Cavenagh v William Evans Ltd

Cavenagh v William Evans Ltd

An employer who elects to terminate an employment contract under an express clause providing for payment in lieu of notice creates an accrued debt to the employee, which cannot be defeated by after-discovered misconduct; the Boston Deep Sea Fishing principle does not apply to debt claims arising from contractual termination, only to damages claims for wrongful dismissal.

Parties
Appellant: Duncan Cavenagh; Respondent: William Evans Limited
Jurisdiction
England and Wales
Judgment Date
24 May 2012
Procedural Posture
Civil Appeal / Judgment on Appeal
Outcome
appeal allowed
Legal Topics
Termination of Employment, Payment in Lieu of Notice, Repudiatory Breach, After Acquired Evidence, Fiduciary Duties
Employment Law Contract Law Termination of Employment Payment in Lieu of Notice Repudiatory Breach After Acquired Evidence Fiduciary Duties

Case Brief

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Parties

Duncan Cavenagh

Appellant

William Evans Limited

Respondent

Procedural Posture

Civil Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether after-discovered gross misconduct by an employee allows an employer to avoid liability for payment in lieu of notice under a contractual termination clause
  2. 2 Whether the principles in Boston Deep Sea Fishing apply to debt claims for payment in lieu of notice

Ratio Decidendi

An employer who elects to terminate an employment contract under an express clause providing for payment in lieu of notice creates an accrued debt to the employee, which cannot be defeated by after-discovered misconduct; the Boston Deep Sea Fishing principle does not apply to debt claims arising from contractual termination, only to damages claims for wrongful dismissal.

Court Disposition

appeal allowed

Orders

  • Judgment for Mr Cavenagh for six months' pay in lieu of notice under the service agreement
  • Company's counterclaim limited to recovery of £10,000, which Mr Cavenagh accepted liability for and agreed to repay