The First Tier Tribunal has held that a payment to a retired employee to buy-out his right to participate in his former employer’s healthcare scheme did not qualify as either a payment for termination of employment (which would qualify for a £30,000 income tax exemption) or a capital gain. The payment was deemed to be a payment under an employer funded retirement benefit scheme and therefore was subject to income tax and national insurance contributions as employment income.

The employment tribunal has held that an employee was not liable for PAYE under-deductions because their employer had not taken reasonable care in complying with the PAYE Regulations. Instead the employer had delegated the matter to a payroll agent without liaising with them or making enquiries of them.

The High Court has held that the calculation of a bonus pool by an employer bank involved an exercise of discretion and therefore the bank was under a duty, by virtue of an implied contractual term, to exercise its discretion honestly and in good faith and not arbitrarily, capriciously or irrationally.

The Employment Appeal Tribunal held that Sheffield City Council was bound by the rates of pay erroneously set out in a letter from an HR consultant to its employees. It was held that the letter was binding on the employer because the HR consultant was held out as being authorised to make this communication.