Ms C McMahon v AXA PPP Health Care and others: 4104661/2013 and 4104662/2013

EMPLOYMENT TRIBUNALS (SCOTLAND)

Case No 4104661/2013, 4104662/2013

Venue Glasgow

Hearing 17, 19 and 21 January 2022

Between

Ms C McMahonClaimant

AXA PPP Health Care and othersRespondent

Before

Employment Judge Susan Walker

Mr Woolfson, solicitor for claimant

Ms Skeoch, solicitor for respondent

Date 11 November 2022

JUDGMENT

[1]The manner in which the proceedings have been conducted by the claimant has not been unreasonable. The application under rule 37(1)(b) is refused in respect of both claims.

[2]It is no longer possible to have a fair hearing of case 4104662/13 and case 4104662/13 is struck out under rule 37(1) (e) .

[3]It is no longer possible to have a fair hearing against the First and Second Respondents and case 4104661/13 is struck out against the First and Second Respondent under rule 37(1) (e ).

[4]Case 4104661/13 is not struck out against the Third Respondent. The application under rule 37(1)( e) is refused in this respect .

REASONS

Law

[1]This was a hearing to consider the respondents’ application to have both claims struck out under rule 37(1) (e ) (that it is no longer possible to have a fair hearing) and/or rule 37(1)(b) (that the manner in which the proceedings have been conducted by or on behalf of the claimant has been unreasonable).

[2]Although no determination has yet been made by the Tribunal in relation to whether the claimant was disabled at the relevant time for the purposes of the Equality Act, various adjustments were made at her request and without objection from the respondents.

Factual background

[3]It was agreed at a previous case management hearing that the hearing to determine the strike out application would be on non-consecutive afternoons. It was also agreed that the claimant would give evidence in chief by way of a witness statement to be taken as read.

[4]On 14 January 2022, the claimant’s representative emailed the Tribunal to request some additional adjustments, including the provision of a private space to which the claimant could retire privately if she became upset or distressed. It was confirmed by the Tribunal that the additional adjustments would be made.

The law

[5]It is understood that the claimant was content with the adjustments that were made by the Tribunal.

[6]Having adopted her witness statement, the claimant was cross-examined on the 17 January 2022. No witnesses were called by the respondent . A joint set of productions was provided for the Tribunal and any case numbers refer to that set. The respondent also provided a chronology which, although not agreed by the claimant, assisted the Tribunal. The Tribunal also had access to correspondence in its own case file.

[7]Ms Skeoch provided written submissions for the respondents and supplemented these orally on 19 January 2022. Mr Woolfson provided written submissions for the claimant and supplemented these orally on 21 January 2022. Ms Skeoch was given an opportunity to reply. Both sides referred to relevant authorities. Findings in fact

[8]The following facts are agreed or found to be true:

Background

[9]The claimant has presented a number of claims to the Tribunal. For the purpose of this application it is necessary to refer to case numbers 111650/2010 (“Claim 1”); 4104661/2013 ( “claim 2”) and 4104662/2013 (“claim 3”).

[10]Claim 1 is a claim of discrimination on grounds of a protected belief and victimisation; claim 2 is a claim of unauthorised deductions from wages and claim 3 is a claim of discrimination on alternative grounds of protected belief and disability .

[11]In 2012, the claimant had complained about Judge Gall. Her complaint was referred to the President of Employment Tribunals (Scotland), Judge Simon. At that time, it was 2 years since Claim 1 had been presented to the Tribunal (and before claims 2 and 3 had been presented.) In her reply to the claimant, dismissing the complaint, Judge Simon drew her attention to the terms of the overriding objective in the then applicable Rules of Procedure and, in particular, the need to ensure that a case is dealt with “expeditiously and fairly”. Judge Simon said “Case law supports the proposition that if a very lengthy time passes between the events giving rise to a claim and the hearing of that claim ( whatever the reason for the delay) then it may be necessary for a judicial decision to be taken as to whether it is possible for there to be a fair hearing of the case, in light of the passage of time. This is a matter upon which you may wish to take legal advice.” Respondent’s first strike out application and the decision of Judge Gall

[12]In August 2015, the respondents applied for all the claims to be struck out either on the ground that the claim had no reasonable prospect of success or on the ground that the manner in which the proceedings was conducted by the claimant had been unreasonable or on the ground that a fair hearing was not possible. In the alternative, a deposit order was requested.

[13]The applications were considered by Employment Judge Gall at a Preliminary Hearing which took place in November 2015 and January 2016,

[14]Judge Gall issued his judgment on 1 March 2016. He decided that the claim of discrimination on the protected characteristic of belief in claim 1 and claim 3 should be struck out as having no reasonable prospect of success. However, he concluded the remaining claims should not be struck out on this ground as, in summary, there were factual disputes still to be determined.

[15]He also decided that claim 1 should be struck out in its entirety on the alternative ground that the manner in which claim 1 had been conducted by the claimant had been unreasonable. As part of that consideration, he concluded that “a fair hearing was not possible in respect of claim 1”.

[16]Judge Gall’s decision on the unreasonable manner of the conduct of proceedings was based on detailed consideration of number of examples of behaviour by the claimant. It included his conclusion that “the claimant essentially refuses to accept case management decisions which are made but not as she believes they ought to be. She similarly did not accept the communication to her that the Rules which would be applied at the PH were the 2013 Rules. It is one thing to conclude that the view taken was not correct. That may well be the view to which Ms McMahon adhered. What she did however was to seek to advance, once more, the proposition that the 2004 Rules applied”

[17]Judge Gall refused the application for strike out of claims 2 and 3 on the grounds of unreasonable conduct of the proceedings. He noted that these claims did not have the background of the earlier events which occurred in claim 1 although the claimant’s behaviour leading up to the Preliminary Hearing was relevant. He concluded that the claimant’s manner of conduct of these proceedings has not been unreasonable “as things currently stand” although he commented that her conduct of the proceedings “has certainly not been ideal” and he commented that his conclusion did not mean that the conduct of proceedings in claims 2 and 3 was reasonable.

[18]Judge Gall refused the applications for strike out of claims 2 and 3 on the ground that a fair hearing was not possible. He noted that claim 3 involved allegations of discrimination going back to 2009 and in relation to the disability discrimination claim, the respondent’s had raised a time bar point. He noted that assessment of a fair hearing “has to involve recognition of the fact that witnesses are to be asked about events said to have occurred at least seven years prior to any hearing”. However, he also noted that claims 2 and 3 had been current for just under 3 years. While that is a “relatively long time” for a case to be live before the employment tribunal, he commented that it was not unique. He noted that “what is of particular significance is the fact that no meaningful progress has been made in bringing the case to a Hearing” although he recognised that “mediation has accounted for around four months of the life of the cases and that the claimant has been unwell for a period of time”. He concluded “with a degree of hesitation” that he would not strike out the claims on the basis that a fair hearing was no longer possible “as matters currently stand”.

[19]Judge Gall’s decision meant that claim 2 and claim 3, insofar as it was based on the protected characteristic of disability, could proceed. He directed that a case management Preliminary Hearing should be listed. Claimant’s appeal of Judge Gall’s decision

[20]The claimant found the decision difficult to accept. She did not believe that her conduct warranted strike out of claim 1 and she disputed some of the facts on which Judge Gall relied, such as the number of appeals.

[21]She appealed Judge Gall’s decision to the Employment Appeal Tribunal ( “the EAT”) within the 42 day period under the Employment Appeal Tribunal Rules (the “EAT Rules”). The appeal was rejected by Lady Wise under rule 3(7) of the EAT Rules . Her opinion was that the appeal disclosed no reasonable grounds for bringing an appeal. This decision was sent to the claimant on 22 August 2016. The claimant’s attention was drawn to rule 3(10) of the EAT Rules and a copy of rule 3 was enclosed.

[22]The claimant understood that applying for a rule 3(10) hearing before a judge was an option available to her. However, she did not understand that this was a step she was required to take. She believed that there was no point in a rule 3(10) hearing as she had nothing to add to what she had set out in her appeal. Having considered the various statutory provisions, EAT Rules and relevant practice directions, she believed that she was entitled to simply request leave to appeal Lady Wise’s decision under rule 3(7) to the Court of Session without having a rule 3(10 ) hearing.

[23]The claimant was also suffering from depression at the time and considered that further procedure would damage her mental health.

[24]The claimant wrote to the EAT on 29 September 2016 to request leave to appeal to the Court of Session. On 7 October 2018, the EAT Registrar advised her that “As no application has been made under rule 3(10) to have the matter looked at again by way of a hearing before a judge, the procedures at the Employment Appeal Tribunal have not been exhausted and so no action on the application for leave to appeal to the Court of Session can be taken at this time”.

[25]This led to correspondence between the claimant and the EAT between November 2016 and April 2017. The claimant set out 6 times in detail why she understood that it was permissible for her to request leave to appeal without requesting a rule 3(10) hearing. The EAT Registrar maintained that she had to request a rule 3(10) hearing first.

[26]The claimant did not accept that position. She still does not accept that position but she finally requested a rule 3(10) hearing on 6 February 2017. This was received by the EAT on 8 February 2017 and treated as 142 days out of time. The claimant was advised that she would need to seek an extension of time for a late application, giving the reason for the delay.

[27]The claimant wrote to the EAT on 19 April 2017, making an application for an extension of time to request a rule 3(10) hearing. She said she was making the application “under duress”. The claimant still considered this was a step she was not required to take.

[28]On 4 July 2017, the Registrar refused that request and this led to the claimant appealing against that decision which was considered at a hearing before Lady Wise on 13 April 2018. At the claimant’s request, this hearing was on the papers.

[29]Lady Wise did not accept the claimant’s submission that she was entitled to proceed straight to an appeal to the Court of Session without a hearing under rule 3(10). She then concluded that even if that had been competent, it would not have been appropriate in the particular case. She noted that the claimant was an “experienced litigator” and was aware of the rule 3(10) procedure and could have complied with it timeously. She noted that the claimant’s initial application for leave to appeal to the Court of Session was made at least 10 days after the expiry of time to seek a rule 3(10) hearing. She concluded that the reason for the delay was the claimant’s desire to appeal directly to the Court of Session and that she had given no good explanation for her failure to apply timeously for a rule 3(10) hearing. She said there was no suggestion that the claimant’s disability prevented her applying timeously. She concluded that the claimant has sought to employ “very questionable tactics and procedural abuse” . This judgment was issued on 9 July 2018.

[31]On 17 August 2018 , the claimant wrote to the EAT for permission to appeal the decision. By letter dated 18 September 2018, the EAT refused that application. Part of the reason was that they said the Rules did not provide for an appeal where a rule 3 (10) hearing had not taken place.

[32]The claimant submitted an application to the Court of Session for leave to appeal on 29 October 2018. Following a hearing in January 2019, the application was rejected and the decision intimated on 10 April 2019.

[33]There was then further correspondence between the claimant and the Court of Session and between the claimant and the Supreme Court. By letter of 3 June 2019, the Supreme Court confirmed that they did not have jurisdiction and the decision of the Court of Session of 10 April 2019 could not be appealed. The letter said that the claimant should ask the Court of Session for confirmation that she had exhausted all domestic remedies.

[34]The claimant wrote to the Court of Session on 6 June 2019. The Court of Session wrote to the claimant on 7 June 2019 confirming there was no further avenue of appeal with the Court of Session.

[35]The claimant understood that she had no further right of appeal in the UK and she applied to the European Court of Human Rights on 8 October 2019.

[36]By letter dated 30 January 2020, the Registry of the ECHR advised that the Court had decided that the claimant’s application was inadmissible as the domestic remedies had not been exhausted as required as the claimant “did not appeal against the decision complained of or raise matters before another competent authority”. Attempts to progress claims 2 & 3

[37]A case management hearing was listed for 6 May 2016.

[38]On 11 April 2016, the respondent wrote to the claimant seeking written answers to aspects of claim 2 and wrote to the Tribunal with suggested next steps which included listing a Preliminary Hearing to consider the issue of time bar in relation to claim 3.

[39]On 16 April 2016, the claimant responded that she would respond as soon as she could. 40 28 April 2016, the Tribunal asked parties for their comments on whether the case management hearing should be postponed in light of the appeal? The respondent replied that it should go ahead, and gave reasons for that position. The claimant questioned why Judge Gall thought it should be postponed before she could comment. Judge Gall decided to postpone the case management hearing and asked the respondents for more detail on the time bar point. This was provided on 19 May 2016. The claimant indicated she would provide the information that had been requested by the respondents in relation to claim 2.

[41]Further correspondence between the Tribunal and the parties included the claimant providing what she described as a “schedule of material facts, applicable law, relevant documents and witnesses for the claimant’s unlawful reduction from wages claim”.

[42]On 24 August 2016, the Tribunal refused the respondent’s application for Preliminary Hearing on time bar and sisted the claims pending the outcome of the EAT proceedings. The Tribunal had not been advised at that point that the appeal outcome had been issued.

[43]There was further correspondence between the Tribunal and the parties between August and November 2016.

[44]On 20 February 2017, the Tribunal asked the parties for an update on the appeal. On 23 February 2017 the claimant advised she was still waiting for the decision from the EAT on whether it would grant her leave to appeal to the Court of Session. She stated “It would not be appropriate in these circumstances …for the sist to be recalled and for any hearing at the ET to proceed at this time.”

[45]On 13 July 2017, the claimant wrote to the Tribunal . She set out her position in relation to the EAT’s decision and said that she “wished it to be clear to the Employment Tribunal that I intend to follow up any Court of Session application, that is necessary, to the Supreme Court and thereafter to the European Court of Justice should one of both of those become necessary.” She stated that because of the appeal and her mental health disability, “it would not be appropriate for any dates to be set for hearings in any of my existing Employment Tribunal claims at this time” . She said that if dates were set by the ET, even if it was said by the ET that they could subsequently be cancelled if necessary “it will cause significant further anxiety for me and mat have the serious adverse effect of making the tribunal process a hostile, oppressive, demeaning and humiliating environment for me”.

[46]On 2 October 2018, the Tribunal wrote to the parties, noting that appeal to the Court of Session had been refused by the EAT and asking whether parties were now in a position to proceed to a hearing. On 14 October 2018, the claimant wrote to the Tribunal advising she intended to appeal to the Court of session. She repeated that listing any dates in the employment tribunal it would cause significant further anxiety for her and may have the serious adverse effect of making the tribunal process a hostile, oppressive, demeaning and humiliating experience for her. She said “Please therefore do not set any dates for any such hearing in the Employment Tribunal until I have exhausted any legitimate and lawful domestic and European Court of Justice Commission remedies as may be necessary”

[47]In May, July and October 2018 and April 2019 and January and May 2020, the respondents raised concerns about the lack of progress and the prospect of a fair hearing.

[48]Throughout this period, the claims remained sisted. Once the Tribunal became aware that the ECHR proceedings were completed, it wrote to the parties asking for an update.

[49]On 25 February 2020, The claimant asked for a hearing in relation to her disability status before the claims could proceed. She stated that the respondents could not be a party to such a hearing which “would determine how the Tribunal should treat the claimant in respect of her mental health in the proceedings”.

[50]On 5 March 2020, the Tribunal asked the claimant to confirm that she was agreeing that the sist could be lifted and if so, a case management hearing would be listed where any reasonable adjustments could be discussed. It was explained that “Both parties would be included in that discussion as there needs to be consideration of a fair hearing for both parties.”

[51]On 17 March 2020 he claimant replied saying that recalling the sist would not be reasonable or in the interests of justice until her disability status “is properly resolved”. This was refused but the claimant was asked to set out what adjustments she needed.

[52]There was correspondence in relation to this matter, with some delay at the Tribunal’s end when it did not refer the claimant’s correspondence timeously to a Judge for directions.

[53]For a period, between March and August 2020, there were no hearings in person in the Employment Tribunal due to the pandemic.

[54]On 20 October 2020, Judge Walker wrote to parties and said that it would not be appropriate to make any comment on whether the claimant is a disabled person as this is a live issue in one of the cases. However, Judge Walker said that it would be possible to make most of the adjustments requested without making such an assessment. Directions were given including a case management preliminary hearing to be listed in January or February 2021.

[55]The respondent made the applications for strike out that are the subject of this hearing in November 2020.

[56]It was not possible to list the case management hearing in January or February 2021. Correspondence about adjustments continued.

[57]A case management hearing in person finally took place on 8 October 2021. The claimant was now represented by Mr Woolfson. Judge Walker directed that the respondent’s application for strike out would be listed for a hearing as soon as possible and it was agreed that that should be considered before any further case management took place . The preliminary hearing was listed to take place in person, on non-consecutive days in the afternoons. Provisions were put in place for the claimant to have regular breaks and for her to have a private place to go to if she became upset. Relevant law EAT Procedure

[58]The procedure to be followed at the EAT is set out in the Employment Appeal Tribunal Rules 1993. Rule 3(10) says:- “Subject to paragraph (7ZA) where notification has been given under paragraph (7) and within 28 days of the date the notification was sent, an appellant or special advocate expresses dissatisfaction in writing with the reasons given by the judge or Registrar for his opinion, he is entitled to have the matter heard before a judge who shall make a direction as to whether any further action should be taken on the notice of appeal or document under paragraph (5) or (6).”

[59]The EAT Practice Direction 2013 , provides in relation to rule 3 (10) hearings, at para 11.5: “Reasons will be sent and within 28 days. The appellant may request an oral hearing ( known as a “rule 3(10) hearing”) before a judge unless the judge determining the sift has ruled that the appeal is wholly without merit.”

[60]S37 of the Employment Tribunals Act 1996 provides that an appeal on any question of law lies from any decision or order of the Appeal Tribunal to the relevant appeal court with the leave or the Appeal Tribunal or of any relevant appeal court. Striking out a claim

[61]Section 37 of the Employment Tribunals Rules of Procedure 2013 provides the grounds on which a claim may be struck out by the Tribunal. These are:(a) That it is scandalous or vexatious or has no reasonable prospects of success;

(b) That the manner in which the proceedings have been conducted by or on behalf of the claimant....has been scandalous, unreasonable or vexatious;

(d) That it has not been actively pursued;

(e) That the Tribunal considers it is no longer possible to have a fair hearing in respect of the claim... Respondents’ submissions Previous strike out application

[62]Judge Gall’s observations and findings are of invaluable assistance as they were informed by his intimate knowledge to the proceedings at that time.

[63]The Tribunal is being asked to assess the claimant’s conduct since 2016 and the question of whether a fair hearing is possible. This is almost 6 years after clear judicial findings on the same issues.

[64]Proceedings were raised on 25 June 2013 and relate to allegations going back as far as 2009. No preliminary or substantive issues have been addressed apart from the strike out judgment of Judge Gall. Fair hearing

[65]It is recognised that only in rare cases will the Tribunal strike out a claim on the ground that a fair hearing is not possible (Abergaze v Shrewsbury College

2009 EWCA Civ 96

). It is necessary for the Tribunal to consider the relevant facts to determine through a clear analytical process whether a fair trial is no longer possible.

