Reda, Abdul-Jalil v Flag Limited: PC 11 Jul 2002

PC (Bermuda) The courts should be reluctant to accept a fetter on the employer’s right to dismiss on notice where there is an express term in the contract empowering the employer to do so.
Lord Millet considered the contention that the employer was duty bound to preserve the relationship of trust and confidence: ‘which ought to subsist between an employer and his employee and not to destroy that relationship by discriminating arbitrarily between its employees by granting some of them valuable financial entitlements and dismissing others in order to avoid having to do so.’
Considering the case of Aspden, Lord Millet said: ‘In Aspden v Webbs Poultry and Meat Group (Holding) Ltd the employer introduced a generous permanent health insurance scheme for directors and senior managers, including the complainant. After its introduction the complainant, who up to that point had no written contract of employment, entered into a written contract. Unfortunately the form used was one which had previously been used before the scheme was introduced, and it was mistakenly adopted without modification. The contract contained a specific power enabling the employer in the event of prolonged illness to dismiss an employee who was unfit for work and a general provision entitling either party to bring the contract to an end on three months’ notice. Sedley J was satisfied on the evidence that it was not the employer’s intention to exercise its contractual right of dismissal in circumstances where to do so would frustrate the employee’s entitlement to income replacement insurance. The question was whether it was an implied term of the contract that it should not do so.’


Lord Nicholls of Birkenhead, Lord Mackay of Clashfern, Lord Hope of Craighead, Lord Hutton, Lord Millett


[2002] IRLR 747, [2002] UKPC 38


Bailii, PC




CitedImperial Group Pension Trust Ltd v Imperial Tobacco Ltd 1991
A company pension scheme had been operating for many years, with increases being provided for under one rule. A new rule was introduced to provide regular increases. The company was taken over, and the trustees sought clarification of the company’s . .
CitedMalik v Bank of Credit and Commerce International (BCCI); Mahmud v Bank of Credit and Commerce International HL 12-Jun-1997
Allowance of Stigma Damages
The employees claimed damages, saying that the way in which their employer had behaved during their employment had led to continuing losses, ‘stigma damages’ after the termination.
Held: It is an implied term of any contract of employment that . .
CitedJohnson v Unisys Ltd HL 23-Mar-2001
The claimant contended for a common law remedy covering the same ground as the statutory right available to him under the Employment Rights Act 1996 through the Employment Tribunal system.
Held: The statutory system for compensation for unfair . .
CitedNelson v British Broadcasting Corporation CA 1977
Mr Nelson was employed as a producer but had in fact been engaged in the Caribbean Service of the BBC in terms of the work which he had actually been doing. The contract of employment expressly provided that he should serve wherever and however he . .
CitedBG Plc v P O’Brien EAT 22-Feb-2001
EAT Contract of Employment – Breach of Contract
The employee complained that he had not been offered a revised contract of employment with enhanced redundancy terms, with the result that he did not receive . .
CitedLefebvre v HOJ Industries Ltd 1992
All contracts of employment are, as a matter of law, subject to an implied term that they are terminable on reasonable notice, and such a term can be displaced only by clear words. . .
CitedAspden v Webbs Poultry and Meat Group (Holdings) Limited QBD 1996
The employer had provided a permanent health scheme for directors and senior managers, which included the complainant. After its introduction the complainant, who up to that point had no written contract of employment, entered into a written . .

Cited by:

CitedKaur v MG Rover Group Ltd CA 17-Nov-2004
The applicant was employed by the respondent who had a collective agreement with a trade union.
Held: Not all elements of the collective agreement need be intended to be legally enforceable. She complained that the collective agreement would . .
CitedLloyd v BCQ Ltd EAT 12-Nov-2012
EAT Contract of Employment : Damages for Breach of Contract – The Claimant was dismissed because of ill health. He claimed that he was entitled to (a) a golden handshake; (b) money under personal health . .
Lists of cited by and citing cases may be incomplete.


Updated: 06 June 2022; Ref: scu.175093