Derby City Council v Woolley [1994] UKEAT 879_92_2106

EAT
Derby City Council v Woolley
[1994] UKEAT 879_92_2106 · 1994-06-21
MR JUSTICE MUMMERY (PRESIDENT): This is an appeal from the decision of the Industrial Tribunal held at Nottingham on the 15th September 1992. For the Full Reasons notified to the parties on the 19th October 1992 the Tribunal unanimously decided that the Derby City Council, who were Respondents, had made deductions from the wages of one of their employees, Mr M J Woolley, who was the Applicant, in contravention of the Wages Act 1986 .The Council was dissatisfied with that decision and appealed to this Tribunal by Notice of Appeal of the 26th November 1992.The dispute between the parties raises a short point on the effect of negotiations and agreements between the parties about conditions of employment. The dispute arises in the context of the Wages Act which provides in Section 1(1):
"An employer shall not make any deduction from any wages of any worker employed by him unless the deduction satisfies one of the following conditions, namely - (a)it is required or authorised to be made by virtue of any statutory provision or any relevant provision of the worker's contract; or (b)the worker has previously signified in writing his agreement or consent to the making of it."
No point arises on the meaning of "wages" in Section 7. The only other provision to note is Section 8(3) in the provisions of the Act for the general interpretation of Part 1. That subsection reads:
"Where the total amount of any wages that are paid on any occasion by any employer to any worker employed by him is less than the total amount of the wages that are properly payable by him to the worker on that occasion (after deductions) then, except in so far as the deficiency is attributable to an error of computation, the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion."
The question in this dispute is: what were the wages properly payable by Derby City Council to Mr Woolley? If he was paid less than the total amount properly payable to him, there is a deemed deduction.In order to understand the dispute as to what is properly payable to Mr Woolley over the relevant period it is necessary to look at his employment history. He was taken on by the Council on the 25th June 1979. On the 1st February 1982 he was appointed a Community Leader in the Council's Leisure Services Department. In 1986 he was appointed a Venture Play Leader. In 1987 a collective agreement called a "Redeployment Agreement" was negotiated between the Council and the Trade Union side. That agreement dated January 1987 contains details of the policy and procedures to be followed by the Council when redeployment is used in a redundancy situation or to enable the implementation of organisational change. It is provided that the agreement is subject to review at any time as required by the Council or the Trade Union side. There is a section in the Redeployment Agreement on earnings. 3.1 provides:
"Where a permanent employee is redeployed within the provisions of this Agreement, then that employee's earnings on redeployment will be the higher of the following:- (a) The normal basic pay plus, if applicable, average bonus in the former job or; (b) the total earnings of the new job, including basic pay, average bonus and any other contractual enhancements."
It is provided that earnings in the new job would be amended in accordance with any pay awards and, additionally, incremental progression within the grade would be honoured. Section 10 of the Redeployment Agreement provides:
"In accepting the provisions as detailed in this document, employees and Trade Unions have agreed to co-operate with the undertaking of all management reviews, any investigations into organisational structures and staffing issues and with the investigation of the introduction of new methods of work and new technology. It is accepted that such reviews may involve the use of techniques such as job evaluation and work measurement. Where such co-operation is not given, the Council reserves the right to withdraw these provisions. In all cases, the reviews and changes referred to will only be implemented following full consultation within the normal recognised procedure."
On the 31st October 1989 the City Council wrote to NALGO, as a recognised Union, and enclosed for consultation purposes a report on proposed reorganisation. That document was in evidence before the Tribunal.On the 16th November 1989 the Council sent draft job descriptions to NALGO. On the 8th January 1990 a letter was written by the Director of the Leisure Services Department to Mr Woolley offering him the post of Sports Development Leader. This is an important letter in the Council's arguments on this appeal. It was before the Industrial Tribunal and should be read in full:

"Dear Mr Woolley

Following your recent interview for the post of Sport Development Leader, I am pleased to be able to offer you the appointment with effect from 1 February 1990. The post is graded S4 and your commencing salary will be £10,023. The salary is inclusive of all enhancements for weekend and unsocial hours working, for which no additional payments will be made. All other conditions of service are in accordance with the National Joint Council for Local Authorities APT & C Services as adopted by Derby City Council and contained in your existing Contract of Employment.Your starting point on the above grade takes into account, as far as possible, your present salary including enhancements.I enclose a further copy of this letter, together with two copies of your new job description, and if you wish to accept this offer of appointment please sign and return one copy of each document as soon as possible."Mr Woolley accepted the post on those terms.It is necessary to look at that document, not only in the context of the Redeployment Agreement but also in the context of Mr Woolley's particulars of employment. When he was first appointed to work as an Assistant Play Leader 1979, Mr Woolley was issued with a Statement of Particulars and a covering letter. The covering letter from the Council dated the 18th June 1979 stated:
"The appointment is subject to the Scheme of Conditions of Service of the National Joint Council for Local Authorities' Administrative, Professional, Technical and Clerical Services as approved by Derby City Council. The Scheme of Conditions is a comprehensive document which gives a great deal of detail as to the conditions applying and is available for your perusal at this office. I am enclosing a brief summary of the main provisions for your information but, if there are any enquiries you wish to make, please do not hesitate to do so."
