Gross misconduct is no barrier to pay in lieu of notice, notes Anna Macey
In Cavenagh v William Evans Limited [2012] EWCA Civ 697 Duncan Cavenagh was the managing director of William Evans Limited. Exercising a clause in Cavenagh’s contract, the company summarily terminated his employment, acknowledging their contractual obligation to pay Cavanagh six months’ pay in lieu of notice (PILON).
Before the £65,000 due was paid, the company became aware that two months before the termination, Cavenagh had authorised a transfer of £10,000 from company funds to his pension provider. The company refused to pay the PILON, and Cavenagh sued for the payment as a debt due under his contract.
Boston Deep Sea Fishing
Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339, as the Court of Appeal acknowledged, is a leading authority for many of the principles governing dismissal for gross misconduct. It established that an employee may be dismissed summarily for gross misconduct, and critically that an employer can defend a claim
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