Mr M Blackburn v Petrofac Facilities Management Ltd: 1601425/2019
EMPLOYMENT TRIBUNALS
Case No 1601425/2019
Between
Mr M BlackburnClaimantPetrofac Facilities Management LimitedRespondentDate 27 January 2020
JUDGMENT
[1]The claim in respect of holiday pay is dismissed upon withdrawal by the claimant. All other claims proceed to hearing on 7 January 2020[3]The judgment of the tribunal is that the claimant’s claim that the respondent unlawfully deducted the claimant’s wages pursuant to section 13 of the Employment Rights Act 1996 is not well founded and is dismissed.
REASONS
[1]The claimant represented himself and the respondent was represented by Mr Jones a solicitor. The claimant claims that the respondent failed to pay him correct wages following his resignation. The wages he claims is backdated pay, this was a rise in pay negotiated between his employer and a recognised Union. The pay rise was finalised after the end of the claimant’s employment but related to the period when he was employed. The respondent contends that there was no contract between the respondent and the claimant in existence at the time of its agreement with the union. It further argues that there was no term which incorporated the agreement with the union into the claimant’s contract of employment.[2]The parties provided an agreed list of issues for me to resolve. The claim was brought pursuant to section 13 of the Employment Rights Act 1996 and pursuant to the Extension of Jurisdiction order 1994. I was also provided with a bundle of documents of 104 pages. The claimant gave oral evidence; the respondent called two witnesses to give oral evidence Mr Graham Wilderspin who was operations manager at the site where the claimant worked and Ms Kathryn Popplewell who was a HR professional working for the respondent.[3]At the outset of the hearing I raised a further issue with the parties that the contract of employment, on its face, appeared to agree that the governing law would be the law of Scotland. I asked the parties to make submissions on whether the tribunal had jurisdiction to deal with its terms under the Extension of Jurisdiction Order.
THE FACTS
[4]There was little in the way of disputed fact in this case. The respondent is an organisation which operates the Point of Ayr gas installation for a client company. The claimant was engaged as a production technician. The claimant commenced employment on 30 January 2017, he tendered his resignation at the end of December 2018 and his employment terminated on 31 January 2019.[5]The respondent has a recognition agreement with the Unite trade union. That agreement allows for collective bargaining between Unite and the respondent. There is a complicating factor in the arrangements because under the terms of the client’s contract with the respondent, the client must agree to any change in terms and conditions of the respondent’s employees. The agreement between the respondent and Unite specifically sets out that any agreement between them is not contractual but binds in honour only.[6]The claimant’s terms and conditions are set out in a document which, although headed “statement of particulars of employment” begins with a phrase in the opening clause “this contract of employment”. Three specific clauses are of relevance: Clause 26 provides: “There are no collective agreements incorporated into your contract of employment or otherwise affecting your employment with the company” Clause 28 provides: “This contract of employment constitutes the whole agreement between the parties” Clause 29 Provides under the heading Governing Law: “This contract of employment shall be governed by and construed in accordance with the Laws of Scotland and the parties irrevocably submit to the exclusive jurisdiction of the Courts of Scotland”[7]In 2018 Unite made a pay claim to the respondent on behalf of its members. There were protracted negotiations between Unite and the respondent with, on occasions, the spectre of strike action being raised. By January 2019 an offer had been put forward by the respondent which would increase pay backdated to April 2018 and which, would pay a sum of £1,500 in settlement of holiday pay, to each employee. The latter part of the agreement was contingent on employees agreeing to sign a waiver which indicated they would not bring legal claims on that issue (albeit I have not seen evidence that this part of the agreement complies with section 203 Employment Rights Act 1996). This offer was eventually accepted by Unite on 5 March 2019.[8]During the process of discussion on the terms of the offer, on 29 January 2019, the claimant attended a presentation meeting. Mr Wilderspin was at this meeting and gave details about the terms of the offer. During this meeting the claimant asked the question as to whether he (as his employment was coming to an end) would be paid the backpay and the £1,500. There is a dispute as to what precisely was said by Mr Wilderspin in response to the claimant’s question. However, this much is common ground Mr Wilderspin did not say that the claimant would be paid these sums but did say that he would explore whether the claimant could be paid.[9]The claimant kept in contact with the respondent after the termination of his employment. He was made aware at some point during March that the agreement had been reached and by late March early April that his former colleagues had been paid. However, the claimant was not specifically told by the respondent that it did not intend to pay him until a telephone conversation with Ms Popplewell on 8 May 2019.[10]The claimant approached ACAS to commence early conciliation on 17 July 2019 and conciliation was concluded on 13 August 2019. The claimant presented his claim to tribunal on the following day.