The document attached referred to the appointment and the date for the start of continuous service. It provided in Clause 3:
"Your terms and conditions of employment (including certain provisions relating to your working conditions) are covered by existing collective agreements negotiated and agreed with a specified trade union or unions (see paragraph 10 below) recognised by this authority for collective bargaining purposes in respect of the employment group to which you belong. These agreements are embodied in the Scheme of Conditions of Service relating to your group, as well as in other documents which are equally available to you at your place of work on notice boards or in other documentary form in your administrative centre. From time to time variations in your terms of conditions of employment will result from negotiations and agreement with the specified union or unions, and these will be separately notified to you or otherwise incorporated in the documents to which you have reference. The authority undertakes to ensure that future changes in these terms will be entered in these documents, or otherwise recorded for you to refer to, within 28 days of the change."
Paragraph 10 of the Particulars, under the heading of "Membership of a Trade Union", states:
"This Authority, as your employer, supports the system of collective bargaining in every way and believes in the principle of solving industrial relations problems by discussion and agreement. For practical purposes, this can only be conducted by representatives of the employers and of the employees. If collective bargaining of this kind is to continue and improve for the benefit of both, it is essential that the employees' organisations should be fully representative. Your Authority is associated with other local authorities represented on the national and provincial councils dealing with local authorities services."
The Industrial Tribunal found as a fact, in paragraph 14 of the decision, that:
"The applicant [Mr Woolley] accepted in good faith the offer of employment as Sports Development Leader made to him in January 1990. He acknowledged that the salary for that post would be all-embracing,"
The Tribunal found as a fact that, at that time Mr Woolley was not aware of the existence and effect of the Redeployment Agreement, although it had, by virtue of the provisions referred to, become part of the terms of his contract of employment. The Tribunal found that there was no mention of the Redeployment Agreement in the course of any interview or correspondence. The Tribunal concluded that, in those circumstances,:
"Nothing was done to abnegate the right of the applicant to rely on the provisions of the Redeployment Agreement."
The Tribunal stated their conclusion in paragraph 16 of the decision:
"The conclusion reached by the Tribunal is that the Redeployment Agreement remained effective as part of the terms of the employment of the applicant and that he is entitled to rely on its provisions for earnings protection."
It appears from the documents that the first time that Mr Woolley became aware of the existence of the 1987 Redeployment Agreement was at the end of 1990. When he became aware of its existence he wrote to the Council about his earnings.That was the dispute which led to the proceedings. Mr Woolley presented his application to the Industrial Tribunal on the 20th January 1992 complaining of continuing unlawful deduction of his wages under the Wages Act . He made it clear that this was an ongoing matter. He set out the details of, how prior to 1990, he had been employed as a Community Organiser at a salary of £10,950 per annum and how, in addition, he had enjoyed enhanced benefits for evening and weekend working amounting to about £1,200 a year. He referred to a review that the Council had undertaken in the later part of 1989 of the Department and how that resulted in a complete reorganisation. As a consequence of the reorganisation the posts in the new organisation were advertised. Existing members of staff had to apply. That was how he came to apply and be appointed to the post of Sports Development Leader referred to in the letter of the 8th January. That appointment was in the same grade and salary as the previous post. Mr Woolley complained that he suffered loss of enhancement for evening and weekend working because the grade of the new post was an all embracing grade. He set out his contention that, under the provisions of the Redeployment Agreement negotiated between the Council and the Union, he should have enjoyed protection of his earnings at the previous level. His complaint, therefore, was that, as the Council had not paid those enhancements, they had made an unauthorised deduction under the Wages Act .The Council contested the claim. They denied that there was any unauthorised deduction. They referred to the appointment of Sports Development Leader of the 8th January 1990 and contended that since that appointment Mr Woolley had been paid wholly in accordance with the terms and conditions of the post of Sports Development Leader. The grading of that post was all inclusive. There was no separate payment to be made for unsocial hours or enhanced rates for weekend working. It was submitted that Mr Woolley was fully aware of the terms and conditions applicable to the post. He accepted them and raised no query or objection on the position until 10 months later, in November 1990. It was alleged that, in the making of an appointment to a new post staff were advised that they would be placed on an incremental point within the grade. That would, as far as possible, ensure no reduction in earnings in their previous post. The Redeployment Agreement referred to by Mr Woolley was not relevant. It was contended it was inapplicable because Mr Woolley was not in a redeployment situation. He had been appointed to a new post within the revised Recreation and Community Section. It was submitted that, in any event, enhancements of the type referred to by Mr Woolley would only be protected under the Redeployment Agreement if they formed a contractual part of the earnings before redeployment and that in the previous post Mr Woolley was under no contractual obligation to work outside normal office hours and there was no obligation on the Council to provide and maintain such work. The enhancements were not, therefore, eligible for inclusion in the calculation of protected earnings under the redeployment