[66]It is appreciated that length of time is not, in isolation, going to mean that a fair trial is not possible but it is a material factor. These proceedings have been at the ET for over 8½ years – that is an extraordinary length of time, especially when the proceedings are barely further forward than when lodged and arguably, may go backwards before they can go forwards.

[67]It is not accepted that lack of progress is due to the respondents. There has not been the usual case management preliminary hearing and it is agreed by the claimant’s representative that issues of specification should be dealt with after this application. Claim 2 is, if anything less clear than it was. It has been suggested that amendment may be made to suggest that the claimant is still employed or, that no amendment is needed and the TUPE issue may be dropped. The respondents made an application for a preliminary hearing which was refused and the claim was then sisted.

[68]It is acknowledged that the pandemic will have had some impact on the Tribunal’s ability to advance the proceeding but the period of delay of 3½ years was entirely due to the claimant as she pursued her appeal to the EAT, the Court of Session, and the ECHR.

[69]This is a truly exceptional case and the Tribunal is invited to consider Judge Gall’s recognition 7 years ago of the length of time the claimant had been current at that stage,

[70]Abergaze can be distinguished as in that case there had been a decision on liability but not a decision on remedy. To strike out would have been to deprive a claimant of a remedy where he had succeeded on the merits. This case is different. Not only has there been a lack of progress on substantive issues, there has been no progress son preliminary issues either. There is a great deal of case management still required before any of that can be addressed.

[71]In Taylor v HPO Enterprise Services UK Ltd 2011 6 WLUK 283, the claim was struck out as a hearing was no longer possible. Abergaze was distinguished due to the different stage the proceedings were at.

[72]The respondent has made the Tribunal and the claimant aware of its concerns on a number of occasions. The President wrote to the claimant in 2012 warning of the possibility that a fair trial may not be possible. The respondent has sought to resolve the claims, having engaged in judicial mediation. They have no option but to make the application as they see no alternative way forward.

[73]The Tribunal is invited to consider the historic difficulties in these proceedings. If the next step is not the claimant’s preference she will engage in lengthy and protracted correspondence about it.

[74]She has accused Judge Gall of bias and refused to give evidence in relation to the application for a deposit. In all likelihood, the respondent submits, the proceedings, if allowed to proceed will not be straightforward and will be protracted and resource draining. For example, the claimant suggested in October 2021 at the case management hearing that she will assert that she is still employed by one of the respondents. The respondent finds this astonishing not least when the claimant lost an attempt to interdict her employer from terminating her employment in the sheriff court and raised an unfair dismissal claim (struck out for nonattendance at a case management Preliminary Hearing, a decision that was subsequently unsuccessfully appealed to the EAT). Any amendment procedure will add further delay and, if permitted, would require further evidence on why the claimant’s employment was terminated

[75]In respect of claim 2, the Tribunal is invited to consider document pp298- 308. The respondent asked questions to try and narrow the issues. The document provided by the claimant is entitled “Preliminary draft schedule of main facts”. There is clearly more to come. It is not a straightforward case as suggested and the likelihood of proceeding to a hearing in the near future is wholly unrealistic,

[76]In respect of claim 3, the Tribunal is invited to have regard to the document at pp 44-65. The complaints are sprawling in nature, plainly require further specification and contain preliminary issues such as time bar. In crossexamination, the claimant was clear this was a summary document only. Getting to a hearing will not be achieved swiftly or in a straightforward manner. Prejudice to the respondents

[77]It is accepted that the claimant would be prejudiced if her claim were struck out. However, this has to be balanced against the prejudice to the respondents. The claimant says she has emails which support her position but it is inappropriate to ask the Tribunal to assess this without a full hearing. Also a reference to a handful of allegations in the context of a sprawling claim with myriad other allegations does not provide a proper basis to invite the tribunal to make meaningful finding on prejudice. The respondents’ position is that 68 of the 70 allegations are out of time and specifically the allegations based on the emails referred to by the claimant.

[78]Reference is made to Riley v Crown Prosecution Service

[2013] EWCA Civ 951

where, referring to Andreou v Lord Chancellors Department

[2002] EWCA Civ 1192

, the court said: “Article 6 emphasises that every litigant is entitled to a “fair trial within a reasonable time” . That is an entitlement of both parties to litigation

[79]Reference is made to Ossannaya v South West Essex Primary Care Trust

UKEAT/0629/11

. “A hearing within a reasonable time is one in respect of which the interest of both parties have to be considered; reasonable is not a criterion that is to be satisfied through the eyes of one party alone.”

[80]Strike out is not always a sanction for unreasonable conduct it can also be viewed as an aid to justice (para 34 Osonnaya)

[81]Claim 2 – the quantification is 2 years for unauthorised deductions. The claimant now values her claim at £200000. The respondent submits that it would require amendment to broaden the scope of the claim. It is wholly unsatisfactory for the respondent not to know where they stand, Even at the hearing, the claimant was not willing to advise the Tribunal of the definitive basis of the argument being advanced. Cogency of evidence

[82]Claim 3 will require detailed witness evidence from a substantial number of individuals. Claim 3 comprises 24 pages of 70 allegations of discrimination going back to 2009.

[83]Claim 2 relates to alleged deductions in 2011 . A witness will have to recount events from 11 years ago and the case is not, as the claimant suggests in a state when a final hearing could be set down quickly. A suggestion of an ongoing employment relationship would add complexity as would evidence going back to 2007 in relation to the TUPE issue.

[84]Witness ability to recount events will be grossly impacted by such a lengthy passage of time. The Tribunal is invited to reject the position that witness recollection will not be affected. Anyone’s recollection will be impacted by the passage of such an amount of time especially when the we are not yet clear on the specific basis of the complaints.

[85]In cases of discrimination is it open to a Tribunal to draw negative inferences from a respondent’s inability to adequately explain why it took the actions it did. There is a real risk to the respondents in circumstances where so much time has passed.

[86]P281 contains a list of individuals who the respondents believe will be relevant potential witnesses . Of the 19 on the list, only 3 remain employed. It is accepted this does not prevent them attending as witnesses but it undoubtedly places the respondents in difficulty. This is only an informed guess. It is accepted that further particularisation is required.

Conclusion

[87]Unlike Abergaze, there has been no liability hearing, no witness statements have been obtained

[88]Reference is made to Merelie v Shrewsbury College of Arts & Technology [2009] . In that case , the judge was balancing the evidence of the claimant who was obsessed with her case with those who have got on with their lives. This is similar to the present case where the cogency of the respondents’ evidence will be more impacted than the claimant’s. This is contrary to the principle that parties should be on an equal footing.

[89]Judge Gall accepted there was a legitimate concern in 2016 about the cogency of evidence. These legitimate concerns are all the more pressing for the further delay. Proportionality

[90]Is there a less draconian sanction? It is submitted that this is not relevant where a fair trial is not possible.

[91]There is no requirement for blameworthy conduct. Even if the Tribunal is not with the respondents on unreasonable conduct, the claims can be struck out on fair hearing grounds alone. Unreasonable conduct

[92]Judge Gall’s judgment is referred to in terms for the claimant’s conduct to that date. The claimant should have been under warning that her behaviour needed to improve.

[93]After the strike out judgement, the claimant continued to have persistent disregard for required procedural steps. Seeking leave to appeal the r3(7) decision was a deliberate step. The claimant knew of the rule 3(10) process but chose not to use it.

[94]Despite being advised of the correct process, the claimant delayed for a considerable period before acting on the advice and requesting a rule 3(10)

[95]The claimant displayed a disrespect for judicial decisions that was reminiscent of her earlier behaviour referred to by Judge Gall.

[96]The Tribunal can rely on the findings of the upper courts for their interpretation of the law.

[97]The claimant was aware that the ECHR would be unable to proceed with any appeal where she had not exhausted her domestic remedies. She had a similar outcome to an appeal presented in relation to claim 1 in 2012/13.

[98]The respondents submits that the circumstances fall within the first category of Blockbuster as “ deliberate and persistent disregard of required procedural steps” and so no consideration of a fair trial is required.

[99]Alternatively, for the reasons already given, a fair trial is not possible Claimant’s submissions Unreasonable conduct

[100]The Tribunal’s focus should be on conduct since March 2016 as Judge Gall concluded that the conduct of proceedings as at that date had not been unreasonable. If the Tribunal concludes that the claimant’s conduct since March 2016 has not been unreasonable, the claimants should not be struck out on grounds of unreasonable conduct.

[101]In respect of Rule 3 (10) the claimant considered the relevant provisions and case law and concluded that it was not mandatory to request a 3(10) hearing. She was also concerned about the effect on her mental health and she understood that a fee was payable. Nothing in her conduct is close to being unreasonable.

[102]It is not necessary for the Tribunal to reach its own conclusion as to whether as a matter of law it is competent to seek leave to appeal against a rule 3(7) hearing. The issue is whether the claimants conduct has been unreasonable.

[103]The respondents rely on Lady Wise’s comments. It is respectfully suggested that these may be due to the claimant not having attended the hearing.

[104]With regard to the further appeal to the ECHR it is apparent that the claimant had exhausted her domestic remedies and so the alleged conduct, which the respondents say is unreasonable, did not take place,

[105]James v Blockbuster Entertainment Ltd

[2006] EWCA Civ 684

refers to conduct taking the form of “deliberate and persistent disregard of procedural steps”. Insofar as the application relies on persistent disregard of procedural stapes, the respondents are mistaken that the claimant had not exhausted her domestic remedies Therefore the only aspect of the claimant’s conduct to be considered is not initially requesting a rule 3(10) hearing.

[106]The claimant is correct that a there is no requirement to request a rule 3(10) and there is nothing in the EAT Rules that says that leave to appeal is conditional on such a right having been exercised. Is a fair hearing possible?

[107]If the claimant had exercised her right under rule 3(10) different outcomes are possible. If the default is not intentional or contumelious (reference to Birkett v James

[1977] WLR 38

) then it is necessary to show that(a) there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers and

(b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants…”

[108]Although that case, quoted in Evans v Commissioner of the Metropolis [1992] WL 895709 , involved a claim not being actively pursued, it is submitted that the principles are relevant here given that the respondents are relying on delay. There was no intentional or contumelious default on the part of the claimant and the delay has not been inordinate or inexcusable. Both conditions require to be satisfied ( see Evans per lord Steyn) , Therefore delay alone would not justify strike out. Cogency of evidence

[109]It is acknowledged that memories can fade over time. For the wages claim there would be two witnesses, the claimant and a witness for the respondent. The documents are available and the legal issues will be of the greatest significance. There is little if any issue around the cogency of evidence. The claimant’s position will be whether the claimant had a legal entitlement to the wages claimed. The claimant’s position will be that there were no required contingent events which she did not meet and the Tribunal will need to consider whether the documents provided to the claimant support that position. The passage of time should have no material impact on the consideration of these issues or the ability of the respondent to defend the claim.

[110]The claim of disability discrimination will rely to a large extent on documentary evidence . The claimant is bringing serious issues to the attention of the Tribunal. She has documentary evidence including emails which give a clear insight into how she was being viewed and treated at the time.

[111]Even though there is a list of witnesses at p281, this is not the claimant’s list of witnesses She intends only to call 2 or 3 in addition to herself. What is more important is who the respondents intends to call. This has not been confirmed. The fact that a number of witnesses are no longer employed should not be a material factor. It is no answer to say that. The claimant has provide a level of detail in her ET1 and accompanying list of allegations that should have enabled the respondents to take preliminary steps with regard to obtaining witness evidence. The respondents have not sought to obtain further information from her in relation to her disability discrimination. Just when a case management hearing was due to be listed in 2015, the respondents asked for all her claims to be struck out.

[112]The President’s letter has been described as a “warning” but the claimant is unclear why that statement has been attached. It made the claimant aware that the issue of a fair hearing can arise where there has been a lengthy delay. However it was issued prior to claims 2 and 3 being issued and before appeal proceedings so it is not relevant to conduct of these claims.

[113]Prejudice to the claimant of the claims being struck out would significantly outweigh prejudice to the respondents . It is also a matter of public interest to have discriminatory treatment addressed.

[114]The Tribunal must apply a two-stage test. Firstly whether the grounds in rule 37(1) (b) or (e ) have been met and if so, decide whether to exercise discretion to strike out, given the permissive nature of the rule. The claimant submits that the grounds have not been met and, even if they have, strike out is not appropriate. There has been no deliberate and persistent disregard of the required procedural steps (Blockbuster) and there has been no intentional and contumelious default or inordinate or inexcusable delay ( Birkett) .

[115]The claimant submits that it is now possible to proceed to a hearing on the merits of claim 2 and this should proceed separately. As for the discrimination claim, reference is made to Anyanwu v South bank Student Union

[2001] UKHL 14

– such cases should not be struck out for abuse of process except in the most obvious and plainest of cases. Reference to paragraph 24 of the judgment “Discrimination cases are generally fact sensitive and their proper determination is always vital in our pluralistic society. In this field perhaps more than any other the bias in favour of a claim being examined on the merits or demerits of its particular facts is a matter of high public interest”

[116]It is submitted that with appropriate case management there is no reason why the disability discrimination claim cannot be moved towards a hearing most likely with further particulars having been provided by both parties and witnesses identified Discussion and decision

[117]I consider it important to acknowledge before I set out my decision that I accept that the claimant is genuine in her desire to progress the claims and in her belief that she has been poorly treated by the respondents. I also accept that she has acted in good faith in her attempts to appeal Judge Gall’s decision and in her various statements to the Tribunal that she was not able to cope with hearings in the present cases while she was pursuing the appeals. It was clear that her mental health presents significant challenges and that giving her evidence in this hearing was a difficult process. I also think it is important to acknowledge the sensitivity shown by Ms Skeoch in her questioning of the claimant during this hearing. Application under rule 37(1)(b)

[118]I will start with the application under rule 37(1)(b) that both claims should be struck out as the manner in which they have been conducted by the claimant has been unreasonable. This is a two-step process. I first have to decide whether the threshold of unreasonable conduct of the proceedings has been met and then whether it is in accordance with the overriding objective to strike out the claim on that ground. Consideration must be given to all the circumstances. In particular, it must be remembered that strike out is a draconian step that should not be taken if there is a more proportionate lesser sanction available. In particular, consideration should be given to whether a fair trial is still possible.

[119]I have considered this issue carefully and considered the case law to which I was referred. I am conscious that my focus must be on the manner of conducting the proceedings that are the subject of the application ( being claim 2 and what remains of claim 3). I will refer to these as the “Present Proceedings”. The appeal to the EAT and the issues around the rule 3(10) hearing were concerned with the claim 1 and the part of claim 3 that has been struck out. I will refer to these as the “Appeal Proceedings”. The bulk of the respondent’s challenge relates to the manner in which the Appeal Proceedings were conducted and would not, of itself, competently found an application for strike out of the Present Proceedings.

[120]However , if the claimant was acting unreasonably in pursuing those appeals, then, although that would be conduct of the Appeal Proceedings , that could also be potentially relevant to the application before me. The Present Proceedings were sisted at the claimant’s insistence while the Appeal Proceedings were concluded. If the reason for the sist was based on unreasonable conduct of Appeal Proceedings, then insisting on the sist may also be unreasonable conduct of the Present Proceedings.

[121]I start from 2016. Although he did not ultimately conclude that the manner of conducting the Present Proceedings had been unreasonable, I take into account that there were already significant delays by 2016 and that Judge Gall expressed concerns about the claimant’s conduct of these proceedings at that stage.

[122]As Judge Gall comments, it is not unreasonable to appeal a decision of any court. That is a right which any litigant has. That is unquestionably correct. However, the manner and number of appeals may be unreasonable.

[123]Having heard from Ms McMahon, I do not doubt the sincerity of her belief that she was not required to apply to the EAT for a rule 3(10) hearing following a rejection under rule 3(7) before seeking leave to appeal to the Court of Session. I would go further and say that that belief was not, in itself, unreasonable. The word “may” in the EAT Rules and the Practice Direction could reasonably be interpreted as permissive and not mandatory and I accept that was the claimant’s interpretation. However, critically, this was not a belief shared by the Registrar of the EAT, Lady Wise or the Court of Session.

[124]It is impossible to know what the outcome of such a rule 3(10) hearing would have been. However, a party conducting proceedings reasonably would have accepted the EAT’s direction on that procedural point and applied for a rule 3(10) hearing. It was unreasonable conduct of the Appeal Proceedings to continue to engage in protracted correspondence arguing the point instead of applying for a rule 3(10) hearing promptly on being advised it was required.

[125]The claimant said in evidence that she thought she would have to pay a fee of £1,200 for a rule 3(10) hearing. That would have been a relevant consideration if the claimant had reasonably believed that to be the case. I do not accept that she did believe that. She does not mention it in her correspondence with the EAT.

[126]If she did believe that a fee was payable, it was not a reasonable belief. Even under the original fee regime, a separate fee would not have been required for a rule 3(10) hearing. The claimant is clearly capable of reading and absorbing detailed legislation to find that out. A call or letter to the EAT would also have clarified the point. Almost 3 years were taken up with this issue and in the end, of course, no rule 3(10) hearing ever took place.

[127]The claimant says that one of the reasons for wishing to bypass a rule 3(10) hearing was that this extra hearing would put additional strain on her mental health. I accept that was part of her motivation but this does not affect my conclusion that to persist with her position that a rule 3(10) hearing was not required before an appeal could be made to the Court of Session was unreasonable conduct of the Appeal Proceedings.

[128]I do not consider that the claimant persistently and deliberately disregarded procedural steps as suggested by the respondents. I accept her evidence that she believed that she was correct in her interpretation. Persisting in this belief when judicial authorities told her she was wrong and that she needed to take a different course was not reasonable. It is also a criticism made of the claimant’s conduct by Judge Gall. However, I do not consider it was deliberate in the sense envisaged by Birkett v James.

[129]I turn then to consider whether the manner of conducting the Present Proceedings was unreasonable as a consequence of the unreasonable manner of conducting the Appeal Proceedings. Specifically, whether insisting on the lengthy sist was unreasonable conduct of the Present Proceedings.

[130]For the claimant to require that the Present Proceedings remained sisted was not, in itself, unreasonable. Had appeals been proceeding in the normal course, this would have been the usual direction. If her appeal had been successful, it would have been proportionate for the claims to be heard together.

[131]It is arguable that claim 2 could have been heard even while the appeal process was ongoing. However, I have accepted that the claimant has been suffering from mental health challenges through this period and the claimant indicated that she was unable to deal with any hearings in the Employment Tribunal at that time due to her mental health. She was not asked by the respondents nor by the Tribunal to provide evidence to support that contention. I do not consider it was unreasonable conduct of the proceedings for the claimant to request that no hearings take place while she was engaged in the appeal process on account of her mental health.

