Mr G Neads v London North Eastern Railway Ltd (T/a ‘LNER’): 1800826/2024
JUDGMENT
The claimant’s claim was brought within the statutory time limits. The respondent’s application to strike out the claim is refused.REASONS
[1]The claim was listed for a public preliminary hearing ‘to determine the time limit issue’, per the orders of EJ Deeley on 23 April 2024 and 20 May 2024. The claimant was employed by the respondent from 26 March 2001 (most recently as a safety and environment analyst) until his retirement on 2 June 2023. The claim is for unauthorised deductions from wages, arising out of a failure to pay an agreed pay award (i.e. pay increase) in respect of the financial year 2022- 2023.[2]The pay award for the financial year April 2022 to March 2023 was agreed between the respondent and unions on 30 November 2023. The backdated pay award was paid to employees in December 2023. The claimant had retired after April 2023 but before November 2023 and did not receive the pay award. The respondent says that the claim is out of time because his final salary was paid in July 2023 and the claim was presented in December 2023. Evidence Case No. 1800826/2024 2Evidence
[3]I was provided with a bundle of documents provided by the respondent, comprising 106 pages. Page references in bold refer to pagination of this document. I also considered written submissions prepared by Ms Jones on behalf of the respondent on 5 July 2024.[4]I heard oral evidence from the claimant, who gave evidence on oath and set out his understanding of the chronology and his entitlement to the pay award.[5]I heard oral submissions from both parties. Chronology and findings of fact[6]This case has been listed for a final hearing on 19 November 2024. Much of the chronology is agreed, and the parties confirmed this at the hearing. I make only such findings of fact as are necessary for me to determine the time limit issue. Most of the areas of dispute will be matters for the final hearing and I leave the substantive issues for determination at that hearing.[7]The claimant has been continuously employed by the respondent since 26 March 2001. He told me that he was previously employed within the payroll department and so was familiar with the respondent’s custom and practice relevant to this claim. A number of unions are recognised by the respondent, including the Transport Salaried Staffs’ Association (TSSA) and the National Union of Rail, Maritime and Transport Workers (RMT). The claimant is a member of the TSSA.[8]At some point the respondent made a pay award offer of 5% or a minimum increase of £1,750 (applied pro-rata for part time workers) for 2022. The claimant confirmed that the ‘2022’ award was for the financial year 2022-23 and this is agreed. This offer was accepted by the TSSA on 28 February 2023 (88). The claimant confirmed in his evidence that he did not claim that the pay award was effective for TSSA members from this date. He accepted, as the respondent says, that the pay award became effective once it was accepted by all recognised unions.[9]The claimant retired on 2 June 2023 and received his final pay on 3 June 2023. This is not disputed. In his oral evidence he told me that he was assured by payroll staff at the time that his entitlement to the pay award would not be affected if he retired before the pay offer was finalised. He told me that this was in line with his experience of the respondent’s custom and practice in previous years, including when he himself worked in the payroll department. He also told me that he had intended to remain in his employment until after the negotiations were finalised, to be on the safe side, but that this reassurance and the influence of his family persuaded him that it was safe to retire in June and ‘enjoy the summer’, without affecting his entitlement to the 2022-23 pay award and subsequent impact on his pension. This may be an issue to be resolved by the Tribunal the final hearing but I note this is the claimant’s evidence, for the purposes of the time limit point. Case No. 1800826/2024 3[10]On 22 November 2023 the claimant became aware that negotiations were in their final stages and requested the relevant pay award from the respondent. This is not disputed.[11]The pay award offer was accepted by all unions (the RMT appearing to be the final union to settle the dispute) on 30 November 2023. A Memorandum of Understanding appears at 77-78.[12]The claimant’s request for the pay award was refused by the respondent on 5 December 2023. This is not disputed.[13]The claimant informed me that he understands that his former colleagues who remained employed by the respondent received their pay award for 2022-23 in December 2023. This is consistent with the letter from Ms Eslamdoust, TSSA General Secretary, to David Horne, Managing Director of LNER on 19 January 2024, which states: ‘Last year in December you and other employers implemented the 2022 pay increase as agreed in our DRA, which our members were grateful finally to receive’ (105). I therefore find that the payment was made to employees still in the employment of the respondent some time in December 2023.[14]The claimant notified ACAS of his intention to claim and commenced early conciliation on 2 January 2024. The EC certificate was issued on 26 January 2024 and his claim was presented on 31 January 2024.