A few too many drinks can cause managers’ tongues to loosen – and get them into trouble.

What if they offer an employee a promotion, pay rise or bonus at a works do? Even if they can’t remember having the conversation, the employee undoubtedly will! Are you bound to honour promises made after one too many or at a social event?

Let us refer to the case of Judge v Crown Leisure Limited. This involved an employee who was employed as a Special Operation Manager. Another employee who had transferred from a related company joined in the same role, but he earned a significantly higher salary. The employee has been told by his manager that it was the company’s intention to increase the salary of Operation Managers so their pay would all roughly be in line.

At a work Christmas party, the employee claimed he was promised that he would be put in the same pay scale as the other employee who had transferred within a period of two years. His manager disputed this claim. When this pay increase did not materialise, he resigned and claimed constructive dismissal.

The Employment Tribunal did not accept that the manager hadn’t talked about pay and they didn’t accept the employee’s claim of an express promise that this would occur within a two year time period. They said that there may have been some ‘casual conversation’ and ‘some words of comfort and assurance’. They concluded that the manager did not intend to engage in a legally binding contract, particularly taking note of the environment of the conversation.

On appeal, it was concluded that the promise made at the party did not amount to a ‘contractual promise’ because it was too vague and reiterated previous statements that his salary would be aligned in due course. It was noted that had there been a promise to achieve parity within a specific time frame this ‘might well be sufficiently certain to be capable of enforcement’, however a promise to achieve pay parity ‘eventually’ or in ‘due course’ was too vague and uncertain to constitute a binding contractual promise.

Employers and managers need to remember that:

  • An oral agreement is just as valid as a written contract. However, it is harder to prove what has been agreed.
  • Provided that the person involved has the authority to make those types of decisions, promises can be legally binding.
  • Before social events, it is useful to remind managers that they should avoid talking to staff about pay increases, promotion, bonuses, career prospects or any other similar issues.

Cases turn on their individual facts, therefore to get tailored and specific advice, speak to your Employment Law Adviser who can give you guidance.

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