In this podcast, legal expert Katherine Taunton discusses the case of Lycatel v Schneider and the challenges of determining the preferred forum for a client's case. The limitations of litigating high-value contract claims in the ET are explored, along with the advantages and disadvantages of the High Court versus the Employment Tribunal. Strategic considerations for employees in employment tribunal claims are also highlighted.
In cases involving unlawful deductions, employers can argue that discretionary bonuses are not quantifiable and therefore not subject to claims.
The Likodell Services and Schneider case highlights the factors considered by the Employment Appeal Tribunal when determining the appropriate forum to hear a complex breach of contract case.
Deep dives
Issue in Likodell Services and Schneider case
The Likodell Services and Schneider case involved an £8 million bonus dispute. The claimant, an investment analyst, alleged that Likodell had agreed to a bonus arrangement that differed from his written contract. The case centered around the legal effect of a conversation between the claimant and the chairman regarding the bonus.
The test for unlawful deduction of wages and the relevance of quantifiable sums
Section 13 of the Employment Rights Act, 1996, prohibits unlawful deductions from workers' wages. The test for unlawful deductions is whether the total amount of wages paid is less than the total amount properly payable. In dispute cases like this, the quantifiability of the sum can be a factor. Employers can argue that if the bonus depends on their discretion, it is not quantifiable and therefore not subject to an unlawful deductions claim.
Factors influencing the decision to stay the claim in the High Court
The Employment Appeal Tribunal (EAT) determined that the High Court was the more appropriate forum to hear the case because of the factual and legal complexity involved. Factors contributing to this decision included the High Court's expertise in breach of contract matters, the formality of proceedings and sharply defined issues, and Likodell's willingness to apply the Employment Tribunal's cost principles in the High Court proceedings. The value of the claim and potential delays in both courts were also considered. This case provides guidance for employers seeking stays and employees navigating claims to ensure clarity and simplicity in their pleadings.
Katherine Taunton talks to Michael White about Lycatel Services Ltd v Schneider [2023] EAT 81.How do you persuade a judge that your client’s case should be heard first in their preferred forum, whether that’s the ET or the High Court?