Edwards v Doncaster Metropolitan Borough Council [1995] UKEAT 934_94_0311

EMPOLYMENT APPEAL TRIBUNAL

BAILII case number: [1995] UKEAT 934_94_0311

Case No Appeal No. EAT/934/94

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

Edwards

Doncaster Metropolitan Borough Council

MR JUSTICE MORISON : This is an appeal against a Unanimous Decision of an Industrial tribunal held at Sheffield and entered in the Register on 18 August 1994.

Mr Edwards is employed by the Doncaster Metropolitan Borough Council. He presented to the Industrial Tribunal a complaint alleging that his employers had been making unlawful deductions from his wages. The essence of his complaint is that when, as a consequence of Compulsory Competitive Tendering, he lost his post as a Special Services Superintendent [the old position] and became an Arboricultural Officer (the new position), he was entitled to be paid at the rate for his old position, as opposed to the rate for his new position, which, being of lower grade, was less.

The issue before the Industrial Tribunal was whether, having regard to the circumstances in which he took up his new position, Mr Edwards was entitled to the benefit of the "Personal Salary Protection" afforded to the Council's down-graded employees contained in a document (at paragraphs 7.6 and 29) which set out `local conditions approved by the Council'.

The background facts to this case are not in dispute and may be summarised shortly.

In compliance with their statutory obligations the Council put out to tender a Grounds Maintenance contract which the Council employees bid for but failed to win. As a result, redundancies became inevitable amongst the 60 or so employees who were affected. Some took voluntary redundancy; some were employed by the successful tenderer and some were transferred to other positions within the Council. Mr Edwards was a trade union representative and in September 1990 became involved in discussions about the position, although he told the IT he did not have any substantial involvement. The Council proposed a new structure which showed that his own job was at risk, and he received from the Council a letter of 11 October 1990 which so informed him. The Council wrote to Mr Edwards a letter dated 3 December 1990 giving him four weeks notice of the termination of his employment on the grounds of redundancy. He was told he would have to work out his period of notice, and informed that his redundancy payment entitlement was £1,656. The penultimate paragraph of the letter reads:

"I am of course, in conjunction with the Personnel Section, continuing to seek alternative employment for you during your notice period."

Mr Edwards became aware that the new position was a possibility, although in terms of grade, responsibility and pay it was, as he put it, `a stepdown'. It was, in fact, a position which he had held previously and from which he had been promoted (on about 20 September 1990) to his old position. Nonetheless, he was required to apply for it formally, which he did. He was interviewed and was offered the position.

He was sent a formal offer of employment by letter dated 4 January 1991. The offer was of employment from 1 January 1991 and was subject to a four week trial period.

Under section 84 of the 1978 Act a redundant employee who is offered a new position is entitled to a statutory trial period of four weeks in which to make up his mind whether the new position is satisfactory. The Council were offering such a trial period and it was made clear to Mr Edwards, by the terms of the special condition, that if he declined the offer of alternative employment or terminated the trial period:

"in doing so it is considered by management that you have refused suitable alternative employment, any redundancy payment to which you might otherwise have been entitled will be forfeited."

Mr Edwards completed the trial period successfully and is an employee of the Council. He claims in these proceedings the difference in salary between the old and new positions. He does so in reliance upon a pay protection arrangement which he says applies to him.

It is common ground between the parties that it was part of Mr Edwards' express terms and conditions of employment in relation to his employment in both his old and new positions that he should enjoy the benefits of "local conditions approved by the Council ... after consultations with the trade unions." Those trade unions included NALGO as it was then known). Part of the local conditions referred to are contained in a document of which we have been provided only part. At paragraph 7, under the heading "Redeployment" are provisions relating to an agreed policy which is designed to avoid compulsory redundancies. The objective of the policy is defined:

"to ensure employees are given every opportunity to find suitable alternative employment with provision for retraining."

The structure of the provisions, so far as we can tell from the partial extracts of the document with which we have been provided, is that the Council may seek to redeploy affected employees on a voluntary basis (Clause 7.4(e)). Such voluntary transferees are to be given a four week trial period, or a six month period where retraining is necessary. During the trial period the old position will be kept open so that the employee can return to it if he does not like the new position. Clause 7.7 to 7.11 deals with what are called "nominated transfers", or what appear to be compulsory transfers.

Clause 7.6, appearing as it does between the provisions dealing with voluntary and compulsory transfers, provides as follows:

"Attention is drawn to the Pay Protection Policy (see paragraph 29)."

We do not have the heading to the section in which paragraph 29 appears, but paragraphs 27 and 28 are dealing with grading and re-grading. Since paragraph 29 has featured in the argument before us we set it out in full:

"29. Personal Where a down-grading results in a loss or

Salary potential loss of pay, the employee shall

Protection continue to be paid as if there had been no alteration to the pay grade scale or rate, provided that:-

(a) The down-grading was not because of a disciplinary action or for reason of inefficiency.

