Fotheringhame v Barclays Services Ltd

A re-engagement order may specify an amount payable for lost benefits and arrears as a term on which re-engagement is to take place. Where re-engagement does not take place, that conditional monetary term falls away and the distinct compensation regime for non-re-engagement applies.

Accordingly, the original re-engagement order is not a relevant decision requiring payment of money for the purposes of the Employment Tribunals (Interest) Order 1990. Interest cannot accrue on that conditional award after its condition has failed.

Obiter, an amount is ascertainable by reference to an order where the order supplies the formula and the remaining task is to identify contractual pay or benefits.

The claimant had been unfairly dismissed from a senior, high-earning position. In August 2018, the Employment Tribunal ordered his re-engagement and specified terms including payment for benefits and arrears between dismissal and re-engagement.

The respondent did not re-engage him. At a further remedy hearing in January 2019, the Tribunal awarded £947,585.20, less tax and National Insurance, but refused interest on the amount contemplated by the 2018 re-engagement order. The claimant appealed.

The central issue was whether the 2018 order was a relevant decision requiring payment of a sum of money under the Employment Tribunals (Interest) Order 1990, so as to attract interest.

1. Appeal dismissed. The Tribunal correctly held that the August 2018 re-engagement order was not a relevant decision under the Employment Tribunals (Interest) Order 1990.

2. Under section 115(2) of the Employment Rights Act 1996, the payment for benefits and arrears was a term on which re-engagement was to take place. It was conditional on re-engagement taking place; it was not an independently enforceable present obligation to pay money when the order was made.

3. The statutory scheme gave the employer a choice: re-engage the employee or become liable for the distinct awards under section 117(3). That construction followed the explanation in Mackenzie v The Chancellor, Masters and Scholars of the University of Cambridge 2019 4 All ER 289. When re-engagement did not take place, section 117 was engaged and the January 2019 award replaced the conditional 2018 award. Interest on the latter would be illogical because its condition had failed.

4. The remaining grounds concerning unfairness or delay added nothing to this construction. The appeal therefore failed.

5. Obiter, if the issue had arisen, an amount is “ascertainable” under article 2(2)(b) where the order provides the formula and calculation requires reference to contractual pay or benefits. Such reference is still by reference to the terms of the order.

• Employment Appeal Tribunal: Appeal dismissed; the January 2019 Employment Tribunal remedy decision refusing interest was upheld.
• Employment Tribunal: In August 2018, ordered re-engagement on specified terms. After re-engagement did not take place, it made a compensation award in January 2019 and refused interest on the amount contemplated by the earlier order.