agreement. There was no protection, in addition, for overtime payments.There were, therefore, a number of points taken by the Council for decision by the Tribunal. It is unnecessary to go into the details of all those points since on this appeal only one point has been pursued by Mr Wynter on behalf of the Council. Mr Wynter's argument is that the Tribunal erred in law in their analysis of the contractual position. His arguments have been presented clearly and trenchantly. The case came down to this. The position was that Mr Woolley had signed the terms offered to him in the letter of the 8th January 1990. Those terms, when they were accepted, either constituted an express agreement by way of a new contract or were a variation of his existing agreement. On either view the question to be answered was; how could an individual express agreement, by Mr Woolley with the Council, be ousted by the earlier collective agreement, i.e. the Redeployment Agreement. In the event that the individual terms were somehow ousted by the earlier collective agreement the question would arise whether the relevant part of the individual agreement, which provided that no additional payments would be made, had effect pursuant to Section 1(1)(b) of the Wages Act 1986 . The Tribunal had not considered or reached a conclusion on that further question.The Tribunal, in their decision (paragraphs 12 and 16) referred to the Council's contentions that there was no contractual right of Mr Woolley to enhancement of pay and that he agreed to a fully inclusive salary.The Tribunal erred in law, on Mr Wynter's submissions, in this respect. First, they found, in paragraph 13 of the decision, that the Council had no right to say that they no longer required evening and weekend duties on the part of Mr Woolley. That was wrong in law because a contract can be varied if the parties are in agreement on the matters of variation. No more need be said about that point, as it is not strictly relevant to the main point raised on the appeal.The Tribunal found, at paragraph 14, that, despite the express agreement of Mr Woolley to an "all-embracing" salary in his new post, "nothing was done to abnegate the right of the Applicant to rely on the provisions of the Redeployment Agreement". It was that part of the decision which Mr Wynter identified as containing the crucial error of law. He said that there had been an error because, as a result of the acceptance of the terms offered in the letter of the 8th January, there was an express agreement as to the terms of Mr Woolley's individual engagement in the new post. There was no express incorporation of the 1987 Agreement into his individual agreement. There could only be an implied incorporation. How, he asked, as a matter of law, could the earlier collective agreement oust or override the terms of the subsequent individual agreement which the Council and Mr Woolley were, as a matter of contract law, entitled to conclude?The position, put very simply, is that Mr Woolley's contract is contained in the letter in the 8th January. The Redeployment Agreement was not expressly a part of that Agreement. Mr Woolley can have no complaint under the Wages Act because the Council paid him and continued to pay him what was agreed in the letter of the 8th January.Although that is a simple and clear argument, as a matter of contract law, we are unable to accept that the Industrial Tribunal erred in law in the conclusions reached in paragraphs 14 and 16.The argument for Mr Woolley on this appeal has been presented in detail by Mr Kibling, both on construction of the letter of the 8th January, in the context in which it was made, and also on the contractual position.We do not find it necessary to analyse in any detail the question of construction or the law of contract relating to common or unilateral mistake. It appears to us that the Tribunal took a course which they were in law entitled to take by reaching the conclusion that, as Mr Woolley was not at the time of that letter aware of the existence and effect of the Redeployment Agreement, he was not contractually precluded by the letter of the 8th January 1990 from relying on the terms of that Agreement.Mr Wynter argued that the Tribunal had not made it clear how they arrived at the conclusion that Mr Woolley was still entitled to rely on the Redeployment Agreement. They had not analysed the matter as a question of construction of the letter of the 8th January in the factual matrix of the Particulars of Employment and the Redeployment Agreement. They had not analysed the principles of the law of contract relating to the law of mistake. In the absence of such an explanation and analysis of the position the proper course would be to allow the appeal and either substitute our own view of the position or remit it to an industrial tribunal to look again at the matter in the light of the analysis made by us.We decline to take either course. An industrial tribunal is entitled to reach a decision which is sound in law without having to analyse, in detail, the process by which they reach that conclusion. If the findings of fact point to a legal conclusion sufficiently clearly they are entitled to state that conclusion. That conclusion may be correct in law even though there has not been a full legal analysis of the position. Their decision is sound in law. Mr Woolley is not, as a matter of law, precluded on relying on the provisions of a collective agreement negotiated between the Council and his Union when as an individual he signed another letter in ignorance of the existence of the collective agreement and the effect of it. This dispute might have been avoided (and it would have been desirable to avoid it) by the Council pointing out or reminding Mr Woolley (and employees in a similar position) of their rights under the existing terms and conditions of employment, including the collective agreement which formed part of it. This was not done. The result was that Mr Woolley signed the offer letter in ignorance of and under a misapprehension as to his true legal rights. It cannot be right in law, whether analysed as a matter of construction or contract that he should be prevented from claiming the benefits intended to be available to him under the earlier collective agreement of which he was not aware.In those circumstances we find that there is no error of law in the decision of the Tribunal. We would, therefore, dismiss this appeal.