(b) The protection shall be removed if the Personnel Sub-Committee so resolve in circumstances where the Sub-committee believes the employee has unreasonably refused alternative employment with the Council, the acceptance of which would have either reduced or eliminated the amount of protection.

(c) In January of each year the Personal Sub-committee consider a list of employees having the benefit of this policy and the reasons why re-deployments had not proved possible.

NALGO was of the view that Mr Edwards was entitled to the benefit of the protection afforded by Clause 29; the Council took a different view. It was made clear to the Union, and Mr Edwards well knew, that the new position was being offered to him at the salary applicable to that grade and that he was not being offered pay protection in relation to it. With that knowledge, Mr Edwards signed and accepted the offer on that basis.

Paragraph 5 of the Industrial Tribunal's Decision puts the matter succinctly:

"Having heard the evidence we unanimously conclude that the applicant knew, through discussions either directly with himself or through other trade union colleagues (he being a prominent and active Union member) that the respondent was not intending to apply the pay protection policy in the circumstances in which it found itself. He certainly knew that when he signed his acceptance of the new post on 23 January 1991. What the applicant accepted was not a variation of any existing contract. He accepted the offer of a completely new post rather than be made redundant. The contract under which the applicant was employed from January 1991 was at a salary which he agreed to accept and which he received in full. With that being the case there is, in our view, no question of there having been any unlawful deduction from his wages. The applicant's claim fails."

What is said on Mr Edwards behalf is that by accepting the offer, he was not waiving his rights to pay protection. Whether there was a new contract or not, he was entitled to pay protection under both contracts and the employer cannot alter that entitlement by simply purporting not to honour an existing obligation. Mr Edwards was in a dilemma; although he never said so at the time, effectively he should be treated as having accepted the new position under protest with regard to the amount of his salary.

We do not accept those arguments for the following reasons:

Whether or not clause 29 applied to a transfer under clause 7, what happened in this case did not fall within clause 7. In the first place, his old position was terminated and not kept open during the trial period; the trial period was expressed to be a statutory trial period and the provisions of the statute are reflected in the special condition. The failure or refusal of the Council to operate the transfer system does not give rise to a complaint under the Wages Act.

In any event, in our judgment Clause 29 is dealing with a wholly different situation from the facts of this case. What clause 29 is dealing with is a case where a person's position is regraded downwards, for example in a re-grading exercise designed to avoid redundancy or after a new job evaluation exercise. In these circumstances there is an alteration to "the pay grade" and, subject to an exception in sub-clause (a), the employee is to continue to be paid as if there had been no such alteration. Subclauses (b) and (c) are there to provide a cap on the Council's liability to pay more than the rate for the job. Since these sub-clauses are dealing with matters relating to re-deployment, it is not surprising to find a reference to them in clause 7, which is concerned with that topic. But it does not seem to us, as a matter of sensible construction, that clause 29 was designed to protect pay of persons who were transferred under clause 7. Nor do we understand why, if such had been the intention, clause 7.6 comes between voluntary and compulsory transfer. We are not clear whether it is the case for Mr Edwards that the pay protection policy applied to both types of transfer or to just one, and if so, which one.

In support of appellant's case, Mr Ryder argued that because the Council had previously given pay protection when transfers had been made, we should conclude that it was always their intention that the clause should be so interpreted. In the light of the Council's response to this point we do not consider there is anything in it. The CCT regime was the first occasion on which the Council had felt compelled to take a more rigorous view of its labour costs in the context of an unprecedented number of redundancies. The application of the Pay Protection Policy would mean that the Council's labour costs would not be reduced and it would be paying some people more than their value to the Council. The reason for their past practice is as consistent with an over generous approach in individual cases as it is as an aid to identifying the Council's intention when negotiating and agreeing the local conditions.

Mr Edwards' old contract was terminated by his letter of dismissal dated 3 December 1990. He was offered a new position under a new contract as from 1 January 1991. He was offered that position on the specified salary and knew that he was not being offered pay protection. He had a choice to accept such a contract or not. The basis on which the job was offered was accepted without reservation and the parties concluded a contract on the terms offered.

We agree with the Industrial Tribunal's clear conclusion on the facts which they heard. Having seen the notes of evidence we are not surprised at their conclusions.

We were grateful to Mr Ryder for drawing to our attention the case of Bernette v London Borough of Barnet

EAT/473/93

. Our conclusions in this case are re-enforced by that Decision and are entirely in line with it. In particular we repeat and adopt the legal analysis from pages 10 onwards. As we explained to Mr Ryder, we have approached our own decision on the basis that we were free to follow or depart from the Bernette case. It is not, perhaps, without significance that the Pay Protection Policy negotiated with NALGO in that case uses language which makes it clear that it was intended to apply to transfers in a redundancy situation. Such clear language could have been used in this case, had the parties intended that result.

We indicated to Mr Ryder at the end of the argument that we would be dismissing the appeal. He asked us for leave to appeal, which we refused. It seems to us that there is no real point of law in this case, or if there is, it has no real significance beyond the interests of these two parties. We considered that we should refuse leave.