[132]It is relevant that , even if the claimant had applied for a rule 3(10) hearing, we do not know what the outcome would have been. If unsuccessful, the claimant may still have applied for leave to appeal to the Court of Session and may have had a hearing there and from there , possibly to the Supreme Court. It is likely that some delay was caused by the claimant’s unreasonable conduct in relation to the rule 3(10) hearing but it is not certain how much.

[133]Despite the finding that the manner of conducting the Appeal Proceedings was unreasonable, I am not satisfied that the manner of conducting the Present Proceedings was unreasonable and I refuse the respondent’s application insofar as it is made under rule 37(1)(b) . Application under rule 37(1) ( e)

[134]I therefore turn to the respondents’ alternative application under rule 37(1) (e) which is that both claims should be struck out because a fair hearing is no longer possible.

[135]I have looked at claims 2 and 3 separately. Is a fair hearing possible for claim 2?

[136]As currently pled, claim 2 is in narrow focus with the issues clearly defined in the ET1 and the ET3. The respondent does not dispute that the claimant was potentially entitled to the benefit of the relevant Scheme.

[137]However, the respondents say that claim 2 does not fall within the Tribunal’s jurisdiction, as any payment under the Scheme would be made by the insurance company and not by the respondent. They say that therefore the sum claimed is not “wages”.

[138]Secondly, the respondents say that the claimant did not comply with the requirements of the scheme as she would not submit to a medical examination. The claimant’s position is that, under the terms of the Scheme, she was not required to undergo a medical examination and could provide her own evidence.

[139]It seems to me that, as currently pled, it is still possible to have a fair hearing of the issues in claim 2 despite the length of time that had passed. The issues are narrow and based on documentary evidence or legal interpretation of the terms of the Scheme. The basis of the claim and the response were clearly articulated at the time.

[140]The respondents say that witnesses will require to recall events from 2011. That is true but there appears to be very little, if any , factual dispute that will require oral evidence. As I understand the position, the claimant accepts that she would not agree to a medical examination. The question, is whether she was required to in terms of the Scheme ( if in fact, the Tribunal has jurisdiction to hear the claim at all.)

[141]There is one additional potential issue of fact. If the claimant is correct that she was entitled to provide her own medical evidence and the respondents do not succeed on their jurisdictional point, then the Tribunal would have to decide whether that medical evidence would have been sufficient to entitle her to the benefit of the Scheme that she seeks. This would be necessary to decide what was “properly payable”. However, as a claim of unauthorised deductions, the onus of proof is on the claimant. If there is a difficulty in proving this matter, the claim will fail and so any prejudice caused by the delay will be to the claimant.

[142]I stress I have refused the application for strike out in relation to claim 2 as currently pled . Mr Woolfson and the claimant suggested that the claim is wider in scope than it appears at first viewing. There was a suggestion that the claim can be treated as continuing to the present date without the need for any amendment.

[143]I made it clear at the hearing that I do not accept that proposition. A claim for unauthorised deduction from wages is retrospective and not prospective. It is a claim in relation to identified deductions (or a series of deductions) that have been made. Even if the claim is based on a series of deductions, the claim cannot cover deductions that have not yet been made at the time that the claim is presented.

[144]I have considered the issue of a fair trial on the basis of the claim as it is currently pled, which is a claim of unauthorised deductions from 28 May 2011 to the date of the claim ( being 23 June 2013) with the last alleged deduction on 28 May 2013.

[145]It is possible, of course, for the claimant to apply to amend the claim to add alleged deductions to the claim that are said to have been made since the claim was made. If the claimant wishes to amend, such an application should be made promptly and it will be considered on the normal principles, including balance of prejudice to both parties . Such consideration will take account of whether a fair trial is possible of any extended claim.

[146]While I have decided that it will be possible to have a fair trial of the substance of claim 2, I am concerned at the claimant’s assertion that there was a relevant transfer in terms of TUPE in 2007 from the Third Respondent to the First or Second Respondent. This is denied by the respondents who assert that the Third Respondent was the claimant’s employer throughout . They set out what they say occurred, which they say included a change of name and a share sale. I do not consider it would be possible to have a fair trial of this issue in 2022, some 15 years after the alleged transfer is said to have taken place. From the claim and the response it is clear that this would be a complex matter involving detailed documentary and oral evidence and the Tribunal would have to make detailed findings in fact about every aspect of the transactions. It would also not be proportionate to explore that issue when the Third Respondent accepts that, if the claimant succeeds in her claim, she will be entitled to payment from them. There is no obvious prejudice to the claimant in striking out this element of her claim.

[147]I therefore consider that claim 2 should be struck out against the First and Second Respondent under rule 37(1)(e). Is a fair hearing possible for claim 3?

[148]I have carefully considered the various cases cited to me by both representatives.

[149]I am conscious that it is unusual to strike out a claim of discrimination and that , as stated in Anyanwu, this should only be done “in the most obvious or plainest of cases” . However, that does not mean that a claim of discrimination can never be struck out where the circumstances merit it.

[150]A claim should not be struck out as a punishment. In this particular case, while I have found that the manner of conducting the Appeal Proceedings has been unreasonable, I have not found that to be deliberate or contumelious. While there has been inordinate delay, I do not consider it is inexcusable. The claimant clearly has a mental health condition which has contributed to her attitude to her own case and to her ability to progress the current cases while she was involved in an appeal process in relation to Judge Gall’s decision.

[151]In any case, there is no question of seeking to punish the claimant for any delay.

[152]When considering whether a claim should be struck out under rule 37, consideration must be given to whether a less draconian sanction would be appropriate. An important consideration, as noted above, is whether a fair trial is still possible.

[153]If the ground of strike out is simply, as under rule 37(1) (e) that a fair trial is not possible, then that conclusion should not be reached unless consideration has first been given to whether additional steps could be taken that would enable a fair trial to take place. If that consideration has taken place and no steps have been identified, then a finding that a fair trial is not possible must lead to strike out. To do otherwise would be unfair to the other party.

[154]This is made clear in the case of Peixoto v British Telecommunications PLC 2008 WL 1771466 which was considering rule 18(7)(f) of the 2004 rules, the equivalent provision to rule 37(1)(e). Paragraph 49 of the judgment provides “The assessment of whether a fair trial is impossible obviously invokes consideration of what other matters can be considered. ….. In every case there must be some question of proportionality. In our judgment that arises when dealing with rule 18(7)(f) at stages prior to the determination that a fair hearing is not possible. It could not be said that once the judgment had been made that a fair trial was impossible any further steps need to be considered. If the Tribunal reaches that conclusion and yet orders the case to go on for some reason it would be allowing itself as a public authority under the Human Rights Act to commit a violation of the Convention Art 6.1”

[155]As noted in Peixoto, paragraph 55, this is a separate issue from the “backward looking decisions” relating to unreasonable conduct. Essentially the Tribunal, when considering the issue of fair trial, has to look forward and consider whether that will be possible in the foreseeable future.

[156]The critical factor which is relied on in the present application is the length of time that has elapsed since the alleged discrimination and the effect that will have on the cogency of evidence and , in particular, the respondent’s ability to properly defend the claim.

[157]The respondents draw attention to the fact that the claim is at a very early stage and therefore different from some of the cases on which the claimant relies, such as Abergaze where the case was either at a hearing or had already had a liability hearing.

[158]It is also relevant , as noted in cases such as Osonnaya ( paragraph 17) , that Article 6 requires that a trial must take place within a reasonable time and that consideration of what is reasonable must include the interests of both parties. Delay in Employment Tribunal proceedings is not unusual. However, the delay in this case is extraordinary. Even if it were possible to get the claim to a final hearing in the next 6 months, the Tribunal would be considering allegations about incidents which are said to have occurred 12 and 13 years ago.

[159]However, delay alone, even extraordinary delay as in this case, is not sufficient grounds to conclude that a fair trial is not possible. It is also important that consideration is given to whether there are steps that could be taken which would mean that it would be possible to have a fair trial for both parties.

[160]I have considered the ET1 in claim 3 in detail. The body of the claim form sets out the claim in general terms. It refers to the claimant suffering “discrimination, about severe personal injury and injury to feelings, constant unjust criticism of my work, being unfairly picked on, being excluded, overbearing supervision, unwanted conduct related to my beliefs , being set up to fail, the abuse and misuse of power by some managers and HR, the turning of my workplace into a hostile, oppressive, demeaning and frightening environment for me and some of my colleagues. When I sought help to resolve these matters, some senior managers and HR personal instead of trying to stop it and prevent further instances of this unlawful discrimination and injury, colluded in it. I was humiliatingly suspended from work after agreeing to mediation and had false allegation made against me by an HR officer with no proper investigation. I also raised the unlawful discrimination of some of my colleagues by some managers and HR, the adverse effects on their health as well as mine of what was happening in the course of my employment. That is the lack of dignity, the hostile, demeaning, degrading, humiliating and offensive circumstances at work for some colleagues in breach of stated company policies on diversity, health and well-being, harassment and bullying on unlawful discriminatory grounds.”

[161]The claimant also again raises the issue of whether there were relevant transfers under TUPE in 2007.

[162]The claimant concludes that she has had continuous incapacity to work since September 2010 which she says was a result of the unlawful discrimination, harassment, victimisation and injury to feelings on grounds of her philosophical belief or alternatively because of her disability or alternatively because of her association with disabled colleagues.

[163]Attached to the ET1 is a paper apart titled “Summary schedule of allegations”. This runs to 20 pages. The first 11 pages relate to alleged incidents in 2009, 7 pages relate to alleged incidents in 2010, there is one reference to the alleged failure to make payments under the PHI scheme from “April 11 to date” and an allegation of “Series of failures to keep me informed of changes in the workplace that would affect me and I would otherwise receive eg policy changes, staff changes, management changes” which is said to be from “July 2010 onwards”. There are two pages of undated allegations. The allegations include a number of initials which are explained on the last page as relating to 18 individuals including the claimant. While the respondents refer in their submissions to 70 allegations, there are within each “box” of allegations, several “sub-allegations”. I count there to be over 150 allegations.

[164]It is not possible in this judgment to set out more than a flavour of the allegations. The first allegation is “malicious criticism of my work by JW. Malicious criticism of my work repeated to intimidate me, PK, JW” . This is said to have occurred in January 2009. Many of the allegations are in general terms like that.

[165]Some of the allegations are more specific. For example, “When I made legitimate complaint of unlawful acts, I was said to have a “mental health issue” that impacted my work. PK, JW. Malicious assertions that I “ambushed” staff at work, JW, PK, AC. Abuse of power by JW, forced from toilets, told to go home if “I couldn’t cope with being at work” JW Accused of manipulating co sick pay JW”. These incidents were all said to have taken place on 25 February 2009.

[166]The claimant suggests that these incidents were so extreme that the witnesses will recall this clearly. I have no doubt that some of the incidents may be recalled by witnesses in some level of detail. However, I am concerned that there are so many allegations, some specific but many in general terms, and almost of all of which are said to have taken place 12 or 13 years ago. The events which are so vivd to the claimant will not have the same importance to the large number of other potential witnesses. This is a case similar to Mereille where the judge was balancing the effect of the evidence of a Claimant considered to “be unreliable and obsessed with her case in comparison with those who have got on with their lives and not been engaged in this matter”.

[167]I agree with the respondents that witnesses’ recollection of what happened will be inevitably be diminished after 13 years and the respondents will be prejudiced in their attempts to defend the claim as a result. I appreciate that the claimant herself has a very strong recollection of what happened and that she says that she has documents that will support what she says. However , the Tribunal will not simply have to consider whether any factual allegation occurred. It will also have to consider why any incident occurred. As Ms Skeoch submitted, discrimination claims are nuanced. A Tribunal have may draw an inference from a lack of explanation by the respondents where the claimant sets out a prima facie case of discrimination.

[168]The claimant herself has suggested various alternative motivations for the treatment she says she was subjected to – it was alternatively because she was disabled, or it was because she was perceived as disabled (this appears to be a new addition to the ET1) or it was because she was speaking up for others who were disabled. Of course, her primary position as to the motivation of her mangers and others , was that she was treated less favourably because of her protected belief. That still is her position but that part of the claim has, of course, been struck out.

[169]The claimant suggests that the respondent should have taken steps to safeguard the evidence by taking statements. As the President pointed out in her letter to the claimant in 2012, there is no obligation on a respondent to do that but, in any event, what would the statements relate to? The majority of the allegations are general in scope and it is accepted for the claimant that further particularisation is required. The sheer number of the allegations makes this suggestion impractical.

[170]There will also be preliminary issues of disability status and time bar each of which is fact specific.

[171]I have considered whether there are steps that can be taken through case management which will make it possible to have a fair trial. One possibility could be an order that the allegations should be further particularised and the respondent then allowed to amend their response. It might also be possible for the claimant to provide a detailed witness statement of all the allegations and then the respondent could approach witnesses to see whether they are, in fact, able to remember the events in questions.

[172]However, I do not think either option is realistic or proportionate. The allegations are numerous and wide-ranging, in many cases generic in nature and largely relate to 2009-2010. It is not clear who the witnesses would be. There appear to be 17 individuals named by the claimant as involved in the events. These include 15 individuals identified by the claimant as having discriminated against her (or harassed or victimised her).There may, of course be other witnesses who were present and who the respondent could have spoken to (and perhaps called as witnesses) had the case come to a hearing closer in time to the events.

[173]I consider that the nature of the case is such that it is simply not possible for the respondent to present as detailed a defence now as they may have presented at the time. That is aggravated by the fact that the majority of the individuals have left their employment but it is mainly due to the passage of time.

[174]I accept that the claimant has a detailed recollection of all the events and has retained documents to support her position. It is clear that the claimant has been intensely focussed on these events for this period. However such a recollection, even one honestly retained, over 13 years is no guarantee of its reliability. The claimant’s memories will, inevitably, focus on and reinforce her own sense of grievance. The reliability of her recollection is likely to reduce each time the memory is recalled and relived.

[175]The allegations are clearly important to the claimant and it is important as a matter of public policy that claims of discrimination are ventilated. However, a fair trial must be a fair trial for both parties. Someone accused of discrimination (whether as a party to a claim or as a witness) is entitled to have that charge resolved within a reasonable time and with a reasonable opportunity to fairly defend themselves.

[176]I consider it is also relevant that the possibility of a claim being struck out on this ground was flagged to the claimant by the President in 2012 ( albeit not in respect of this claim) and that the respondent have repeatedly made clear their concern about the delay and the effect on a fair trial. Neither of these things is conclusive, of course, and I have concluded that it cannot be said that the claimant’s conduct necessarily caused the delay. However, I consider it is a relevant factor that the claimant was on notice that at some point, continued delay might lead to her claim being struck out.

[177]Having considered all the circumstances, and concluded there are no reasonable steps that could be taken to achieve a fair trial, I consider that a fair trial of claim 3 is not possible and that claim is therefore struck out.

[178]For completeness, I should say that if I had decided not to strike out claim 3 in its entirely , I would similarly have struck out the claim against the First and Second Respondents for the reasons given in claim 2. Further procedure

[179]I appreciate this will be disappointing for the claimant. It may be she will appeal my decision . That is, of course, her right. However, it is critical that claim 2 now proceeds to a hearing as soon as possible.

[180]I will direct that a case management Preliminary Hearing is listed in person for 2 hours. This hearing will deal with any applications, including applications to amend, which are made at least 7 days before the hearing, and make directions for a final hearing as soon as practical. Employment Judge: S Walker Date of Judgment: 27 February 2022 This is a corrected version of the judgment. Susan Walker (

[181]The first term the respondent’s agent should be implied was that receipt of any benefit would be subject to the terms of the relevant insurance scheme/policy (which would inevitably contain terms relating to level of cover, duration of cover, payment levels and mechanism for application and assessment of eligibility). It was argued that such a term was inherently obvious when considering the terms of the offer letter and handbook. The references to a scheme belonging to or being administered by a third party insurance provider, and the particular wording in the handbook that the benefits are “secured by” a policy demonstrated this. If this was not the intention, such references would not have been included.

[182]The Tribunal did not find this a term which could be implied into the contract the parties had concluded. Firstly the contract was perfectly capable of being performed without implying such a term – the term was not necessary to give the contract business efficacy. Secondly it was not so obvious as to be implied and finally there was no custom or practice in this case that such a term was necessary. Applying the ordinary and natural meanings of the words used within the context in which they were used, with the benefit of commercial common sense, the parties agreed the employer would secure the sums from the employer (who had secured an insurance policy for their own benefit). A term that the employee’s entitlement is somehow restricted to or affected by an insurance policy the employer had secured is entirely at odds with the authorities in this area (where the context was similar) and does not satisfy the legal tests necessary to become an implied term. It was obvious that the employer had an insurance scheme for its own benefit. The terms the respondent seeks to imply do not assist with regard to the claimant’s position given the clear intention of the parties.

[183]The second term the respondent’s agent argued should be implied was that the identity of the insurer providing the benefit may change from time to time. It was submitted that such a term was necessary to give business efficacy to the contract and/or was so obvious that it goes without saying. An employer must be able to change its provider in order to access the best rates available, as a matter of commercial common sense and to ensure it is getting the best for its employees. If that were not allowed an employer may find itself in a position where it is unable to provide the benefit at all for its employees, for example if the provider was to cease to exist or stopped providing the particular benefit. Such a situation would produce an absurd result, making the benefit unworkable.

[184]Given the legal test for implication of the first term had not been met, the second term would not make sense. The insurance policy the employer had secured was a matter for it. It could naturally change its insurance at any time but that would not affect the claimant’s entitlement as set out in her contract. The contract as interpreted above does not produce an absurd result. It is entirely workable. While not common, such a position is not unique as the case law shows, where employers have been found to have agreed to provide the benefits of permanent health insurance directly (notwithstanding their insurance arrangement with an insurance company). In this case there was no evidence that showed what the specific scheme the respondent said was in place actually was.

[185]The third term which the respondent’s agent argued should be implied into the contract of employment was that receipt of the benefit would be subject to the claimant and the respondent cooperating with each other to give effect to the terms of the contract and that neither party would do anything which would inhibit the other from being able to perform the contract. It was submitted that such a term was necessary to give business efficacy to the contract and/or is so obvious that it goes without saying. It was so essential for the benefit to effectively function that it was obviously intended to apply.

[186]Again as the contract the employer and employee agreed was such that the employee’s entitlement was as set out in the contract, any insurance policy the employer had was for its own benefit and could not reasonably be regarded as limiting an employee’s entitlement to the sums set out (provided the conditions set out had been satisfied). The Tribunal did not consider it relevant to look at what other PHI schemes on the market provided or what the respondent’s witness (who was not familiar with what the claimant had been given in terms of her contract as she had joined many years later). It is necessary to imply a term, as in most contracts, that the parties would reasonably cooperate with each other to ensure a contract can work and its terms are given effect. There was no agreement an employee’s entitlement to the benefit in this case would be subject to anything the employer had agreed with another party and it was not necessary nor right to imply such a term.

