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Nicola Brown, Partner at law firm Mills & Reeve LLP writes a reminder about employee loans on their employment law blog  following a Privy Council ruling that “reminds [employers] to think carefully about the repayment terms attached to employee loans.

The dispute was about whether an employee was obliged to repay a very substantial loan after he had volunteered for redundancy.”

“…. trouble could have been avoided if the Company had applied its mind to the full range of circumstances in which the employment might be ended, when agreeing the terms of the loan. It is common for detailed “good leaver” and “bad leaver” provisions to be included in share option schemes and the like. Where a loan is advanced for a significant amount of money, there is an argument for including equivalent leaver provisions to avoid uncertainty.  Certainly employers should not assume that they can get their money back if the employment is ended while a loan is still repayable, unless the employee is clearly at fault.”

 

You are encouraged to read the full post entitled “Implied “no sacking” term may attach to repayment of employee loans” here or Mills & Reeve blog: http://www.hrlawlive.co.uk/

About the Author

The Author, Nicola Brown is described as enjoying “a reputation in the higher education sector for her ‘ability to talk in plain English and her efficiency’.”

I am grateful for Mills & Reeve LLP for publishing the blog “Implied “no sacking” term may attach to repayment of employee loans.”

Note

This was a Privy Council judgement.  The Privy Council is often overlooked and yet remains a court with significant impact on the common law as well as both international and UK Employment law.

I am grateful for Mills & Reeve LLP for publishing the blog “Implied “no sacking” term may attach to repayment of employee loans.”

Reference

CaseAli v Petroleum Company of Trinidad and Tobago (Trinidad and Tobago) [2017] UKPC 2 (13 February 2017) (access to the judgement is free).

Citation: [2017] WLR(D) 110, [2017] UKPC 2

 

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