JLT Speciality v. Craven [2018] EWCA Civ 2487 deals with a bonus advance, and whether or not the employee was required to repay it against the background of some ambiguity in the drafting of the bonus provisions.
Background
C was hired by JLT and following a subsequent variation to his contract his notice clause was expressed as follows:
“…. continue until terminated by either party giving to the other 52 weeks written notice of its/his wish to terminate this Agreement, provided that any such notice given by the Executive shall not expire before 31 December 2016.”
C received a Bonus Advance of £500,000 but with a proviso that it had to be repaid if C resigned on or before 31 December 2016.
On 23 September 2015 C gave notice of his resignation.
On 29 September 2015 JLT replied accepting C’s resignation and confirming that his final date of employment would be 1 January 2017.
Thereafter, JLT sent C a further letter confirming that C’s final date of employment would be 31 December 2016.
Court of Appeal
In Court C contended that due to JLT’s letter saying his last day of employment was 1 January 2017 this amounted to a variation of his contract. This was important because on C’s case if this was his last day then, by reference to the repayment Bonus Advance repayment provision (see above), he believed he was home and dry regarding the Bonus - albeit just.
The Court rejected this argument saying that JLT’s letter was not an offer; it was not an expression of willingness to contract on specified terms. Further, C had not accepted that offer by continuing to work under his contract. The Court concluded by saying that the parties' conduct was explicable by their existing rights and obligations.
As a result, the Court found that the Bonus Advance was repayable due to the fact that C’s employment ended on 31 December 2017.
Comment
There is the obvious ambiguity in that the expression “resign” could either mean the act of tendering one’s resignation on or before 31 December 2016, alternatively, the employment actually ending on or before this date.
Even if it was the latter it didn’t help C. The Court referred to the drafting creating a “cliff edge”, and that there would inevitably come a point at which the whole of the Bonus Advance fell to be returned one day, and none of it the next. C’s counsel said the dividing line was the night of 30-31 December whilst JLT’s counsel argued it meant the next night. The Court preferred JLT’s approach.
Fine margins indeed. |