[187]The fourth term which the respondent’s agent argued should be implied was that receipt of the benefit would be subject to the claimant completing appropriate paperwork in order that her eligibility for receipt of the benefit could be assessed. It was submitted that such a term was necessary to give business efficacy to the contract and/or is so obvious that it goes without saying. It is self-evident that in order to access a benefit provided under an insurance-backed scheme, an employee would need to provide the details requested of them. The claimant has failed to provide any coherent or logical reason as to why that should not be required. The benefit would be unable to function, as only the employee is in a position to provide accurate, up to date and complete personal details or information about their health.

[188]While some schemes, particularly those which are governed by the terms and conditions of an insurance policy, may require paperwork to be completed, it cannot be said that such a term is necessary to give this contract business efficacy given the wording used. If evidence is provided that satisfied the express conditions that required to be satisfied and there is no express requirement to provide anything further, no further documents would be needed. The express terms make it clear that sums are paid out where there is absence after a specified time following “a continuing period of incapacity”. That is a matter of fact to be established. Appropriate evidence or paperwork could, potentially, be fit notes. In this case the respondent did not seek any further evidence to satisfy itself of the position set out in the contract. The respondent did not challenge the claimant was incapable of work and had been for the relevant period. Their focus was to satisfy another insurer as to the position, a matter not relevant for the entitlement in this case.

[189]The fifth term the respondent’s agent argued was to be implied was that receipt of the benefit would be contingent on sufficient medical evidence, including but not limited to the claimant undergoing a medical assessment by an independent third party, to demonstrate permanent incapacity for work. It was submitted that such a term is necessary to give business efficacy to the contract and/or is so obvious that it goes without saying. As a matter of public policy and the prevention of insurance fraud it has to be ascertainable that the insured against event (in this case long term incapacity to work) has in fact occurred. The only way this can be achieved is by providing satisfactory evidence demonstrating that is the case. The benefit would be unworkable otherwise.

[190]The fifth term was similar to the fourth and for the reasons stated it is not necessary to imply this condition. The employer set out the position clearly – if the employee is incapable of working and is absent for at least 26 weeks, the entitlement arises. There are no conditions attached to this and it is not necessary to attach any conditions. The legal test is not satisfied to imply this term.

[191]The case law in this area is fact sensitive and as the parties’ rightly submitted each case must be considered on its own facts. It is correct, as the respondent’s agent submitted that Villella, Awan and Amdocs involved employees who were in receipt of the PHI benefit/payment such that the dispute centred on what - if any - right the employer had to stop the payments/deviate from the underlying policy terms. This is not the case in these proceedings (no entitlement to payments ever having been crystalised). Nevertheless those cases do provide insight as to the contractual position in light of their specific facts, which in material respects are on all fours with the current case.

[192]The respondent’s agent is correct to note that there is an exercise which must be conducted at the interpretation stage to decide whether the contractual entitlement in question relates to access to a benefit (insurance) or a direct payment from their employer. Applying the law as set out in the cases to the facts of this case, this case clearly falls into the latter category. That is reached when viewed the words the parties used and the context in which they appear, applying commercial common sense. What were the express and implied terms which applied to the contractual entitlement and what eligibility criteria/conditions needed to be satisfied before payment would be due to the claimant?

[193]The next issue was what the eligibility conditions were that required to be satisfied from the contract to entitle the claimant to payment.

[194]The claimant’s agent argued that in order to be a member of the scheme, the claimant needed to meet the conditions set out in the first bullet point in the benefit document. In order to be entitled to payments, the claimant needed to meet the conditions set out in the third bullet point (a continuous period of incapacity of at least 26 weeks). She had satisfied each condition.

[195]The respondent’s agent argued that if their interpretation of the relevant terms of the contract is accepted (in either sense), it falls to be considered what participation in the scheme looks like in order for the claimant to access the benefit, and therefore the wages sought. This involves an assessment of whether the terms the respondent says should be implied were satisfied.

[196]The respondent’s agent argued it was necessary to imply terms into the contract. These are considered below. The respondent’s agent argued that the clear and unambiguous terms of the correspondence shows that the implied terms were not met. Ms McGlone gave the claimant the opportunity to pursue a claim under the AXA scheme. The claimant did not provide confirmation i that she wished to pursue a claim, nor did she complete the relevant forms. At the very minimum, an application form was required to be completed. Accordingly, no claim could proceed in respect of the claimant as she did not do so. The respondent did not, at any point, receive payment from any PHI insurance provider in respect of the claimant.

[197]It was stated that (although no evidence was led on the point) the historic scheme with Royal and Sun Alliance had ceased to exist prior to AXA’s acquisition of the shares of the respondent’s parent company. Canada Life was the insurance provider in place from 2008 onwards. The deadline for making a claim to Canada Life in respect of the claimant’s absence was missed – no successful claim was made. The respondent honoured its obligation to provide the claimant with eligibility to access a PHI scheme by offering her the chance to participate in the self-insured scheme provided by the AXA Scheme. This policy had the same level of cover as the Canada Life Policy, and the respondent reassured the claimant that she would receive 75% (not 50%) of salary.

[198]The respondent’s agent noted the claimant accepted that she was required to provide evidence of her incapacity to work in order to access any payments from the respondent. The claimant accepted in cross examination that she did not provide any medical evidence confirming her incapacity to work to Ms McGlone, save for the fitnotes she received from her GP. Nowhere in the express terms is this stated to be sufficient for PHI purposes. It was submitted that plainly something more than fit-notes would be required to release a permanent health insurance benefit.

[199]The very name of the benefit used throughout the documentation, permanent health insurance, also supports the respondent’s position. The word “permanent” indicates something enduring. It is an agreed fact that the fitnotes the claimant supplied covered varying periods of time between two and eight weeks. They always had an end date, and the claimant accepted in evidence that none of the fitnotes she provided gave details of her having a permanent incapacity to work.

[200]The claimant had produced a medical report from December 2012 which was not made available to the respondent at the time. The respondent does not accept that it or its representatives were provided with the 2012 Report prior to the claimant raising these proceedings. In any event the focus must be on what was evidenced at the time not the 2012 report or a report provided subsequently.

[201]The respondent’s agent argued that even if the PHI benefit was not backed by an insurance policy, the employer would need to be satisfied about the employee’s health and their capacity to work. The claimant’s own evidence was that she was aware she was required to evidence her incapacity to work. The claimant failed to satisfy the express condition that she was incapable of working. The evidence provided was insufficient. It was implied within those terms that the claimant would provide evidence of her incapacity to work to the satisfaction of her employer.

[202]If the respondent’s interpretation of the relevant contractual documents is accepted, it was submitted that the claimant failed to address the necessary steps to participate in the scheme, and thereby to satisfy the conditions triggering payment. Decision on contractual terms

[203]The claimant’s agent argued that there was no need to rely upon any implied terms as the contract could be given effect from the express terms. The respondent’s agent argued a number of terms should be implied and these are considered in turn.

[204]The first term the respondent’s agent said should be implied was “receipt of the benefit would be subject to the terms of the relevant insurance scheme/policy (which would inevitably contain terms relating to level of cover, duration of cover, payment levels and mechanism for application and assessment of eligibility)”. It was argued that this should be implied regardless of which insurer was providing the benefit, since, as a minimum, there would be a process involving the claimant’s participation. The process to be followed under PHI schemes was clear and had not been followed.

[205]The difficulty with this argument is that the express terms used by the respondent in creating the contract were clear. This was not an agreement that was to provide an insurance policy (such as in Smith) and thereby was reasonably found to have been intended to be subject to the terms of the insurance policy. As in Awan and Amdocs, there was no express term that the agreement between employer and employee was to be subject to the terms agreed between the employer and an insurance policy. It was open to the employer to have expressly stated this and as noted by Simler P at paragraph 38. Auerbach J made the position clear in Amdocs stating that to be subject to an insurance policy the position needs to be unambiguously and/or expressly communicated. That is not the case here.

[206]In any event the Tribunal did not consider that the legal tests for the implication of the terms sought were satisfied. It is not obvious that such a term should be implied. It is not necessary to imply the term to give the contract business efficacy. There is no custom or practice either that such a term should be implied, given the express terms in this case. The fact other PHI providers may operate their schemes in a particular way does not assist in construction of this particular contract.

[207]The second term the respondent’s agent argued should be implied was “receipt of the benefit would be subject to the claimant and the respondent cooperating with each other to give effect to the terms of the contract/one party does not do anything which would inhibit the other from being able to perform the contract.” This term is unexceptional and is implied into the contract between the parties. The parties would require to work together to ensure the contract is effective. That works both ways. If the employee provides the evidence which satisfies the express conditions, the employer would be expected to provide that which is due.

[208]The third term was “receipt of the benefit would be subject to the claimant completing appropriate paperwork in order that her eligibility for receipt of the benefit could be assessed.” In order to imply terms, the term requires to be clear and precise. “appropriate paperwork” is entirely unspecific. In order to give the contract in this case effect it would be necessary for the claimant to establish “a continuous period of incapacity” for the relevant period. It is not necessary (nor relevant) to require the claimant to provide anything other than this. Such a term does not satisfy the legal tests for implication.

[209]The fourth term was “receipt of the benefit would be contingent on sufficient medical evidence, including but not limited to the claimant undergoing a medical assessment by an independent third party, to demonstrate permanent incapacity for work.” The express terms of the contract required the employer to pay the relevant sums following a “continuous period of incapacity of 26 weeks”. At no point was there communication to the employee of there being any requirement to provide specific evidence of this (such as via an independent third party). Applying the ordinary natural meaning of the words and to give the contract commercial sense the implied obligation was to provide the employer with medical evidence that established incapacity for the relevant period of time.

[210]The respondent’s agent argues that the claimant failed to engage with regard to a claim under the AXA scheme. The claimant did not provide confirmation in writing that she wished to pursue a claim under that scheme, nor did she complete the relevant forms provided to her. However, the claimant was absent from work due to illness and had been for a lengthy period of time. The claimant had made it clear that she wished the entitlement set out in her contract to be respected.

[211]Regrettably the respondent did not fully engage with the claimant with regard to what her contract said. The claimant’s contract with the respondent was to the benefit set out, not to the benefit under another scheme. It is equally regrettable that the claimant did not provide to the respondent the benefits document that supported her position clearly. No evidence was provided to the Tribunal from the individuals who issued the documents are the time and accordingly the respondent was unable to challenge the claimant’s position.

[212]The respondent’s agent notes that it is the claimant’s position that the fitnotes she supplied were sufficient evidence of her incapacity to work. The fitnotes she supplied were not challenged by the respondent. At no stage had the respondent argued the evidence the claimant provided had not established that the claimant was incapable of work. While the fit notes have a start date and end date, there was no suggestion that the impairment from which the claimant suffered was not accurate. The express wording did not require evidence to be provided of permanent incapacity. The contract required the payment to be made where there was “long term absence as a result of incapacity to work”. That is expressly what the contract says. There is therefore no requirement to provide any evidence of permanent incapacity or inability provided the employee satisfies the employer that they are absent for the requisite period by reason of incapacity. There is no reason why fit notes from a GP could not satisfy this condition (particularly in the absence of any other conditions that required to be satisfied before payment was to be made).

[213]The respondent’s agent argued that something more than fitnotes would be required to release a permanent health insurance benefit and that it is wellestablished and accepted that this is the case not least because the very name of the benefit used throughout the documentation, permanent health insurance, also supports the respondent’s position. The word “permanent” indicated something enduring. It is an agreed fact that the fitnotes the claimant supplied covered varying periods of time between two and eight weeks. They always had an end date, and the claimant accepted in evidence that none of the fitnotes she provided gave details of her having a permanent incapacity to work.

[214]It was, however, accepted that permanent health insurance can cover periods of temporary absence. The issue in this case is not what other contract arrangements or scheme provide but what the claimant and respondent agreed to in terms of their contractual arrangement. There was no requirement to provide a specific type of evidence, provided the claimant had established that she was incapable of working for at least 26 weeks. The reference to “permanent” in permanent health insurance refers therefore to absence beyond 26 weeks. It refers to absence that has no end date in the sense of being finite or temporary. There was no evidence in this case that the claimant’s absence was temporary or finite. The respondent did not challenge the evidence the claimant provided to establish her absence. There was no suggestion at all that the claimant’s absence was not genuine nor that she was incapable of working for the relevant period.

[215]A medical report had been obtained by the claimant in 2012. The respondent had not seen this (although they knew of its existence). In terms of the contractual position, such a report was not necessary. The claimant had established that she was incapable of work and had been absent for the requisite period. The medical reports that were provided to the Tribunal were not provided to the respondent at the time and were not relevant to its assessment of the claimant at the time. The only issue is whether the claimant had satisfied the conditions within the contract that required to be satisfied before payment could be made, from the information available at the time. It is self evident that the claimant had done so.

[216]The respondent’s agent argued that even if such a PHI benefit was not backed by an insurance policy, the employer would evidently need to be satisfied about the employee’s health and their capacity to work and the claimant had not done so.

[217]The difficulty with this argument is that at no stage did the respondent advise the claimant the evidence she provided did not establish that she was incapable of work. The evidence patently showed she had done so (and the facts were not in dispute). The purpose of the respondent asking the claimant to attend a third party occupational health provider was to determine entitlement under another PHI scheme. At no point was there any evidence from the respondent that the evidence she provided did not satisfy the respondent that she was incapable of work for the requisite period or that the information she had provided had not satisfied the conditions that were set out in her contract. She had complied with those conditions.

[218]The other PHI schemes which were offered to the claimant were inferior in terms to the clear and unambiguous entitlement set out in the claimant’s contract. She was under no contractual obligation to accede to the requests to proceed with a lesser benefit than that to which she was contractually entitled.

[219]It was not therefore necessary to imply any terms into the agreement reached, which could be determined from the express terms agreed between the parties. Did the claimant satisfy all the criteria/conditions which the Tribunal determines applied in the circumstances such that the right to payments under the relevant benefit was triggered and as such were the wages sought properly payable for the purposes of section 13(3) of the Employment Rights Act 1996?

[220]The third issue in this case was whether the conditions precedent for payment were satisfied.

[221]The claimant’s agent argued that the claimant met all of the conditions, having done what was required of her to obtain details of the scheme (contact the Director of Human Resources), and having met all of the conditions, the claimant was a member of the scheme from July 2000. This meant that the claimant was entitled to PHI payments if she was absent from work due to incapacity for a continuous period of at least 26 weeks. The claimant’s agent noted that no evidence was led as to what the Royal and Sun Alliance scheme would have required even if that policy was implied into the claimant’s contract and so the respondent is not entitled to rely upon any Royal and Sun Alliance policies and procedures (or indeed any other policies and procedures) with regard to evidence of incapacity. It was not in dispute that the claimant was signed as unfit for work continuously for three years from September 2010 to dismissal. There is no suggestion she was anything other than unfit for work. She therefore met the conditions for payment under the scheme and as such, the PHI payments were “properly payable”.

[222]The respondent’s agent argued that the conditions relating to PHI benefit had not been satisfied and no entitlement to PHI benefit crystalised. No claim to any insurer was successfully made on behalf of the claimant. No payments from any insurer were ever received in respect of the claimant’s absence. No entitlement to payments under any PHI was triggered in the circumstances, despite the respondent’s attempts to facilitate that, and so no payments were payable. Accordingly, no unauthorised deduction was made from the claimant’s wages by the respondent and the claim should be dismissed.

[223]The Tribunal finds that the claimant’s agent’s submissions have merit and are upheld. The claimant satisfied the express terms of the contract between the parties. The fact the claimant did not satisfy the conditions pertaining to a different entitlement did not affect her position with regard to what she had agreed with the respondent at the material time. The respondent did not engage with her position during her employment and expressly consider what had been expressly agreed.

[224]The offer letter and handbook set out the contractual entitlement, further details of which would be given to the claimant. She obtained those further details and there was no reference to any insurance policy governing the claimant and respondent’s position nor was it reasonable to infer such a position. The information communicated to the claimant once she was eligible to join the scheme was evidence of the contractual position (as in Amdocs). Ms McGlone had not seen the benefits document and it was not suggested this document had not been issued by the respondent. In any event the Tribunal found it had been sent and did provide the further information pursuant to that set out in the offer letter and handbook.

[225]There was no suggestion at the point the claimant had been absent for at least 26 weeks due to incapacity that she required to provide specific evidence, such as via an occupational health specialist. The claimant provided evidence from a medical specialist (her GP). The respondent did not state that the evidence she provided, for the purposes of her contractual entitlement, was insufficient. At no stage did the respondent consider that position. The focus of the respondent was with regard to the claimant’s application under another scheme (which Ms McGlone wished to provide the claimant, believing it was a reasonable alternative to the scheme that had previously existed, but without fully understanding what the claimant’s contractual entitlement actually provided). As the claimant did not engage with the alternative schemes being offered, the respondent took no action.

[226]The respondent failed to consider what had been agreed in terms of the contractual position. There was no evidence to suggest the information the claimant had been given was incorrect or that the benefit document was expressly subject to a third party requirement. As in Villella the insurance policy and its terms were not communicated to the claimant. There was some uncertainty as to the applicable terms but as set out in Jowitt it was possible, using the rules of contractual construction, to give commercial effect to the bargain the parties struck. It is not the function of contractual interpretation to make the agreement the parties reached more or less favourable that what focussing on the meaning of the words used within context applying their natural and ordinary meaning in context with commercial commence sense was intended.

[227]The express terms of the entitlement were clear. The offer letter confirmed the claimant was entitled to “The Sun Alliance Permanent Health Insurance Scheme” with details to be advised. The contractual handbook noted the scheme pays a proportion of “salary“ if the individual is unable to work due to incapacity after a certain period of absence. The benefits of the scheme (which the employer receives) were underwritten by an insurance scheme but there was no term that the employee’s entitlement was in any way subject to the employer’s agreement with the insurer. The handbook stated further details would be given.

[228]Further details were then given to the claimant in the benefits document confirming that a proportion of “normal earnings” would be paid to the employer following a period of incapacity. Contributions were paid by the employer (but as in Awan that did not mean the employee was thereby subject to any third party agreement). The further details were good evidence of the contractual entitlement, given the entitlement related to remuneration (as set out in Amdocs). At no stage did the respondent advise the claimant her entitlement was limited in any other way. Clearly if the employer gave further details by making it clear that the policy was subject to the terms of an insurance policy (providing such terms) the position would be different but at no stage was there any suggestion the entitlement was in any way restricted to anything beyond what was in the documents given to the claimant.

[229]On the facts of this case the claimant satisfied all the express terms of the contract. At no stage did the respondent request further information to satisfy themselves she was incapable of work. The respondent accepted her fit notes. While they sought independent evidence in respect of an application to another PHI scheme, there was no suggestion that the claimant had failed to provide evidence that she was incapable of work and had been following a continuous period of incapacity of at least 26 weeks. If there had been an unauthorised deduction of wages how should be deduction be calculated, given the parties disputed what “wages” amounted to for the 12 months from May 2011 to May 2012 and the 12 months from June 2012 to May 2013. The claimant argued salary should include monthly overtime and that in respect of year 2 a 5% increase should be applied.

