Allsop v Christiani & Nielsen Ltd

A claim under Part II of the Employment Rights Act 1996 is confined to unpaid, quantified or quantifiable contractual sums. It cannot be used to obtain damages for an employer's alleged failure to exercise a contractual discretion or to facilitate an insurance claim.

A complaint concerns deductions made when it is presented, not prospective losses. Holiday pay also requires the employee to give notice of the intended leave. An administrator adopts an employment contract only through conduct amounting to an election to assume a separate liability in the administration. A tribunal may refuse late amendments which introduce hopeless, time-barred claims after balancing the relevant hardship.

The claimant appealed from the decision of Employment Judge Goodier, sitting at a pre-hearing review in the Birmingham Employment Tribunal. The Employment Judge held that the claimant's employment ended in February 2000, that most unlawful-deduction complaints were out of time, and that the remaining permanent health insurance complaint was in substance a claim for contractual damages.

The Employment Judge also found that the administrators had not adopted the contract of employment and refused permission to add further claims. On appeal, the claimant challenged the exclusion of without-prejudice material, the effective date of termination, adoption, the statutory jurisdiction for deductions claims, and the refusal of amendments.

1. Appeal dismissed. The Employment Judge made no error of law and his conclusions were not perverse.

2. The February 2000 letters clearly communicated that the claimant's employment had ended. A reasonable employee would understand the first letter to take immediate effect on receipt; in any event, the later letter removed any possible uncertainty. Any entitlement to notice pay would sound in damages for wrongful dismissal. Later events did not displace that conclusion.

3. The disputed correspondence and later discussions were privileged settlement material. They neither established a concluded agreement nor had material evidential value on termination.

4. The Employment Judge correctly applied Coors Brewers Ltd v Adcock and others [2007] ICR 983. The unlawful-deduction regime is for straightforward claims to sums presently and quantifiably due. Claims based on an alleged failure to set salary, review subsistence, award salary increases, provide a car, or facilitate benefits under an income-protection scheme were claims for contractual damages and fell outside Part II of the Employment Rights Act 1996.

5. The claimant could not claim prospective deductions or sums accruing after retirement under that regime. His holiday-pay claim also failed because he had not notified the employer that he intended any part of his sickness absence to count as annual leave.

6. The administrators had not adopted the contract. Applying Powdrill v Watson [1995] 2 AC 394 and Re Antal International Limited [2003] EWHC 1339 CH, adoption required conduct amounting to an election to treat a continuing contract as creating a separate administration liability. The administrators' letter was directed to potential Redundancy Payments Service claims, not an assumption of liability, and no salary or sick pay was paid.

7. The refusal of amendments was within the Employment Judge's discretion. The proposed claims were fresh, very late, legally misconceived and would prejudice the liquidation and its creditors. The question whether amendments may add causes of action arising after an ET1 was left unresolved as unnecessary.

• Employment Appeal Tribunal: appeal dismissed; the decision of Employment Judge Goodier was upheld.
• Employment Tribunal: at a pre-hearing review, the claimant's unlawful-deduction claims were dismissed for want of jurisdiction or as out of time, and permission to amend was refused.