[15]The central issue in this case is whether or not the claimant was within the scope of the Memorandum of Understanding. The Memorandum of Understanding is silent on the point. The claimant’s evidence to me was that based on custom and practice, the understanding of employees and unions at the time the agreement was reached, and the reassurances of the respondent given at the time of his retirement, he would be. Mr Lynch of the RMT wrote to the respondent’s representative in the negotiations (Steve Montgomery, chair of the Rail Delivery Group) on 1 December 2023 to request clarification of the position of union members who left employment (including retirees) during the pay period (99). I have seen a letter dated 12 December 2023 from Mr Montgomery in response stating that leavers would not be eligible, unless they were ‘good leavers’ (which I would expect a retiree would be) (101). Ms Jones told me her instructions were that this letter was never sent but there is no evidence before me today on that point. There is another letter from Mr Montgomery in the bundle dated 13 December 2023 which states that any leavers during the 2022-23 pay review period will not be eligible, i.e. employees would not be eligible unless they remain employed on 30 November 2023 (102).[16]There is therefore a conflict of views regarding the construction of the contract, which a Tribunal will have to resolve if the matter proceeds to final hearing.Relevant Law
[17]Section 13 Employment Rights Act 1996 (so far as relevant) provides (emphasis added): Case No. 1800826/2024 4 ‘(1)An employer shall not make a deduction from wages of a worker employed by him unless— (a)the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or (b)the worker has previously signified in writing his agreement or consent to the making of the deduction. (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.’[18]Section 23(2) Employment Rights Act 1996 provides (so far as relevant): ‘Subject to subsection (4), an employment tribunal shall not consider a complaint under this section [i.e. for unauthorised deductions from wages] unless it is presented before the end of the period of three months beginning with— (a)in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or (b)in the case of a complaint relating to a payment received by the employer, the date when the payment was received.’[19]In Delaney v Staples [1991] IRLR 112 the Court of Appeal confirmed that a complete failure to pay wages would qualify as a deduction for the purposes of what is now s.13(3) ERA 1996.[20]The respondent submits that the claim is out of time, because the last payment of wages was on 3 June 2023, and this is the relevant date for the purposes of ss.13 and 23. I disagree. Case No. 1800826/2024 5[21]I am satisfied that the relevant deduction under s.13(3) was a complete failure to pay the claimant, which arose either when his request was refused on 5 December 2023, or when his former colleagues were paid at some point in December 2023. This is the point at which the claimant’s entitlement to receive the pay award would have arisen, if he was in scope (which is an issue for final hearing).[22]The decision in Delaney v Staples does not address the time limit point, but it must be the case that if a complete failure to pay can be a deduction for the purposes of s.13(3), it can also be ‘the date of payment of the wages from which the deduction was made’ for the purposes of s.23(2). If not, then this would negate the entitlement to bring a claim for a complete failure to pay wages, as the time limit would not run from the date of the complete failure to pay.[23]In short, if there was an unauthorised deduction from wages, it was made in December 2023. The claim was presented on 31 January 2023 which is within three months.[24]I am not aware of any general principle that the claimant would be debarred from bringing a claim for a payment which fell due after the date of termination of his employment. The Tribunal regularly hears claims for deductions of final pay, which are made after employment is terminated. In fact, the respondent’s own position on this case is that the relevant payment was made on 3 June 2023, the day after his employment terminated.[25]If I am wrong and the date of the alleged deduction is 3 June 2023, then alternatively I would be quite satisfied that it was not reasonably practicable for the claimant to bring the claim within three months of his final payment in June 2023, because there was no finalised union agreement to the pay award at that point in time and so he could not have known what the pay award would be i.e. he could not have known what he would be claiming for. The claim was brought within a reasonable further period of time. He commenced the ACAS process on 2 January 2024 which is a reasonable period of time after the refusal of his pay request on 5 December 2023 (particularly if the Christmas period is allowed for), and shortly after his colleagues received their pay presumably at the end of December 2023. The claim was presented within five days of the EC certificate which is reasonable.[26]I find that the claimant’s claim was brought within the statutory time limits and the respondent’s application to strike out the claim is refused.[27]At the hearing, the remaining issues were identified and case management orders were made.