[230]The final issue in this case was what sums should be awarded in the event the claimant was successful. The parties had agreed upon basic salary but disputed what “normal earnings” meant and whether the claimant was entitled to an escalator.

[231]The claimant argued that overtime is part of “normal earnings” and any ambiguity in the scheme should be construed in the claimant’s favour. While the claimant was unable to provide precise figures an attempt had been made to calculate the sums reasonably and it was submitted that should be relied upon.

[232]The respondent’s agent argued that if the Tribunal determined that there had been an unauthorised deduction t the sum should be calculated on the following basis to cover the agreed period of deductions (May 2011 to May 2013 – 24 months): 75% of the claimant’s gross base monthly salary as at the start of the period of the deductions, in respect of the first twelve months; and use the same calculation for the second twelve months, but apply a 5% uplift to the claimant’s gross base monthly salary.

[233]In respect of both years, a deduction was to be made to account for any state benefit the claimant received during the period of deduction (which information the claimant had still to provide).

[234]The claimant asserted that her monthly salary for the purposes of the calculation should also include an element to account for overtime payments she received. It was understood that the basis for that assertion was a single reference to “normal earnings” in the benefits document. The respondent submitted that the correct interpretation does not support the claimant’s assertion. The amount of payment is not referred to in any way in the offer Letter, and the handbook only makes reference to “salary”. If the Tribunal determined that the benefit document formed part of the contract, it was submitted that it cannot be interpreted as the claimant contends. The benefit document states that the benefit is “paid monthly in the form of salary” and “benefit is 1/12 of ¾’s of the individuals scheme salary less state benefit”.

[235]Ms McGlone had provided evidence that it is the norm for payments under a permanent health insurance scheme to only cover base salary and not variable elements of pay. Furthermore, it is submitted that the claimant has not provided the Tribunal with sufficient evidence to support an assertion that overtime payments were part of her “normal earnings”.

[236]The respondent submitted that when the documents are assessed as a whole, it is clear that what was provided for was a proportion of the claimant’s gross base salary only. The claimant’s analysis does not reflect the ordinary meaning of the applicable terms, nor accord with a common sense understanding of this benefit.

[237]It was also the claimant’s assertion that the 5% uplift which is applied to the benefit in the second twelve month period, should be applied not to what was paid in the first twelve month period, but applied to what the claimant’s salary (including overtime) would have been at the start of the second twelve month period, taking account of any uplift in pay that may have applied in the meantime. It is unclear on what basis such an assertion is made. The respondent submits that such an approach is not provided for by the terms of the contract. The amount of payment is not referred to in the offer letter, and the handbook only makes reference to “salary”. The only increase provided for is the annual increase of 5%, nothing further.

[238]It was agreed that the claimant’s gross base salary increased in April 2012, in line with the respondent’s usual salary increase practices. That increase equated to an uplift of around 3%. If this were to be used to calculate the wages in the second twelve month period, as well as the 5% uplift provided for in the contract, the claimant would receive a windfall as she would in fact receive an increase of 8%.

[239]The respondent submitted that when the documents are assessed as a whole, that was not was being provided for and that only the 5% increase should be applied to the wages the claimant received in the first twelve month period. Decision on sums due

[240]The Tribunal concluded that the claimant had satisfied the conditions set out in the contract, properly construed, that triggered an entitlement to payment. As was the case in Jowitt, the express terms did not unambiguously deal with each of the issues and as a result the Tribunal requires to determine what the parties intended with regard to the entitlement. The Tribunal applied the rules as to contractual construction to assess what was properly payable to the claimant.

[241]The entitlement is to a proportion of “normal earnings”. That is what the scheme sets out as the basis upon which the payment is calculated (and must be the “individuals scheme salary” set out later in the document). The issue is therefore what “normal earnings” means, with reference to her salary and the position as understood when the contract was entered into.

[242]Focussing upon the ordinary and natural meaning of the phrase, the entitlement was to the claimant’s normal earnings, what she would normally earn when working for the respondent in terms of her contract. There is no suggestion that the entitlement was based upon an average of the sums the claimant would receive where her earnings would fluctuate or if she would earn more money by working hours in addition to her normal hours. A normal and common sense interpretation of normal earnings within the context of the position the parties found themselves applying commercial common sense is the sum to which she is guaranteed under her contract since that is the sum she would normally earn. The intention of the scheme was to provide employees with an income when they could not work. The scheme would replace the normal earnings, the sums to which the employee would be guaranteed if able to work, the normal rate of pay in terms of the contract.

[243]In this case the claimant was contracted to work normal hours and could be asked to work more, namely weekends for which she would be paid more money but those additional sums are not guaranteed and could fluctuate. Those sums are not normal earnings. The contract stated that the claimant “may be requested” to work weekends – it was not guaranteed nor a contractual requirement that she accede to such a request, albeit the claimant chose to do so. There is no ambiguity and so there is no need to refer to the rules of construction when interpreting an ambiguous phrase. The ordinary and natural meaning of the term within context, applying common sense, is clear.

[244]The offer letter refers to “normal hours” and the payment referable to that. She may be asked to work weekends and the respondent had not challenged the evidence that the claimant did work (and believed she was required to work) one weekend in four which were in addition to her normal hours.

[245]In the ET1 the claimant prepared herself stated that her “normal take home pay” was that based on her normal hours, namely the fixed weekly hours (not including any weekend work). The claimant did not consider the sums she received for working the additional weekends to be normal pay.

[246]The entitlement is therefore based upon the claimant’s normal earnings for the period in question, the sum she would contractually have been paid had she worked her normal hours as set out in the contract. The respondent’s agent’s submissions in this regard have merit. As the respondent also noted, there is no evidence to find what her entitlement actually was for the full period. The earnings the claimant received in addition to her normal pay had not been established. The time that had passed was such that there was no clear evidence as to exactly what overtime the claimant had worked and what the rate was. Although the claimant said she was asked to work and agreed to work one weekend in four, the position, for example, during holidays was not clear or whether she actually worked every weekend in four. There was no evidence as to what, if any, increase applied to the position in the second year claimed. While the claimant’s agent reasonably tried to estimate the position and provide his view as to the figures, had normal pay included overtime, there was no clear evidence before the Tribunal that would have allowed a calculation of such an entitlement to be made for the full period given the passage of time. It was not clear, for example, that as a matter of fact the claimant did work one weekend in four for the entire period.

[247]The entitlement, as set out in the benefits document, is increased by 5% on each anniversary of commencement of payment for as long as the benefit continues to be payable. That is what the claimant’s employer told her she was due when they provided additional details of the scheme (which they were required to do in terms of the offer letter and Handbook). As in Amdocs, the entitlement to an increase is a contractual right, there being no suggestion such an increase is discretionary or subject to any conditions and applying the rules of construction. The 5% increase was, however, to the initial sum when the entitlement was triggered – the scheme salary. That is the normal and natural meaning of the words used.

[248]There was no suggestion the entitlement increased both by any wage increase to the normal scheme salary and by 5%. To provide the claimant with a 5% increase to any normally increased salary would be to confer upon the claimant a windfall and would not be consistent with the normal and ordinary meaning of the words taken in context, applying commercial common sense.

[249]A normal interpretation is that the entitlement is based upon the salary the claimant normally earned when carrying out her normal duties. In this case she was entitled to £1,191.75 per month (her normal salary), less state benefit. The 5% increase is applied to that sum – her normal salary (the scheme salary).

[250]For the period from 28 April 2012 until 27 May 2013 she was entitled to 75% of £1191.75 plus 5% (£59.59), namely £1251.34 per month, less state benefits received.

[251]The entitlement is expressly stated to be “less State Benefit”. The precise sums had not been provided. The claimant stated that she had received statutory sick pay for “around 6 months” and received “around £80 per week”.

[252]The parties are required to work together in light of the foregoing to agree the sums payable to the claimant and resolve same. In the absence of a resolution within 42 days, an order can be issued requiring the claimant to set out (and evidence) the position in respect of benefits claimed during the period in question to allow the final sum to be identified (which failing a further hearing can be fixed to enable the precise sums due to be calculated). It is in the interests of justice to provide the parties with time to finalise this matter. The parties had worked together and there is no evidence that the parties could not cooperate to determine this outstanding issue.

[253]The claim in respect of unlawful deduction of wages therefore succeeds.

[254]By way of final observation, the Tribunal wishes to thank both parties for their professionalism in the conduct of this case.

Background

[1]By judgment dated 28 July 2022 the Tribunal found that the claimant’s claim succeeded and found that the respondent had made an unauthorised deduction from the claimant’s contract of employment. That followed a 5 day hearing with 3 days of deliberation.

[2]By email dated 26 August 2022 the claimant’s agent made an application in terms of rule 77 for expenses. The application was resisted. Both parties made written submissions and consented to the matter being determined in chambers without further submissions being required. Factual background

[3]By ET1 presented on 25 June 2013 the claimant sought payment of wages or salary from 28 May 2011 to the date of the claim. In its ET3 dated 26 July 2013 the respondent disputed the claims arguing, that the claimant was not entitled to the sums claimed.

[4]The case has a significant procedural history evidenced by the dates of the acts in question. At the Hearing the claimant presented her position in light of what she understood it to be (and in light of the documents she said she had received) and the respondent presented its response, seeking to challenge the claimant where appropriate, setting out its position.

[5]The Tribunal carefully analysed the evidence that had been presented, considered the applicable law (noting that one of the key decisions relied upon by the parties had been heard by the Court of Appeal albeit with no decision issued at the time) and made its determination.

[6]The Tribunal did not find the legal position to be straightforward evidenced by the time required to consider the legal position, with the legal position having been recently upheld by the Court of Appeal.

[7]References in this judgment are to paragraph numbers of the Tribunal’s decision. Claimant’s application

[8]The claimant’s agent made the application in terms of rule 76(1)(b) and rule 76(1)(a), arguing that the response had no reasonable prospect of success and the conduct of the proceedings by the respondent had been unreasonable. It was argued that throughout the proceedings, from the point of the submission of the ET3 onwards, the respondent failed to engage with the claim which had been brought. The respondent failed to refer to the documents relied upon by the claimant and dropped one of two defences as the case proceeded. It was argued that the respondent relied upon a different basis to that which had been raised (referring to a different scheme). The respondent relied upon implied terms which was not referred to in the ET3.

[9]It was said that the Tribunal found there was no requirement for the claimant to agree to inferior terms, which were offered to her many years after her employment commenced, after her absence commenced and after she was already entitled to payments under her contract and therefore the response had no reasonable prospect of being successful, and by continuing to defend the claim the respondent acted unreasonably.

[10]The claimant’s agent argued that the response had no reasonable prospects of success when it was submitted, and that either the respondent must have known that was the case or ought to have known. This was because the respondent did not engage with what the claimant said and made no reference to her contractual documents in its response and there was well established case law which supported the claimant’s position. The respondent has been legally represented and ought to have known the position. The respondent’s defence (and claimant’s response)

[11]The respondent disputed the application arguing that parties had agreed the issues to be determined by the Tribunal, which involved an intricate interpretation of the contractual matrix at play (evidenced by the lengthy judgment). The outcome was not a fait accompli. On the contrary, there were a number of arguments advanced by the respondent which were not only statable but were indeed supported by relevant case law. The fact the Tribunal’s analysis of the contractual position was, ultimately, favourable to the claimant, it was argued is not indicative of the respondent’s case having no prospects of success and at no stage during the judgment is there anything to support such a categorisation.

[12]The claimant’s agent maintains that the respondent had not engaged with the claimant’s case, which had been set out in her ET1 which expressly referred to her contractual entitlement under the ICAS Scheme. The claimant’s agent noted that at paragraph 211 of the judgment it is noted that the respondent did not fully engage with the claimant with regard to what her contract said. This was reiterated at the last sentence of paragraph 223 and the first sentence of paragraph 226. The respondent did not engage with the claimant’s case, even after she had submitted her claim.

[13]The claimant’s agent noted that the Tribunal noted the claimant did not provide the benefits document to the respondent (and fully set out what she believed her position to be), but the ET1 referred to the position and the respondent did not engage with this. Had the respondent done so, it was argued the respondent would have recognised by reading their own contractual documents given to the claimant that, in fact, the claimant had a “clear and unambiguous entitlement” (paragraph 218 of the judgment).

[14]It was argued that the fact the respondent was relying upon implied terms was indicative of the fact that the defence in the ET3 could not reasonably be supported (given the ET3 was primarily framed around the application of the AXA Scheme).

[15]The claimant’s agent argued the comments by the Tribunal and the length of the judgment are of no relevance to the issue to be determined now, which is whether the response had no reasonable prospect of being successful and whether it was unreasonable to maintain the defence throughout the proceedings. He submitted this issue should be considered primarily with reference to the terms of the ET3, and the lack of engagement with the claimant’s case as set out in the ET1.

[16]The respondent’s agent argued case law referred to was relevant and the case was arguable. Costs do not follow success in the Tribunal except in exceptional circumstances. These are not exceptional circumstances. These are circumstances where some 20 years after a contract being entered into, the respondent produced the best evidence it had to support its defence and, in keeping with the overriding objective, made comprehensive and reasoned submissions to the Tribunal on what it considered to be the correct legal analysis. The onus was on the claimant, not the respondent.

[17]The claimant’s agent argued that the relevant case law was not referred to by the respondent in its written submissions and the respondent did not have regard to case law which is directly relevant to the issues which the Tribunal had to determine, which, it was submitted, supported the underlying point that the respondent simply did not engage with the claimant’s case. The respondent’s defence essentially relied upon the claimant not having agreed to apply to join the AXA Scheme (which she had no requirement to do and which was an inferior scheme). The claimant’s case was straightforward: she had a contractual entitlement and the respondent failed to provide the sums to which the claimant was entitled. The respondent’s witness, Mrs McGlone, confirmed that she had never seen the relevant contractual document, i.e. terms of the ICAS Scheme, and yet the respondent’s defence relied heavily on the correspondence between Mrs McGlone and the claimant in terms of which the claimant was being invited to apply to join the AXA Scheme.

[18]The claimant’s agent submitted that had the respondent considered the claimant’s contractual documents at any point after the claim was raised, it would have been apparent that she was entitled by contract to be paid the wages sought and there was no contractual requirement that she accept any other PHI scheme, including the inferior one argued for in the respondent’s defence.

[19]The respondent’s agent argued that the case law was complex, seen by the fact one of the cases was subject to a Court of Appeal hearing during the proceedings. There was a statable point of law to be determined at appellate level which supports the fact that the respondent was entitled to defend the case on the basis that it did and put the claimant to proof. It may be that the Court of Appeal’s decision in Amdocs is appealed further. Additionally, on the day of submissions, the case of Pelter was reported. This supported the respondent’s analysis, and further evidenced the fact that the law is far from settled. The respondent’s agent also noted that the claimant’s case was different to the cases relied on by the claimant’s representative given that in all of those cases a right to payment had crystalised at the point of the dispute (that not being the case here).

[20]The claimant’s agent argued the cases are fact specific and the respondent’s approach again underlined the essence of the expenses application which was that the respondent did not engage with the claimant’s case, being that the respondent had provided the claimant with a written contractual entitlement for which the respondent itself was liable (not an insurer). While cases are always fact specific, that in itself does not mean that a response will always have reasonable prospects of being successful. It is important to consider the terms of the ET1 and the ET3 and consider, having regard to the facts, whether the response had no reasonable prospects of being successful. In this case, the respondent was relying on the AXA Scheme, and there was no reasonable prospect of the response being successful based on that line of argument.

[21]The respondent’s agent argued it was clear the respondent resisted the claim advanced. It was denied that there had been an unlawful deduction from wages. The ET3 includes pleadings that the wages sought were not properly payable. Case law is clear that the Tribunal will, where appropriate, need to undertake an analysis of the applicable contractual entitlements in such claims. The claimant had fair notice that the respondent disputed she had any entitlement to the payments she sought, and it is a matter for the respondent to decide what evidence it adduces to present its case. The respondent’s agent also argued they were entitled to refer to implied terms, absent any pleadings, given such terms form part of the contract.

[22]The claimant’s agent argued the ET3 failed to make any specific reference to the ICAS Scheme which was expressly referred to in the ET1, albeit the ET3 did refer to “the Canada Life Scheme, AXA Scheme or any other PHI scheme”. The ET3 defence was based on either an insurer being liable (a defence which was dropped), or wages not being “properly payable” on the basis that the respondent offered access to an alternative scheme with conditions not having being met by the claimant, but with no mention in the ET3 of the ICAS Scheme or the need for contractual interpretation. It was not until the point of submissions that the respondent proposed a number of implied terms. None of these terms had been mentioned previously and there was no notice given to the claimant of the intention to rely upon any of those implied terms.

[23]The claimant’s agent noted that the respondent’s witness had never even seen the ICAS Scheme document until the hearing and argued that had the respondent (and their witness) considered its own contract with the claimant, the need for a hearing, and all that it involved, may have been avoided. The enquiry should be into what was known when the ET3 was prepared, or what ought to have been known. It must have been known that the ET3 was not responding to the actual claim brought by the claimant.

[24]The respondent’s agent argued that the hurdle for establishing unreasonable conduct is, rightly so, extremely high and is not met in this case.

[25]The claimant’s argent argued the defence had no reasonable prospect of success from the outset, as it did not engage with the claim being put forward by the claimant and specifically did not address the contractual ICAS Scheme document which was expressly referred to in the ET1. Reliance was placed on the non-contractual AXA Scheme, in circumstances in which there was no reasonable basis to do so. The respondent entirely overlooked the claimant’s actual contractual position, notwithstanding that having been set out in the ET1. It is self-evident that the respondent either knew or ought to have known that was the case, by virtue of the fact that no mention was made in the ET3 of the terms of the ICAS Scheme.

[26]The claimant’s agent noted the Tribunal does not need to take an “all or nothing” approach. In the claimant’s case, the only defences put forward were those which were set out in the ET3. One of the defences was dropped, leaving the “central plank”, i.e. that the wages were not properly payable due to the conditions of the AXA Scheme (or the Canada Life Scheme or any other PHI Scheme) not being met. Nothing in this recognised even the existence of the ICAS scheme, being the one referred to in the ET1. This is the defence which the respondent continued to rely upon throughout the case, without having regard to their own contractual documents. Then, at the point of submissions, a new defence was introduced that specific terms should be implied into the contract. It was argued that the respondent acted unreasonably by maintaining the defence, notwithstanding the established case law, and only putting forward the proposed implied terms at the point of submissions. Respondent’s agent’s further comments

[27]The respondent subsequently responded noting the claimant’s representative acknowledged a key issue for the Tribunal to determine was whether the sums sought were properly payable. It was for the claimant to make her case out and the ET3 clearly gave the Tribunal and the claimant notice that her complaint was resisted. It was disputed it would have been obvious that the claimant would be successful if the ICAS scheme had been identified. The respondent’s agent noted there were a number of arguments relating to construction and interpretation of the ICAS scheme which were statable and supported by the case law to which the Tribunal was referred.

