Ex Gratia Payments and Notice Pay

22nd July 2011

In the recent case of Publicis Consultants v O'Farrell, it was held that Miss O'Farrell, an employee of the Company, was entitled to 3 months' notice pay, but she was dismissed with only four days' notice. .

In her dismissal letter it stated that she would receive an ex gratia payment equivalent to three months' salary which was duly paid to her by her employer, Publicis Consultants.

When Miss O'Farrell subsequently brought a claim against her employer for unpaid notice pay, Publicis Consultants stated that the ex gratia payment made was in respect of notice pay and therefore Miss O'Farrell was not due any further payment.

After considering the matter, the Employment Tribunal decided that the wording of the dismissal letter showed the payment made to be an ex gratia payment and not notice pay. The Tribunal said that as Publicis had expressly stated in Miss O'Farrell's dismissal letter that it was an ex gratia payment, they had no option but to believe that this was their intention.

This case highlights the importance of precision and clarity when issuing documents. Publicis Consultants obviously did not wish to make this payment as an ex gratia gift, but due to the poorly worded document they ended up having to pay Miss O'Farrell at least double of what they originally intended to. Proper, timely legal advice would have prevented this from occurring and saved Publicis Consultants a substantial sum of money.

For further information contact employment@thomas-carroll.co.uk

Disclaimer: This article is designed to keep readers abreast of current developments. It is not intended to be a comprehensive statement of law and specialist legal advice should always be sought in relation to any particular circumstance. Therefore, Thomas, Carroll Management Services is unable to accept liability for any errors or facts or opinion contained within.