Le Boustouler v Jersey Deep Freeze Ltd

The case

Mr Le Boustouler worked as an engineer for Jersey Deep Freeze for 17 years. He was one of seven employees who worked within the business, although the other six employees were also shareholders of the company. As shareholders, those other individuals received dividends in addition to the standard salary.

In May 2023, Mr Le Boustouler resigned and claimed constructive unfair dismissal to the Tribunal.

In the days leading up to his resignation, Mr Le Boustouler had overheard two shareholders talking about a dividend payment. In response, Mr Le Boustouler requested a meeting with managers as he wanted to discuss becoming a shareholder and was aggrieved that he had not been offered shares in the company. To make up for this, he proposed that he should receive additional holiday, extra unpaid leave, a pay increase and a decent bonus.

There is conflicting evidence about what was discussed at the meeting, but Mr Le Boustouler ultimately left the meeting as, in his opinion, “it wasn’t going anywhere”. However, it was alleged that during the meeting, one of the managers had suggested that Mr Le Boustouler had “not been capable, not qualified to do” the job.

Mr Le Boustouler explained that he felt worthless after the meeting. He resigned the following day, saying that he couldn’t work somewhere where he was not appreciated.

The Tribunal considered the claim but rejected Mr Le Boustouler’s claim that the disparity in pay, bonus and holiday between himself and the employee shareholders was unfair or a fundamental breach of the implied term of trust and confidence. Concerning the holidays, the Tribunal explained that, unlike Mr Le Boustouler, the employee shareholders must be on call. This was partly why they had additional holidays – to compensate for their on-call obligations. The Tribunal did not determine that this was unfair.

In conclusion, the Tribunal summarised that Mr Le Boustouler had felt that his 17 years at the company had warranted him getting a bigger slice of the pie than he was currently contractually entitled to. His employer disagreed with this analysis, and the Tribunal determined that this was not a basis for resigning and claiming constructive unfair dismissal.

The claim, therefore, failed, and the case was dismissed.

LAW analysis

This is a positive case for employers – the fact that employees have different terms and conditions can be for many reasons. It is not inherently wrong, particularly not in the case of remuneration packages for employees vs employee shareholders. Employers in Guernsey, however, need to be mindful of equal pay obligations.

That being said, employers should be aware of significant differences in terms and conditions between employees who undertake the same or similar work. Employers usually expect remuneration packages to be kept confidential, but this does not occasionally stop employees from being a little loose-lipped.

At best, this can sew the seeds of distrust and discontent within the workforce (which, over time, tends to snowball and become a more significant issue) or at worst, the difference in terms and conditions could be alleged to be linked to someone’s protected characteristic under the discrimination legislation – such as their sex, age or disability.

A discrimination claim is a situation all employers would wish to avoid at all costs, so it is sensible to keep an eye on terms and conditions and act if you begin to see gaps appearing that you could not reasonably explain to an enquiring Tribunal!

February 2024 – Jersey

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