[28]The Tribunal had to conduct a careful analysis of the relevant contractual terms in light of the applicable law. While the ET3 does not use the words “implied terms”, it clearly sets out terms which the respondent says would need to be met before any entitlement crystalised. Furthermore (as acknowledged by the claimant), the ET3 makes it clear that the respondent denied that the payments sought were properly payable. The claimant was therefore on notice of the respondent’s position and that she was being put to proof on her complaint. It was entirely proper and reasonable that the respondent’s submissions included its position on all of the aspects of the contractual analysis the Tribunal would need to undertake. Having been put to proof, the claimant did not incur any additional expenses beyond those which she would have done so in the ordinary course of litigating her claim.

Relevant law

[29]Rule 76 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, Schedule 1, sets out when an expenses order may or shall be made.

[30]Rule 76(1) states that a Tribunal may make an expenses order and must consider whether to do so, where(a) it considers that a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or

(b) any claim or response had no reasonable prospects of success.

[31]Rule 74 states that in Scotland all references to costs should be read as references to expenses.

[32]Rule 78 sets out the provisions regarding the amount of the expenses order and Rule 84 states that a tribunal may have regard to the paying party’s ability to pay.

[33]The courts have emphasised when considering costs or expenses generally, that awards of costs or expenses are the exception and not the rule (Gee v Shell (UK) Ltd

2003 IRLR 82

CA). Further, the aim in making an order is to compensate the party which has incurred the expense in winning the case and not punishment of the losing party (McPherson v BNP Paribas

2004 IRLR 558

[34]The Tribunal in exercising its discretion must have regard to the nature, gravity and effect of any unreasonable conduct. That does not require the respondent to prove that specific unreasonable conduct by the claimant caused particular costs to be incurred (McPherson v BNP Parabis

2004 IRLR 558

CA) but any award of costs must, at least broadly, reflect the effect of the conduct in question (Barnsley Metropolitan Borough Council v Yerrakalva

2012 IRLR 78

CA).

[35]In Radia v Jeffries International Ltd

2020 IRLR 431

HHJ Auerbach issued the following guidance at [61] – [64]: “It is well-established that the first question for a Tribunal considering a costs application is whether the costs threshold is crossed, in the sense that at least one of rule 76(1)(a) or (b) is made out. If so, it does not automatically follow that a costs order will be made. Rather, this means that the Tribunal may make a costs order, and shall consider whether to do so. That is the second stage, and it involves the exercise by the Tribunal of a judicial discretion. If it decides in principle to make a costs order, the Tribunal must consider the amount in accordance with rule 78. Rule 84 provides that, in deciding both whether to make a costs order, and if so, in what amount, the Tribunal may have regard to ability to pay.”

[36]At the first stage, accordingly, it is sufficient if either rule 76(1)(a) (through at least one subroute) or rule 76(1)(b) is found to be fulfilled. There is an element of potential overlap between (a) and (b). The Tribunal may consider, in a given case, under (a), that a complainant acted unreasonably, in bringing, or continuing the proceedings, because they had no reasonable prospect of success, and that was something which they knew; but it may also conclude that the case crosses the threshold under (b) simply because the claims, in fact, in the Tribunal's view, had no reasonable prospect of success, even though the complainant did not realise it at the time. The test is an objective one, and therefore turns not on whether they thought they had a good case, but whether they actually did.

[37]In Barnsley v Yerravalva

2012 IRLR 78

Mummery LJ at paragraph 41 stated that: “The vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and ask whether there has been unreasonable conduct by the [party].. and in so doing identify the conduct, what was unreasonable about it and what effects it had.” This means that, in practice, where costs are sought both through the rule 76(1)(a) and the rule 76(1)(b) route, and the conduct said to be unreasonable under (a) is the bringing, or continuation, of claims which had no reasonable prospect of success, the key issues for overall consideration by the Tribunal will, in either case, likely be the same (though there may be other considerations, of course, in particular at the second stage). Did the complaints, in fact, have no reasonable prospect of success? If so, did the complainant in fact know or appreciate that? If not, ought they, reasonably, to have known or appreciated that?” Discussion and decision

[38]The Tribunal considered the submissions of both parties in light of the facts in this case, looking at the whole picture as to what happened.

[39]The claimant’s agent argued that the respondent’s defence had no reasonable prospects of success. It is argued that the respondent in proceeding with its defence of the claim acted unreasonably, essentially because, says the claimant’s agent, the response had no reasonable prospects of success. It is said that the respondent failed to engage with the claimant’s case and had they done so, it would have been clear that the claimant would succeed.

[40]The key question in this case which the Tribunal had to determine was whether or not the claimant was entitled to sums directly from the respondent or to be given access to an insurance benefit. While there is some uncertainty in both the ET1 and the ET3 as to the position, it is clear that the claimant argued she was entitled under her contract to sums from the respondent (by way of PHI entitlement) while the respondent disputes the claimant is entitled to the sums sought. In other words the key issue is what is properly payable in terms of the claimant’s contract. The central question was whether, upon a fair reading of the contractual matrix, there was no stateable defence to the assertion that the claimant was entitled to the sums sought from the respondent (as opposed to the right to be provided with an insurance benefit from the respondent).

[41]The Tribunal does not find that upon a fair analysis of the contractual matrix there was no reasonable prospect of successfully establishing that the claimant was not entitled to sums from the respondent but rather to the benefit of an insurance policy. There was a stateable defence and it was not a certainty that the claimant would succeed with her claim. The case law demonstrates each case is fact sensitive (and the present case differed from the established authorities – see paragraph 191).

[42]As submitted by the respondent there were a number of factors in this case which supported the interpretation relied upon by the respondent. The claimant herself enquired as to the position in respect of the insurance position (recognising that there was a policy of insurance in place – see paragraph 158). Of more relevance, however, was the fact that the contractual documentation referred to the “Sun Alliance Scheme” which itself paid the relevant sums. This could, in context, have referred to the Sun Alliance PHI scheme. In other words there was a stateable argument that from the words used by the parties, the claimant’s contractual entitlement was to an insurance policy (not to a sum from the respondent). There was some authority which potentially supported the respondent’s position in light of some of the words used. (see Anite Systems

2001 UKEAT 898

(paragraph 95) and Pelter

2022 EAT 105

(paragraph 122). This was not a case where the contractual matrix was such that the respondent’s defence was bound to fail. It was arguable.

[43]There clearly was an insurance policy in place (at some point) and the terms used in the contractual documentation were not unambiguous and clear. There was a degree of ambiguity which rendered the respondent’s argument stateable. While there was no direct reference to the terms and conditions of an insurance policy being relevant, (as now required by the authorities), the position was not free from doubt and the documentation referred to “Scheme salary” and there being some form of “eligibility” for entry to the scheme. In other words some of the language used by the respondent in creating the contract was redolent of (or at least suggestive of) an entitlement to an insurance policy or scheme rather than entitlement to a sum of money directly from the respondent.

[44]This was not a case where it ought properly to have been recognised (given the respondent had specialist legal advice) that the claim had merit and there was no reasonable defence, on the claimant’s case as pled. It was a matter that was legitimately resisted, requiring the matter to be determined judicially in light of the facts as found and applicable law. It was not so obvious such as to be unreasonable to defend the claim. Consideration of points made by the claimant’s agent

[45]The Tribunal considered each of the submissions relied upon in support of the application and did not uphold them. The claimant’s agent’s argument was essentially that the respondent had failed to properly engage with the claim as set out by the claimant. The claimant argues in her ET1 that in terms of her contractual position she is entitled to be paid sums directly from her employer. At the time of the ET1 being lodged there were a number of disputes, including the identity of the employer (and her ET1 was directed against a number of entities and included a number of averments around this issue and TUPE). The ET3 set out the background stating that (at paragraph 2.8) the claimant was entitled to benefit from permanent health insurance under the terms of her contract of employment. It was accepted that the claimant had a right to permanent health insurance but the dispute was what the terms of her contract were, and the precise basis for the benefit.

[46]The ET3 stated that the respondent understood the contractual basis for her 5 claim to be that the permanent health insurance was provided by Canada Life and then via another provider (upon similar terms). The respondent defended the claim on the basis that the sums claimed were not properly payable as there was no legal entitlement to the sums. In addition there were other contingent events that had not occurred. Reference was made to “the Canada Life Scheme, AXA Scheme or any other PHI Scheme”.

[47]The respondent in its pleadings therefore disputed that the claimant was entitled to the sums claimed and she was put to proof on that issue. Upon a fair reading of the respondent’s position they were disputing the claimant was entitled to be paid the sums she said she was due. They were saying that under whatever scheme the claimant relied upon (which included the scheme referred to by the claimant, namely (and impliedly) the ICAS scheme) the sums claimed were not due.

[48]The parties had focussed the issues by the time of the Hearing and it was clear that, as set out above, the key issue was whether the claimant’s entitlement was to sums directly from the respondent or to an insurance benefit. This was an arguable position and not so obvious that a reasonable litigant, advised by specialist employment lawyers, ought to have conceded.

[49]There is no doubt that the terms of the response could have been clearer. It is also true that the respondent also defended the claim on the basis that sums payable by an insurer were not wages, a position that was not progressed at the Hearing. But it cannot be said that the defence to the claim, that the sums sought by the claimant were not properly payable (because the conditions in the relevant scheme had not been met) was unreasonable to advance whether at the time of lodging the ET3 or subsequently. It was not unreasonable to require the claimant to establish her contractual entitlement given the prevailing circumstances, including the fact the claimant asserted the ICAS benefit was the applicable scheme (and the respondent’s belief, at the time, that the contractual benefit had developed).

[50]In an Employment Tribunal claim expenses are only awarded where the rules relating to expenses have been satisfied. Expenses are not automatically awarded to the successful party. This is not a Sheriff Court application. The Tribunal requires to apply the rules as set out above in light of the authorities and the surrounding facts looking at matters as a whole.

[51]There was no requirement for the claimant to agree to inferior terms, which were offered to her many years after her employment commenced, after her absence commenced and after she was already entitled to payments under her contract but that did not mean the defence to the claim, that the sums sought were not properly payable had no reasonable prospect of being successful, or that by continuing to defend the claim the respondent acted unreasonably. The central issue became whether the sums claimed were properly payable given the contractual matrix. That issue was not obvious or so certain. It is not uncommon for disputed issues in litigation to become acutely focussed (and often narrowed to singular issues) as matters progress. The key question, known to both parties prior to the Hearing, was what the claimant’s contractual entitlement was – as foreshadowed in the ET1 and ET3.

[52]The ET3 made it clear that it was disputed that the sums claimed were contractually due. Although the respondent failed in their defence, there was a reasonable argument that the sums claimed by the claimant were not properly payable as it was arguable for the reasons set out above that the claimant’s entitlement was to an insurance policy rather than sums from the respondent. The Tribunal does not consider that it was unreasonable to defend the claim or to continue to defend the claim, even once the position had become crystal clear as the case progressed.

[53]In other words even if the respondent had focused upon the ICAS scheme only (and not set out what their understanding was, namely that the claimant had been offered an alternative which they believed to be of not detriment to her) it could not be said that there was no reasonable prospects of defending the claim either when the response was lodged or upon progress of the litigation. There was a point that had to be tested and determined judicially, namely whether the claimant’s entitlement in terms of her contract was to a sum of money or to an insurance benefit. It was reasonable for the respondent to test that assertion on the basis of the evidence and applicable law.

[54]The ET3 made it clear the respondent did not accept the sum was due under her contract and therefore the claimant was put on notice she would be required to establish her contractual entitlement (subject to the usual rules of contractual interpretation). The fact such a significant period of time had elapsed and the fact the respondent’s witness had not seen the document relied upon by the claimant did not thereby result in there being no reasonable prospects of success of arguing the sums claimed were not properly payable (the central plank of the respondent’s case). It was not unreasonable for the respondent to have put the claimant to the expense of establishing her claim given the factual matrix in this case.

[55]The fact the Tribunal found that the claimant’s entitlement was “clear and unambiguous” did not mean the respondent’s defence was unreasonable since that arose from the Tribunal’s analysis of the contract. The respondent’s analysis of the contract differed and was not unreasonable on the facts in light of the legal framework, even if it was not ultimately a position the Tribunal preferred. The respondent’s defence failed but was not unreasonable. Even if a narrow interpretation of the ET3 was taken, the Tribunal would not have considered that it should award expenses in this case given the factual matrix and the uncertainty. It was not obvious that the claimant would succeed even if her case was taken at the highest given the nature of the contract.

[56]The Tribunal makes its assessment primarily with reference to the terms of the ET3 and looking at this case as a whole. The Tribunal did not accept the claimant’s agent’s argument that had the respondent considered the claimant’s contractual documents at any point after the claim was raised, it would have been apparent that she was entitled by contract to be paid the wages sought and there was no contractual requirement that she accept any other PHI scheme, including the inferior one argued for in the respondent’s defence. That was the conclusion of the Tribunal following its analysis of the facts applying the law but the respondent’s defence was arguable and one carefully considered by the Tribunal, but rejected.

[57]The Tribunal considered the terms of the ET1 and the ET3 and all the facts in assessing whether the response had no reasonable prospects of being successful. In this case, the respondent was relying on the argument the claimant’s contract did not support what she claimed.

[58]The Tribunal considered whether it was fair to interpret the respondent’s defence as being solely upon the AXA Scheme rather than more generally upon contractual entitlement. Given the passage of time and intervening events the respondent had focused upon the alternative schemes the claimant had been offered. That was their belief. That differed from the claimant’s position, whose focus was upon the ICAS scheme only. Even if the ET3 could only be read as arguing the AXA scheme was relevant and applicable to the claimant, that was not an unreasonable position to adopt. That represented what the respondent believed the contractual position to be. The respondent understood the claimant’s contractual position had moved on from the ICAS scheme. That argument failed on the facts but it represented what the respondent believed the contractual position to be. It was not unreasonable for them to have asserted that.

[59]A fair interpretation of the ET3 was that the respondent disputed the sums were due in terms of the claimant’s contract (as understood by the respondent). The claimant was on notice that she required to establish her contractual entitlement. Even with the benefit of legal advice, it was not unreasonable for the respondent to defend the claim on that basis given the facts. The Tribunal would require to assess the factual matrix and make a determination on the balance of probabilities. That assessment took place and favoured the claimant. The Tribunal does not consider the respondent’s approach in its defence to have been unreasonable.

[60]The Tribunal took into account that the ET3 failed to make any specific reference to the ICAS Scheme which was expressly referred to in the ET1, although as noted by the claimant’s agent the ET3 did refer to “the Canada Life Scheme, AXA Scheme or any other PHI scheme” (emphasis added). It was clear, from paragraph 2.8 of the ET3 that the issue was what the claimant’s contractual entitlement was. At paragraph 3.1 the respondent argued the deduction was not unlawful because an insurer was liable (a defence which was not progressed), or that wages were not “properly payable”. That passage made it clear that the respondent disputed there was a legal entitlement to the sums sought. That became the focus of the case and was a point that was arguable for both claimant and respondent. The parties understood the key issue in this case and what required to be established. The ET3 did respond to the claim the claimant raised and set out what the respondent understood their position to be and required the claimant to establish her claim.

[61]The Tribunal did not consider it axiomatic that had the respondent (and their witness) considered its own contract with the claimant, the need for a hearing, and all that it involved, may have been avoided. Looking at matters when the ET3 was prepared, or what ought to have been known, the respondent did not accept the sums claimed by the claimant were properly payable in light of the contractual matrix and that was arguable.

[62]The Tribunal does not accept that the defence had no reasonable prospect of success from the outset. The respondent focused upon its understanding of the factual position. While not specifically referring to the ICAS Scheme as set out by the claimant, the respondent disputed the sums claimed were due to be paid to the claimant by the respondent. There was a reasonable basis for their position. While their reliance on the AXA Scheme was found to be misplaced, it was not unreasonable for the respondent, even with the benefit of specialist legal advice, to do so. The position set out by the claimant was considered and the respondent provided their response.

[63]The Tribunal recognised that it does not need to take an “all or nothing” approach and it was open to award expenses for less than 100%. The Tribunal took into account the terms of the ET3, the defences set out and the approach that was taken to the hearing. It is not fair to suggest the respondent ignored the claimant’s case. The respondent denied the sums were due and argued its case, that the wages were not properly payable due to the conditions of the AXA Scheme, the Canada Life Scheme or any other PHI Scheme not being met. Reference to “any other PHI Scheme” could reasonably be understood as meaning the Scheme relied upon by the claimant, the self administered scheme. The respondent disputed the claimant was entitled to the sums directly from the respondent and the claimant required to set out why such sums were due. The respondent disputed this and set out its position. The Tribunal considered the competing positions and found in favour of the claimant. The position advanced by the respondent was not unreasonable. It was not unreasonable to raise or to conduct the defence as the respondent did, setting out its belief as to the position and arguing the sums sought were not properly payable.

[64]The Tribunal considered the claimant’s agent’s submission that “a new defence was introduced that specific terms should be implied into the contract” and that the respondent acted unreasonably by maintaining the defence, notwithstanding the established case law, and only putting forward the proposed implied terms at the point of submissions. The respondent’s reliance upon implied terms was part of its argument as to the contractual matrix (which comprises express and implied terms). The Tribunal did not uphold the respondent’s submissions in that regard. The Tribunal did not consider, however, the approach taken in this regard to have been unreasonable or without reasonable prospects. The argument failed but was not unreasonable in the context of this case where the Tribunal required to consider the contractual position as a whole within the context of the facts.

[65]This was a challenging case and one which was not easy to determine. It was not the fault of either party that the issues to be determined stemmed from matters that had occurred some years ago given the contract was created in 2012/2013. The Tribunal deals with the challenges this presented in its observations at paragraphs 64 and 65. As indicated at paragraph 66 due to how matters progressed at the time, the parties had focused upon different issues with regard to the claimant’s contractual entitlement. That was not the fault of either party but how matters transpired. It was not unreasonable for the respondent to focus upon (and plead) the position as then understood in light of what the claimant was arguing. There was no suggestion the respondent was not genuine in its belief as to the position. While (as noted at paragraph 68) the position may have been different had both parties been clearer at the time the issue arose, the way in which both parties pled and ran their respective cases was not unreasonable since it reflected their respective positions. Rather than not engaging with the claimant’s case, the respondent believed the sums due to the claimant were not properly payable and so the claimant was required to establish her entitlement. That was a reasonable position to adopt. Looking at the whole picture

[66]The Tribunal took a step back and looked at the whole picture - the claim raised, the respondent’s approach to the claim and its defence and how matters progressed generally and specifically at the Hearing in light of the applicable law and the position with regard to expenses in the Employment Tribunal. The claim raised by the claimant was resisted, the respondent making it clear that the legal basis for the claim (the sums being properly payable by the respondent) was the central issue to be determined. The Tribunal assessed matters objectively and was satisfied there was no unreasonable conduct by the respondent, either in its defence or conduct of its defence.

