discretion because the policy could become a term of employment through custom and practice.
The same principle applies to bonus payments under a non contractual discretionary bonus scheme. Unless employers exercise discretion before each payment, disputes can arise if a payment is not made or a payment is made but at a lower rate than anticipated. This frequently happens at the termination of employment. The risk for the employer is that if an employe... Read more