THE LAW
[11]Section 13 of the Employment Rights Act 1996 which, so far as is relevant, provides:(1) An employer shall not make a deduction from wages of a worker employed by him unless— (a) the deduction is ---- authorised to be made by virtue of ------ a relevant provision of the worker’s contract, or(2) In this section “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised— (a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or (b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.[12]Section 27 of the Employment Rights Act 1996 which, so far as is relevant, provides: (1) In this Part “wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including— (a)any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,[13]The respondent referred me to New Century Cleaning Co v Church [2000] IRLR 27. In that case the Court of Appeal held that wages were payments to which the employee had a legal entitlement (albeit not necessarily a contractual entitlement). Sedley LJ expressed the position as follows: Parliament has not limited wages to what can be contractually ascertained. Defining them so as to embrace all that is "properly payable" aims by looking beyond the lawyer's contract to the industrial reality to avoid some of the niceties of legal analysis which would otherwise arise. The exemptions set out in section 13(1)(a) and (b) make it clear that only prior agreement to a deduction (or statutory authority) waives the rule: Parliament’s purpose, in other words, is precisely to prevent unilateral reductions in established rates of pay. The industrial reality, as Mr. Underhill has confirmed, was that a recurrent job carried a recurrent price. Morritt LJ whilst agreeing put it in this way: The word “payable” clearly connotes some legal entitlement. The adverb “properly” is also consistent with a legal requirement but is not necessarily limited to a contractual entitlement. This is confirmed by the provisions of s.27(1)(a) which show that the wages “properly payable” may not be due under the contract of employment. But the words “or otherwise” do not, in my view, extend the ambit of “the sums payable to the worker in connection with his employment” beyond those to which he has some legal entitlement. With the exception of the “bonus” referred to in s.27(1)(a) all the sub-paragraphs of that subsection refer to sums to which the employee has some legal entitlement. However, Beldam LJ puts it somewhat differently: For wages to be “properly payable” by an employer he must be rendered liable to pay either under the contract of employment or in some other way. Section 27 contains some examples of sums which may be payable either under contract or because for some other reason the employer is liable to make payment as an addition or supplement to “wages”. An example of a sum properly payable otherwise than under contract would be a minimum wage payable by order of a wages council. Nor is it difficult to see how a fee, bonus, commission, holiday pay or other emolument referable to employment may be payable otherwise than under the contract of employment. Such payments may be customary or required by collective agreements without express provision being made in a contract of employment. On that basis it appears to me that what I am required to consider is two things: firstly, does the payment necessarily connect with the claimant’s employment; secondly, does an entitlement, because of a contractual term, custom or general arrangement, arise because of that connection so as to be properly payable otherwise. Mr Jones submitted a it must be a legal entitlement arising from statute or contract, I do not consider the decision to be that narrow.[14]The respondent also referred me to Delaney v Staples [1992] 1 AC 687. This is a decision of the House of Lords. The judgment makes it clear that wages are payment for rendering services during employment. Lord Browne-Wilkinson makes the point that the wording of the then sections, which are now reproduced in great part in Sections 13 and 27 above, refers to payment for services done. The House of Lords decided that a payment in lieu of notice was about the termination of the employment and not a payment for services undertaken by the employee. I consider the importance of that decision is that it limits wages, even in the broad form described at paragraph 13 above, to payments which are for service undertaken by the employee.[15]Article 3 of the Employment Tribunal’s (Extension of Jurisdiction)(England & Wales) Order 1994 provides: Proceedings may be brought before an industrial tribunal in respect of a claim of an employee for the recovery of damages or any other sum (other than a claim for damages, or for a sum due, in respect of personal injuries) if— (a) the claim is one ------- which a court in England and Wales would under the law for the time being in force have jurisdiction to hear and determine;