[67]The Tribunal recognised that just because there are disputed facts does not, by itself, mean a respondent acts reasonably in defending a claim. This was considered carefully. In this case there were disputed facts, namely the construction of the claimant’s contract. Even on the claimant’s own case, the terms of the ICAS scheme were not to obvious as to guarantee her an entitlement to a sum of money from the respondent (as opposed to an insurance benefit). There was a case to be made that the entitlement was to a Scheme benefit, a policy of insurance, even if that case was nit successful. The Tribunal required to conduct a careful analysis of the facts and law. It was reasonable for the respondent to defend the claim and to do so in the way it did, even if their position was not upheld. Conclusion

[68]On the facts of this case the approach taken by the respondent, namely to require the claimant to establish her claim, was not unreasonable. The response did not have no reasonable prospects of success.

[69]The Tribunal did find that it was unnecessary to rely upon implied terms and that the approach other providers take to these matters was not relevant but ultimately the key question before the Tribunal, the construction of the contract, was not so obvious and clear as the claimant’s agent alleges in the application. The approach of the respondent in arguing the matter was not unreasonable. They provided their legal analysis of the contract as they understood it, in light of the law as then understood.

[70]The Tribunal is therefore satisfied that the respondent did not act unreasonably in defending the claim (nor in the way in which the claim was defended). The Tribunal is also satisfied that the response did have reasonable prospects of success, looking at matters objectively.

[71]The application for expenses is accordingly dismissed.

[1]Following a hearing lasting 5 days and following 3 days of deliberations, the claimant’s claims of unlawful deductions was upheld and judgment was issued on 29 July 2022.

[2]The Tribunal found that there had been an unlawful deduction from her wages and that the respondent was contractually due to pay the claimant monthly sums of one twelfth of three quarters of the claimant’s fixed or normal annual salary (in respect of the 23 hours she was required to work) less state benefits received. The monthly sums were to be paid following the claimant’s incapacity from work for a period of 26 weeks. The sums due were to increase by 5% on each anniversary of commencement of payment (ignoring any salary increase had the claimant been at work). The Tribunal gave the parties 42 days to agree the specific sums due (as the claimant had not provided precise details of the state benefits she had received, which was in her possession).

[3]References in this judgment to paragraph numbers are to paragraph numbers in the liability and remedy judgment.

[4]The claimant sought reconsideration of the decision by email dated 29 July 2022 in 3 respects (each with regard to the sums to be paid). The application was contested and this Hearing had been fixed to consider both parties submissions, both parties having provided written submissions and having had the chance to respond to the points made. The

Law

[5]An application for reconsideration is an exception to the general principle that (subject to appeal on a point of law) a decision of an Employment Tribunal is final. The test is whether it is necessary in the interests of justice to reconsider the judgment (rule 70). What is in the interests of justice is a matter for the Tribunal on the facts. The application

[6]The application contained 3 matters and these are dealt with in turn. Sums due to the claimant

[7]The Tribunal found that the claimant’s entitlement under the scheme was to the sum the claimant would normally earn, working her contracted hours, the guaranteed sum under her contract of employment. The claimant’s agent argued that the sum due to the claimant should be her “normal earnings” which should include payments for regular weekend work/overtime carried out by the claimant.

[8]The issue was to be decided by focusing upon the “ordinary and natural meaning”. The Tribunal referred to the “normal and common sense interpretation of normal earnings within the context of the position the parties found themselves” (paragraph 242) and concluded (paragraph 242) that “normal earnings” amount to the sums to which the claimant is “guaranteed under her contract”. The claimant’s agent argued the Tribunal should reconsider its decision, on the basis that the Tribunal has taken too narrow a view of the matter by focusing on what was “guaranteed” under the contract in the form of basic salary only.

[9]Having regard to the ordinary and natural meaning of the phrase, the claimant’s agent referred to the Collins online dictionary definition of “normal” as “usual, regular, common, typical”. With reference, therefore, to what the claimant would normally earn, another way of putting it would be to consider what the claimant would usually or typically earn, or what she would earn on a regular basis.

[10]The claimant’s evidence was as follows: “The service the respondent provided was an employee assistance programme. They had to be available to assist employees in difficult circumstances. The service was offered to ICAS clients on the basis it was 24 hours a day and 7 days a week. After the office in Glasgow was up and running, it became necessary as things expanded for the weekends to be covered in the same way weeks were, 24 hours a day. There was a roster system, a rota, and people on the rota required to work weekends, and I was on the rota and I was required to work 1 in 4 weekends. Once rostered, there was no choice not to work on the weekend. This was a necessary and important part of the service to the clients. From around 2005 there were regular people required to work weekends who were put on roster for that purpose. From 2005 I was on the roster and worked 1 in 4 weekends until I was dismissed.”

[11]There was no challenge to the above evidence of the claimant, and no contrary evidence was provided by the respondent. Therefore the claimant regularly worked one in four weekends, as a matter of course over many years.

[12]Although the Tribunal concluded payment for weekend work was not guaranteed and the sums could fluctuate (paragraph 243), it was argued that there was no evidence to this effect. The only evidence in relation to this issue was that above which supports a conclusion that the claimant was regularly and as a matter of course paid for weekend work (one in four weekends).

[13]In paragraph 243 the Tribunal placed reliance upon the contract stating that the claimant “may be requested” to work weekends. However, that was not consistent with the earlier statement that the Tribunal should have regard to the “normal and common-sense interpretation of normal earnings within the context of the position the parties found themselves”. Having regard to the context should involve looking beyond the strict wording within the contract and see the position as it was in practice.

[14]In this regard, in paragraph 243 the Tribunal stated that the claimant “chose” to accede to requests to work weekends, and in paragraph 244 that the claimant “believed she was required to work” weekends. At paragraph 60 it is said that the claimant “considered” that she required to work weekends when rostered. However, there was no suggestion or evidence that the claimant was under a mistaken belief around the requirement to work weekends. The evidence of the claimant was: “There was a roster system, a rota, and people on the rota required to work weekends, and I was on the rota and I was required to work 1 in 4 weekends. Once rostered, there was no choice not to work on the weekend.”

[15]In paragraph 60 it was said that the claimant would “often” be rostered to work one weekend in four. It was argued that this does not fully reflect the evidence of the claimant that “From 2005 I was on the roster and worked 1 in 4 weekends until I was dismissed.” There was no suggestion or evidence that the claimant worked anything other than one weekend in four as a matter of course over many years.

[16]In this regard, in paragraph 60 the Tribunal found the claimant “regularly worked one weekend in four from around 2005” which is consistent with the evidence of the claimant and supports a conclusion that the claimant worked one weekend in four as a matter of course.

[17]In paragraph 246 it was said that due to the time which had passed “there was no clear evidence as to exactly what overtime the claimant had worked”; that it was not clear whether the claimant “actually worked every weekend in four”; and that it was not clear whether the claimant “did work one weekend in four for the entire period”. It was argued that the passage of time should not impact on this, as the claimant provided clear evidence of her working pattern in the years leading up to her absence from work, and the Tribunal found that the claimant “regularly worked one weekend in four from around 2005”.

[18]In paragraph 245, reference was made to the ET1. The Tribunal concluded that the claimant viewed her normal take-home pay as being based on fixed weekly hours, not including any weekend work. It was argued the Tribunal was mistaken in this regard. The relevant section of the ET1, section 4.2, notes normal take-home pay as being £1054. That is the amount of net pay referred to in the payslip at page 119 of the bundle, and takes into account overtime. Section 4.2 also states that normal take-home pay should include overtime. This was also relevant to paragraph 49 and the mistaken conclusion that the claimant made no reference to her additional hours or pay in respect of weekend work in the ET1, when she did. Therefore, contrary to the conclusion of the Tribunal at paragraph 245, the claimant did consider that the sums she received for working the weekends were part of her normal pay.

[19]It was submitted that from the evidence available to the Tribunal, and the Tribunal’s own findings, on the balance of probabilities, the claimant worked one weekend in four as a matter of course for the period of around five years prior to her absence from work commencing, i.e. between 2005 and 2010.

[20]With regard to authorities, the claimant’s agent relied upon the holiday pay line of cases such as Flowers v East of England Ambulance Service NHS Trust

[2019] EWCA Civ 947

where the issue was whether holiday pay should take account of non-guaranteed overtime and voluntary overtime. Part of the case involved construction of the relevant contract. While the terms were different to that of the claimant’s case, as the Court in Flowers was interpreting a clause which specified that pay was to be calculated on the basis of what the individual would have received if they had been at work, it was argued the Tribunal reached a conclusion which broadly reflects the terms of the contract in Flowers, hat the interpretation of “normal earnings” should reflect what the claimant would “normally earn” in terms of her contract. In that sense, the two cases are similar, as the claimant’s case is essentially about working out the pay which the claimant would have earned had she not been absent from work (albeit due to ill-health, not holiday).

[21]In paragraph 19 of Flowers the Court rejected an argument “that the omission from the clause of an express reference to overtime must be taken to represent a deliberate decision by the parties that it should be excluded from the calculation of holiday pay”. The Court goes on to say that the “clause must be read as a whole”.

[22]In the claimant’s case, the relevant contractual provision states that a “proportion of normal earnings are paid during a long-term absence” and that the benefit is 75% of “scheme salary” less state benefit. Like the position in Flowers (see paragraph 15 of the judgment), there is no reference to “basic” salary or “overtime”. The Court stated that the clause “could have said that during annual leave the employee would receive basic pay plus certain specified supplements, but it did not”. Similarly, in the claimant’s case, the terms of the Scheme could have specified that payment was based only on basic pay, but it does not do so. What it does do is refer to “normal earnings”.

[23]In paragraph 19 of Flowers, the Court refers to the “natural interpretation” of the clause, which is similar to the Tribunal in the claimant’s case referring to the “ordinary and natural” meaning of the words (paragraph 242). It was argued that applying this principle, and in the absence of the contract saying otherwise, “normal earnings” should include payment received for regular weekend work / overtime.

[24]The claimant’ agent argued that Bear Scotland Ltd v Fulton

[2015] ICR 221

(paragraph 29 of the judgment in Flowers), noted that “‘normal pay’ is that which is normally received” and the claimant’s case should be addressed in a similar way, by concluding that in order to understand what is meant by “normal earnings”, it is necessary to consider what the claimant would normally earn in terms of her contract (paragraph 242). In Bear Scotland, the Employment Appeal Tribunal went on to say that where a pattern of work is settled there is no difficulty in identifying normal as including non-guaranteed overtime.

[25]It was argued that the Tribunal should conclude that normal earnings incorporates payment for weekend work / overtime where there is a settled pattern of work and that, in the claimant’s case, there was such a settled pattern. Having regard to(a) the ordinary and natural meaning of “normal earnings”,

(b) what the claimant would normally earn, and

(c) the context of the claimant being on the rota as a matter of course for one weekend in four over many years and being required to work when on the rota, the Tribunal should conclude that the claimant’s salary for regular weekend work/overtime is to be included within “normal earnings” for the purposes of the contractual Scheme and the calculation of deductions from those normal earnings.

[26]The respondent’s agent argued that the Tribunal’s original decision was sound. The Tribunal concluded that overtime and weekend work was not to be included as part of “normal earnings”. Applying commercial common sense, it was determined that normal earnings “is the sum to which she is guaranteed under her contract since that is the sum she would normally earn.” That was the correct interpretation.

[27]The respondent’s agent noted that the Tribunal concluded (paragraph 242 of the Judgment) that: “The scheme would replace the normal earnings, the sums to which the employee would be guaranteed if able to work, the normal rate of pay in terms of the contract.” The claimant’s contract stated that she “may be requested” to work weekends. This was not a guaranteed term and ultimately there was fluctuation in what the claimant earned. The Tribunal recognised this fluctuation and determined that “There is no suggestion that the entitlement was based upon an average of the sums the claimant would receive where her earnings would fluctuate or if she would earn more money by working hours in addition to her normal hours.” What remained guaranteed and “normal” was the claimant’s contractual rate of pay.

[28]The respondent’s agent noted that during the hearing Ms McGlone stated that it is the norm for payments under a permanent health insurance scheme to only cover base salary and not variable elements of pay. It was submitted at the time that the claimant had not provided the Tribunal with sufficient evidence to support an assertion that overtime payments were part of her “normal earnings”.

Relevant law

[29]The respondent submitted that the Tribunal’s finding in relation to the ordinary and natural meaning of the claimant’s “normal earnings” was well-reasoned and represents the reality of the situation. The Tribunal considered the position of the voluntary overtime noted in the claimant’s contract “had normal pay included overtime” (paragraph 246). The conclusion reached, at paragraph 246 of the Judgment, was that it was unable to determine if, as a matter of fact, the claimant did work one weekend in four over the course of the relevant period, as argued by the claimant. The claimant has not produced any further evidence on this point, so the Tribunal is being asked to reverse its decision using only the same limited materials and arguments that were originally put to the Tribunal and which were deemed insufficient.

[30]If the Tribunal decided that “normal earnings” in these circumstances could include overtime, it is submitted that whether they would is a question of fact for the Tribunal. That is clear from Patterson v Castlereagh Borough Council [2015] NICA 47, where the Northern Ireland Court of Appeal remitted the case to the Tribunal to find whether the payments were “normal”. The Court held that “It will be a question of fact for each Tribunal to determine whether or not that voluntary overtime was normally carried out by the worker and carried with it the appropriately permanent feature of the necessary remuneration to trigger its inclusion in the calculation.”

[31]The European Court in Williams and Others v British Airways plc C-155/10 said to make the assessment of whether voluntary overtime was to be considered “normal remuneration”, this would require “specific analysis” which requires the Tribunal to act on a case-by-case basis and make a determination on the basis of the evidence put before it. The claimant was not required under her contract of employment to work overtime and the claimant has not, in the words of the Tribunal, produced “clear evidence as to exactly what overtime the claimant had worked and what the rate was.” Consequently, the claimant has factually failed to establish the earnings she received pursuant to voluntary overtime and whether this had sufficient permanency to have formed part of her “normal earnings”. From the Tribunal’s interpretation of the phrase “normal earnings”, it had made a simple factual finding on the evidence, or lack of evidence, before it. Decision on payment due to the claimant

[32]The key question for the Tribunal was to interpret what sums the claimant was entitled to. In answering this question it is important to consider the full context of the entitlement, and avoid a narrow view of the contractual matrix. This is important. As Flowers makes clear the full contractual matrix should be considered and not words in isolation. The relevant excerpts of the contractual matrix are as follows.

[33]The claimant’s offer letter set out her “hours of work” (referring to “standard hours” and that weekend roster work may be requested for which “additional payments” would be made) and “salary” (which referred to the salary for standard hours). There was no reference to how the additional payments for overtime would be calculated, whether under the heading “salary” or elsewhere.

[34]The contract referred to “Benefits Package” including reference to the Royal and Sun Alliance Medical Insurance Plan.

[35]The Handbook which was initially given to the claimant stated that the PHI scheme entitled employees to be paid a “proportion of salary” which sums were secured under an insurance policy (the cost of which was said to be borne by the respondent). Further details were available on request.

[36]The document referred to life insurance which paid “a lump sum equal to 4 times your annual salary”.

[37]The PHI entitlement was to “a proportion of salary”.

[38]The information the claimant received when she asked for more information referred to the pension entitlement referring to employee contributions being “2% of basic salary” and death in service entitlement being “4 times annual salary”.

[39]With regard to PHI all permanent employees were eligible and “a proportion of normal earnings are paid during a long term absence”. Critically the benefit is stated to be “monthly 1/12 of 3/4s of the individuals scheme salary less state benefit”.

[40]In other words reference is made throughout the documents given to the claimant to “salary” (referring to the guaranteed hours she was to work), “annual salary”, “basic salary” and “individual’s scheme salary”. There is no definitions section pertaining to the PHI entitlement which must be construed within the context of the contractual position.

[41]While it would be attractive to assume that the claimant was entitled under the PHI scheme to 75% of “normal earnings” (which is what the claimant contends), that is not what the entitlement is, since the entitlement is explicitly stated to be a proportion of the “individual’s scheme salary”. When the document refers to a proportion of normal earnings it must mean whatever the proportion 1/12 of 3/4s of the individual’s scheme salary less state benefits is. If it meant 1/12 of 3/4s of the individual’s “normal earnings” it would have said that but it did not. Reference to normal earnings was the result of the calculation rather than the calculation itself.

[42]In order to give meaning to the words used in creating the entitlement, the natural and ordinary meaning is that the entitlement is to be governed by the individual’s scheme salary, with the relevant calculation being carried out in relation to that sum (which would necessarily be a proportion of the individual’s normal earnings). It would be inconsistent with what the parties said to simply say the claimant is entitled to 1/12 of 3/4s of her normal earnings.

[43]Had the position simply been a calculation of the claimant’s “normal earnings” the claimant’s agent’s submissions would have considerable force. While the holiday pay authorities are considering holiday pay, the principles underpinning these issues are similar and “normal” could mean as contended by the claimant. However, the issue in this case is to determine what the parties meant in their contract when they used the words they did. The context of the words is vital and must not be ignored. The use of “normal earnings” must be viewed in context. That distinguishes the authorities relied upon by the claimant (which relate to a different entitlement in different contexts). There must be an analysis of what the parties said in this unique situation within the full contractual context at the relevant time.

[44]The Tribunal had first to determine what the claimant’s “scheme salary” was. In the absence of a definition this had to be considered using the principles of contractual interpretation in Scots law. What did the parties mean when they said “scheme salary”? They did not say “normal earnings” and clearly could have said this, given the earlier reference to it. It was likely that scheme salary was not identical to scheme salary given the use of both terms which do not appear to be synonymous. “Scheme salary” was more likely than not to be the claimant’s “salary” under her contract, the sum to which she was guaranteed if she worked the normal hours under her contract.

[45]The respondent’s agent notes in her submissions that Ms McGlone stated that the norm was that “scheme salary” was basic salary in PHI schemes. That, however, did not have a bearing on the Tribunal’s decision since the entitlement was based upon what both the employer and employee understood in this particular case. What happened elsewhere (unbeknownst to the claimant) could not affect the interpretation of her contractual entitlement. It may well be obvious to the respondent (not least given its area of business) that PHI entitlement is based upon “basic salary” but that again was not what the document said, given the reference to “scheme salary”. The reference to “basic salary” was in relation to pension entitlement.

[46]Looking at what the parties must have intended given the words they used in context, the Tribunal considered that “scheme salary” was likely to refer to the salary to which the claimant was guaranteed under her contract. It was clear (and the claimant knew) that the respondent had an insurance scheme in place underpinning the entitlement (and the document made it clear that the insurance was paid for by the respondent). Reference to “scheme salary” would be the sum considered (by the parties) to be the claimant’s salary for the purposes of that scheme.

