Employee’s contract entitled him to benefits of income protection

The Court of Appeal has ruled that a clause in a worker’s contract entitling him to a 5% rise in sick pay each year should be applied even though his employers amended their policy two years after his employment began.

Joanne Stronach Director and Head of Employment & HR reports on this recent case.

Joel Langton worked for Amdocs Systems Groups Ltd from 2003. 

His contract included Clause 6, which entitled him to benefits set out in the staff manual and his offer letter. 

Langton’s offer letter outlined his Income Protection Plan (IPP), which would pay staff on long-term sick leave 75% of their annual salary. The payments under the IPP would increase by 5% annually to provide some protection from inflation. 

In 2009, Langton went on long-term sickness absence and began to receive IPP payments. In 2015 he realised that the 5% annual escalator had never been applied and he brought a claim for unlawful deductions from wages. 

Amdocs argued that the staff manual had been amended in 2005 allowing it to vary the extent of the IPP from time to time. The escalator had also been removed from the insurance policy in 2008. 

The case went all the way to the Court of Appeal, which ruled in favour of Langton. In 2003, he was sent and read the offer letter, the summary of benefits attached to it and the contract of service. 

He was not given a copy of, or told about, the updated 2005 staff manual, although it was placed on the company intranet. 

It was clear in 2003 that the terms of the contract were contained in the documents that Langton had been sent. The summary was entirely clear and included the escalator. 

The contract of service did allow Amdocs to vary the contents of the staff manual but only on the basis that such amendments would be communicated to each employee individually. 

That had not been the case, so Amdocs were not within their rights to overrule the payment terms from the original contract. 

For more information about the issues raised in this article or any aspect of employment law please contact Joanne on 01228 516666 or click here to send her an email.