Analysis
[16]I agree with the claimant that there is a moral argument that he should be paid. The claimant provided services as an employee during the negotiation period. The only difference between the claimant and those that received the payment was that he left his employment. However, the employment tribunal is a court and as such this is a court of justice and laws and not a court of morals. Justice requires that the law is applied equally to all. I am therefore, bound to apply the law and not my own moral sense in respect of case.[17]The claimant’s first difficulty is that which relates to the breach of contract claim. The Extension of Jurisdiction Order gives power to the tribunal to adjudicate upon matters to the extent that the County Court has such power. The County Court has no jurisdiction in Scotland. Parties are free to contract under the law and jurisdiction they choose (save for statutory duties which cannot be contracted out of). The contract indicates that the Law of Scotland applies to its terms and also that its terms express the entirety of the contract between the parties. The County Court would not have jurisdiction to adjudicate on the contract and therefore, by extension, this tribunal lacks that jurisdiction. Mr Jones asked me nonetheless to make findings, I will not, I am not an expert in the law of contract in Scotland and therefore could not make any useful findings.[18]The second difficulty for the claimant is that once his notice came to an end so did any contractual relationship with the respondent. There are well known contractual duties which survive the end of an employment contract e.g. it is generally accepted that there is an implied term to provide a reference if requested. However, I know of no generally implied term that a backdated change in pay would be payable after the end of a contract and the claimant has not tried to draw one to my attention. There is express term specifically against incorporating the collective agreement. There is no express term which would make backdated pay payable after termination. Can a term be implied? The contract itself appears to rule that out with its “whole agreement” clause. Even if that were not the case the claimant cannot point to a means of implying the term he relies on. I have been taken to no evidence of a reasonable, notorious and certain practice of paying backdated pay to former employees and so there is no means of implying a term on that basis. Further, I cannot say that an officious but reasonable third-party observer on saying to the parties “but will the employee be paid backpay if he leaves?” would be met by a testy “but of course” from both parties, such a term is not blatantly obvious. Indeed, the conversation between the claimant and Mr Wilderspin points the opposite way because it was equivocal. On that basis I conclude that nothing is properly payable to the claimant under the terms of the contract.[19]Was the backpay otherwise properly payable. The claimant has essentially argued that the respondent led him to believe that he would receive the back pay. On the evidence I accept that the claimant held that belief sincerely. However, that belief was held with an undue sense of optimism given what Mr Wilderspin had told the claimant. There was no promise that the claimant would be paid. The claimant could have argued that the sums were properly payable because it was payment for service which he had already provided. However, had that argument been advanced I would have rejected it because at the time of negotiation there was no certainty that any pay-rise would happen. The reality is that the employees who continued were paid backpay for their continuing service and their agreement to work for the newly agreed figure. I cannot on that basis say that these were sums connected to the claimant’s employment which were properly payable to the claimant.[20]The claimant abandoned a holiday pay claim. The £1500 paid to employees was a settlement figure. That was a specific agreement for the respondent to pay a particular sum of money for an agreement (whether enforceable or not) not to pursue proceedings in respect of holiday pay. It was an agreement between the respondent and each individual employee who signed an agreement letter. That cannot be a sum connected with the claimant’s employment, he signed no such document with the respondent and came to no such terms.