Rigby v Ferodo Ltd
Encyclopedia
Rigby v Ferodo Ltd [1988] ICR 29 is a UK labour law case concerning the contract of employment. It held that if an employer reduces wages without a worker's consent, the worker may continue to work and claim the shortfall.
Ltd cut wages by 5% to stay afloat. The trade union agreed not to strike. Mr Rigby, who worked as a lathe
operator on £129 a week with a contract terminable on 12 weeks’ notice, made it known he did not accept the wage reduction. For him this was approximately £30 a week. He continued to work and after over a year, he claimed for shortfall.
The judge held there was a unilateral variation of the contract, which amounted to a breach, and so Mr Rigby was entitled to damages. The Court of Appeal agreed. Ferodo Ltd appealed to the House of Lords.
Facts
FerodoFerodo
Ferodo is a British brake company based in the High Peak of Derbyshire.-History:It was founded in 1897 by Herbert Froode in Chapel en le Frith, Derbyshire...
Ltd cut wages by 5% to stay afloat. The trade union agreed not to strike. Mr Rigby, who worked as a lathe
Lathe
A lathe is a machine tool which rotates the workpiece on its axis to perform various operations such as cutting, sanding, knurling, drilling, or deformation with tools that are applied to the workpiece to create an object which has symmetry about an axis of rotation.Lathes are used in woodturning,...
operator on £129 a week with a contract terminable on 12 weeks’ notice, made it known he did not accept the wage reduction. For him this was approximately £30 a week. He continued to work and after over a year, he claimed for shortfall.
The judge held there was a unilateral variation of the contract, which amounted to a breach, and so Mr Rigby was entitled to damages. The Court of Appeal agreed. Ferodo Ltd appealed to the House of Lords.
Judgment
The House of Lords held that there had been a repudiatory breach of contract by the employer and so Mr Rigby was entitled to claim his shortfall in wages. If the employee continued to work, this did not necessarily imply he accepted the change, nor was it the case that the contract was automatically brought to an end. Moreover because Ferodo Ltd had not in fact terminated the contract the damages that Mr Rigby received could be beyond the 12 week notice period in which the contract could legitimately have been terminated, and a notice of unilateral variation could not be implicitly construed as giving notice of termination.See also
- UK labour law
- Employment contract in English lawEmployment contract in English lawAn employment contract in English law is a specific kind of contract whereby one person performs work under the direction of another. The two main features of a contract is that work is exchanged for a wage, and that one party stands in a relationship of relative dependence, or inequality of...
- Autoclenz Ltd v BelcherAutoclenz Ltd v BelcherAutoclenz Ltd v Belcher [2011] is a significant UK labour law case decided by the Supreme Court of the United Kingdom, concerning the scope of statutory protection of rights for working individuals...
[2011] UKSC 41