[47]The entitlement is therefore whatever the parties would have considered the claimant’s salary for the purposes of the scheme to be, viewed at the time the contract was entered into. At the time the contract was entered into it was recognised that the claimant’s entitlement was broken into 2 parts – her salary (for normal hours of work) and the additional payments (paid for the times she chose to accede to the request to work weekends as set out in her contract). Her contractual entitlement is part of the context and contractual matrix in assessing what the parties intended when the benefits document was issued. It was highly unlikely that scheme salary would be a variable sum, or a sum that could not be stated at the start of each year (or at a fixed point in the year when the policy was engaged). It was far more likely scheme salary was a fixed amount to which the claimant would be entitled each year (thereby allowing the relevant proportions to be identified, which would in turn become a proportion of her normal earnings). Were it otherwise, scheme salary would not be known at a fixed point each year, since it would depend on how many weekends the claimant had worked. Even if the claimant chose to work every weekend, that did not mean those hours and payment for those hours was included in “scheme salary”. That was because scheme salary was more likely to be based upon what her salary was considered at a particular point in time for the purposes of the scheme, which would not include any overtime the claimant worked.

[48]The Tribunal concluded that the respondent’s agent’s submissions had merit. Had the issue solely been one of identifying “normal earnings” the claimant’s agent’s submissions would have considerable merit but that was not what the contract said, particularly when viewed in context of the wording used by the parties and the specific facts which must be considered.

[49]The claimant was entitled to a specific proportion of “scheme salary” less state benefit which would become a proportion of her “normal earnings” which is paid to her. The issue is not simply identifying her “normal earnings” and calculating the proportion of normal earnings. Instead a natural and normal interpretation of the words the parties used (in light of the surrounding factual matrix at the time the contract was entered into) was to first identify the claimant’s scheme salary. The next step required a calculation 1/12 of 3/4s of the scheme salary less state benefits. The sum arrived at is (necessarily) a proportion of normal earnings and is the sum due. The clause referring to a proportion of normal earnings simply explains that those to whom the provisions applied would be paid a proportion of normal salary when absent, the specifics of which (ie how to calculate the sum) was set out thereafter, being based on scheme salary. If the parties had intended the calculation to be 1/12 of 3/4s of normal earnings less state benefit the parties would have said that and the way in which the contract is worded shows that was not what was fairly intended.

[50]The Tribunal did not consider the matter to be ambiguous such that any rules of construction were needed. Properly and carefully viewed and analysed, the parties’ intention, viewed from the words they used, and importantly viewed in light of what was known at the time the contract was entered into, taking account of what the contract says. was that scheme salary meant the specific and guaranteed sum to which the claimant was entitled (ignoring any additional sums to which she may become entitled as a result of working weekends). That was used to calculate the sum due, which would be a proportion of normal earnings.

[51]The fact the claimant did work most if not all weekends or considered that she had to or even that she considered overtime to be part of her normal pay did not alter the contractual interpretation which must be assessed at the time the bargain was entered into. The matter must be assessed at the time the contract was entered into, looking at the words the parties used in the relevant contractual documents.

[52]The points made by the claimant’s agent would be sound in relation to an interpretation of “normal earnings” in isolation but that phrase must be interpreted in line with the words used, particularly scheme salary which is a different (and fixed) concept. The fact scheme salary was used rather than basic salary did not mean that scheme salary must mean normal earnings was intended since that was not the phrase used. The case law relied upon by the claimant is relevant in assessing “normal earnings” but does not properly take account of the context in this case which is clear given the specific words used. The specific sum is calculated by reference to scheme salary, which is the principal issue, thereafter arriving at a sum which is (necessarily) a proportion of normal earnings. The contractual matrix is such that the sum is not based on normal earnings but ends up, once calculated, to be a proportion of normal earnings. As indicated above the natural interpretation of scheme salary is to the fixed amount (excluding the additional payments received in respect of overtime). Reference to normal earnings is simply a shorthand way of saying what the end result of the calculation is, rather than intended to affect how the sum arrived at is calculated.

[53]On that basis the Tribunal considers that it is not in the interest of justice to vary or revoke the original decision in this regard given the context and words used by the parties at the time the contract was entered into. Amount of overtime

[54]While it was not strictly necessary to consider the amount of overtime that should be included, since the Tribunal considered that properly interpreted, the entitlement was to scheme salary (which did not include overtime), the Tribunal considered the issue of the amount of overtime that should be included, were it to be included in the sums to be paid.

[55]The claimant’s agent argued that the amount of additional pay for weekend work should be 13.5% of basic pay. In paragraph 246 it was said that due to the time which had passed there was no clear evidence as to exactly what the overtime rate was. In paragraph 61, in respect of year 2, it was said that there was no evidence as to precisely what the overtime payment would have been for that year. However, the evidence provided to the Tribunal, in the form of payslips covering past years as well as year 1 of the claim, was such that it could reasonably be concluded, on the balance of probabilities, that payment for weekend work/overtime was 13.5% of basic pay.

[56]It was argued that the passage of time does not impact on this documentary evidence. The fact that the respondent was unable to give its own clear evidence on how overtime is calculated should not prevent the Tribunal from drawing a conclusion in this regard, with reference to the documentary evidence available. “Normal earnings” should include payment in respect of regular weekend work/overtime, the amount of the additional payment should represent 13.5% of basic pay.

[57]The respondent’s agent observed that the Tribunal recognised that the claimant’s representative made a reasonable attempt to calculate what any overtime payment would have been (in respect of the second year in question). However it is clear from paragraph 246 of the Judgment that the Tribunal was unable to accept this as a sufficient basis to allow a calculation to be made to cover the whole relevant period. Whilst the proposed calculation is repeated by the claimant’s representative, this is restating what was submitted. It is unclear on what basis this demonstrates any additional information which would allow the Tribunal to reconsider its prior conclusion.

[58]The respondent submitted that when the terms of the Judgment are considered in totality, there is no basis for it to vary or revoke its decision. Decision on amount of overtime

[59]The hearing had been fixed, and the parties had agreed that the hearing had been fixed, to determine liability and remedy. Both parties attended the hearing to provide their evidence they wished considered to determine each of the issues in this claim. The claim had been raised in 2013. It was not in the interests of justice to delay matters any longer than absolutely necessary. It had been open to the parties if so desired to ask to sever liability from remedy but neither party had done so and the Hearing progressed upon the basis that a final determination would be made.

[60]The evidence with regard to the amount of overtime worked each month covered by the claim was not clear. While the claimant maintained she worked most weekends, the position in respect of payment was less clear, given the fact payslips had only provided a snapshot. It was not clear precisely how overtime was paid in respect of each month (and how the sum was calculated and any change month on month). Ms McGlone had noted when the claimant’s case was put to her that the paperwork provided did not make it obvious since there were a number of different possible interpretations with regard to how overtime was calculated. It was not surprising given the passage of time that there was no clear evidence from either party but the Tribunal had to consider matters from the evidence that was presented to it, the onus being on the claimant to establish her claim.

[61]The claimant was able to refer to the overtime payment of £160.43 (in respect of overtime work) in a payslip from December 2009 but she was unable to say precisely what the position was month on month (and year on year) with regard to how overtime was calculated specifically. While the claimant had provided some payslips the matter had not been explicitly covered in evidence and, as noted at paragraph 246, the claimant’s agent “reasonably tried to estimate the position” and provide his view but that was an estimate and not the actual sums. 13.5% of basic pay was the claimant’s agent’s estimate which may or may not be right. The payslips before the Tribunal were for 23 December 2009, 28 June 2013 and then 27 July 2002, 27 January 2006 and 31 January 2007. It was not at all clear as to the position in respect of each month covered by the claim what the sums the claimant received by overtime were or how they were calculated. That was why the claimant’s agent was required to reasonably estimate the position rather then precisely assess it.

[62]The Tribunal considered whether it would have been possible to accept that reasonable estimate as sufficient. Had it been necessary to do so, the Tribunal would have concluded that it was not possible to do so. It was for the claimant to prove her entitlement. The parties could have agreed the position prior to the hearing and if agreement could not be reached the position should have been covered by the production of evidence, covering each month in respect of which overtime was done and payment made thereby allowing a finding to be made on the basis of clear evidence. In the absence of evidence covering each period when overtime was worked and paid, it was not possible to confirm the precise amount and an estimate was not appropriate.

[63]The claimant’s agent submitted during oral submissions that the Tribunal should focus on the evidence it had and not on the evidence it did not. He noted that a “snapshot of different years” had been provided which he said showed that overtime was 13.5% of basic pay. The parties had tried to reach agreement on this but it was not possible to do so and it was ultimately a matter of proof. The claimant’s agent argued from the evidence presented it was more likely than not that overtime was 13.5% of basic pay and there was sufficient evidence to make that finding and if more clarity is needed a further hearing could be fixed. The difficulty with that submission is that it was for the claimant to set out the precise basis of the sums sought. While a snapshot of various years was produced there was no clear evidence that showed what was paid (or how it was calculated) in respect of each month in question. That was a matter that could have been done, by providing payslips for each month in question or some other breakdown and estimating the amount is not appropriate in this area.

[64]As the respondent’s agent noted during oral submissions the evidence in respect of each overtime period for each of the months covered by the claim was not clear and had not been established in evidence. While the claimant believed she had worked one weekend in four, the position in respect of holidays was not clear nor of the hours worked on each occasion. There was a lack of precision which was why the claimant’s agent had sought reasonably to assess the position but that was necessarily an estimate in the absence of evidence that would have allowed precision.

[65]Given the hearing had been fixed to assess remedy and the time that had passed it would not have been appropriate to fix a further remedy hearing to allow the claimant a further opportunity to set out the position. Even by the time of the reconsideration hearing, there was no precision with regard to this matter. Relying on some payslips for some years with a reasonable estimate does not allow certainty with regard to a key financial element. In any event it was not necessary to carry out this calculation given the decision reached with regard to the payment due.

[66]The Tribunal did allow the parties time to confirm the position with regard to statutory benefits since there would be clear evidence in the claimant’s possession in this regard and delays could be avoided. It would not be consistent with the overriding objective to estimate benefits and issue judgment for a sum likely to be in excess of that to which she was entitled nor to delay that matter further. The 5% escalator

[67]The final ground upon which reconsideration was requested related to the escalator entitlement (or annual uplift), the Tribunal having found that the entitlement was to increase the initial scheme salary by 5% each year (irrespective of any wage increase).

[68]The claimant’s agent argued that reference to “scheme salary” is the salary paid by the respondent to the claimant at any particular point in time, to include any increase in salary. It was accepted that the claimant’s salary increased in April 2012. In paragraph 61, the Tribunal found that the claimant’s salary had increased in April 2012 to £1233.50 per month (basic pay). The Scheme provides for an increase of 5% each year. It was submitted that this 5% increase is separate from the amount of salary which is normally paid.

[69]In paragraph 247, the Tribunal concluded that the 5% increase only applies to the initial salary when the entitlement was triggered. However, by drawing this conclusion the Tribunal has essentially added its own “gloss”, which does not include any reference to initial salary, on the basis that this would otherwise provide the claimant with a windfall. It is not for the Tribunal to fix what might be perceived to be a bad bargain.

[70]The benefit should first have been paid in May 2011. The claimant’s salary increased in April 2012, and the anniversary of when the benefit should first have been paid was May 2012 (one month after the increase). This close proximity between the increase in salary and the anniversary of payment may have resulted in a conflation of the scheme salary and the benefit payment. If the benefit had instead first been payable in January 2011, and if the claimant’s salary had increased in April 2011, then the first anniversary of payment would have been January 2012. In that scenario, it would be clear that the 5% escalator would apply from January 2012 (the first anniversary), and would apply to the actual salary of the claimant, as increased.

[71]The Tribunal stated (paragraph 247) that regard should be had to the “normal and natural meaning of the words used”. Applying this to the terms of the contract, and without introducing any additional terms, “scheme salary” is the salary payable to the claimant at any particular point in time. Separately, the contract provides for a 5% annual increase in the sum payable.

[72]The respondent’s agent argued that such an approach is not provided for by the terms of the contract. The only increase provided for in the Benefit Document is the annual increase of 5%, nothing further. There is nothing in the contractual documentation which states that the claimant will continue to receive a salary increase in addition to the 5% escalator which applies.

[73]The Tribunal concluded “There was no suggestion the entitlement increased both by any wage increase to the normal scheme salary and by 5%. To provide the claimant with a 5% increase to any normally increased salary would be to confer upon the claimant a windfall and would not be consistent with the normal and ordinary meaning of the words taken in context, applying commercial common sense.”

[74]The respondent’s agent argued that the Tribunal was entitled to conclude, applying commercial common sense, that this was the correct interpretation of the relevant provisions, and when it did so it had all of the information available to it as it has been presented with here. It is submitted that no further information has been provided which demonstrates why the Tribunal ought to reverse its decision. It is submitted that it would not be in the interests of justice to reconsider this finding. Decision on escalator sum

[75]The issue here was to interpret what the parties meant from the words they used within the context of the contract concluded. The only reference to the increase was in the additional information the claimant received which referred to the entitlement being 1/12 of 3/4s of the individual’s scheme salary less state benefit and then it stated “increased by 5% on each anniversary of commencement of payment for as long as the benefit may be payable.”

[76]The dispute was whether the sum which increased by 5% each year was itself fixed or whether the 5% was added to any increase in salary to which the claimant was entitled each year. In other words when the entitlement was triggered was “scheme salary” fixed (static) or was it to increase (be dynamic). There is no suggestion from the document that the scheme salary changes once the scheme is engaged and payment is due. A natural and ordinary interpretation would be that the year in which the sums begin to be paid would provide the basis for the sums to be paid for the duration of the absence during which the sums would be payable.

[77]The claimant’s agent submitted this is placing a gloss upon the actual words used. It is not since the interpretation reached is done so using the words the parties used. There is no suggestion that the 5% is to be on the basis of any increased salary each year. It may well be that the 5% is intended to cover any salary increase but there is no reference to what the 5% is intended to cover. The Tribunal would be adding to what the parties had agreed if it found that the 5% was to be in addition to any salary increase to which the claimant would have been entitled if she were at work. Interpreting scheme salary as salary which is increased year on year would be to add a gloss to the words used by the parties. It is not what is said nor reasonably what is intended.

[78]The Tribunal require to interpret what the parties intended to mean using the words they used and the context, at the time the bargain was concluded. The entitlement is clear – to 1/12 of 3/4s of the individual’s scheme salary less state benefit increased by 5% on each anniversary of commencement as for as long as benefit continues to be payable. Reference to “scheme salary” is to the claimant’s basic salary as detailed above. The parties could have said “scheme salary from time to time in force”. By not making it clear that the intention was that scheme salary would increase each year, the natural interpretation is that scheme salary is fixed from the word used by the parties and context in this case at the time the contract was concluded.

[79]Scheme salary is to be identified at the point in time when the entitlement is engaged. When entitlement is engaged, the scheme salary is identified – the claimant’s annual salary (without any additional payments that may become due). That specific sum, as calculated, is increased by 5% on each anniversary on commencement of payment.

[80]The parties kept it simple – after a year has passed, the sum to which the claimant is entitled increases by 5% from what it was before. Had the parties intended the sum to increase in addition to 5% (such as by pay increases each year) the entitlement would have made that clear, since the calculation would be more complex, potentially with an increase falling due during the year when the benefit had become payable. Had the parties intended that to be the case, it would have stated that. There was no basis from the words the parties used to put the gloss the claimant seeks to the words used.

[81]The wording used by the parties within the context in which the agreement was entered into, viewed at the time of the bargain, is clear. Entitlement was based on the fixed scheme salary pertaining at the time the policy was engaged. Entitlement increased only once a year, by 5% on the anniversary of the first payment. There was no suggestion of any other increase (or decrease) in the sums due and it is not necessary or fair to insert this.

[82]The interpretation placed upon the wording by the claimant’s agent is not a natural interpretation of the wording used within context. Had, for example, the respondent required to reduce all employees’ salary such that staff’s annual salary decreased, on the claimant’s agent’s analysis, the claimant’s entitlement under the contractual scheme would also decrease (and then be subject to the 5% increase). That is plainly not what was intended by the words the parties used. The parties intended to keep the calculation simple – provide those who are unable to work due to absence for lengthy periods of time with a fixed sum (based upon the scheme salary at one point in time) and then increase that sum yearly by 5% (with no other adjustments). Any other interpretation places a gloss on the words the parties used and is not a fair interpretation of the words in context.

[83]It was not a natural interpretation to assume, as the claimant’s agent contended, that scheme salary meant “from time to time”. It was a term used to describe a sum of money – the scheme salary at the point payment was due. There is no suggestion that scheme salary can vary year on year by anything other than the escalator.

[84]It is correct to say that whether or not a windfall is generated is irrelevant since the assessment is to what the parties contractually agreed (and they may well have agreed to provide the claimant with a windfall or not). Given the entitlement was to 75%, as the claimant’s agent notes, the claimant was unlikely to receive more than 100% (unless the respondent had reduced salaries during the claimant’s absence).

[85]The entitlement is to the sum set out in the document – not to what the claimant would get if she was working, since by definition she would not be working. Ultimately the issue is what the parties reasonably intended to happen referring to the natural interpretation of the words used within the context of the agreement struck at the time. Using a dynamic interpretation of scheme salary is not in accordance with the context and approach and it is more likely that the parties intended the entitlement to be based on the fixed scheme salary as identified when the entitlement arose, increasing by 5% each year. That is the natural and reasonable interpretation of the words.

[86]For those reasons the Tribunal does not vary or revoke the original decision reached in this regard.

Conclusion

[87]The Tribunal carefully analysed the wording the parties used within the context of the bargain reached at the time the contract was concluded. The claimant’s agent’s analysis with regard to normal earnings is powerful in relation to “normal earnings” in isolation but that ignores the context and words the parties used in identifying the sums to which the claimant was entitled in this unique case – which were based on the scheme salary. The most natural and fair interpretation of that is the claimant’s base salary (without any fluctuating or additional payments).

[88]On that basis the sum to which the claimant is entitled is based on her scheme salary at the time payment is due. That does not include overtime or additional payments (whether or not the claimant believed she was required to work overtime or not). That was what the parties intended from the words they used. On that basis overtime is not included. While overtime might be part of normal earnings, her entitlement was to a defined proportion of scheme salary (which did not include overtime) with the resulting figure being a proportion of normal earnings. From the context and the words used, “normal earnings” was not the figure used to calculate the sums due. The sums arrived at, applying the calculation by reference to scheme salary, led to a sum which was a proportion of normal earnings. It was wrong to use normal earnings within the calculation.

[89]It would not have been appropriate to have estimated the position in respect of overtime for each month when evidence could have been led as to the precise sum and calculation.

[90]Finally, the parties intended to increase the sum payable when absent once a year. That increase was 5% on each anniversary of payment. No other changes to salary (increase or decrease) were to be taken into account.

[91]The foregoing represents what the parties intended to achieve, by considering the words used within the context at the time the contract was concluded.

[92]On that basis, the reconsideration application is refused.