HM CUSTOMS & EXCISE v MR D D SAWDON [2001] UKEAT 0265_00_2706

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 0265_00_2706Case No Appeal No. EAT/0265/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
HM CUSTOMS & EXCISEAPPELLANTMR D D SAWDONRESPONDENT
Before
His Honour Judge J Altman Mr J R Crosby Mrs T A MarslandDate 27 June 2001
[1]APPEARANCES For the Appellant MR SIMON SALZEDO (of Counsel) HM Customs & Excise New Kings Beam House 22 Upper Ground London SE1 9PJ For the Respondent MR D D SAWDEN (The Respondent in person) HIS HONOUR JUDGE J ALTMAN This is an appeal from the decision of the Employment Tribunal sitting at Brighton on 4 October 1999 and from their decision that the Appellants made unlawful deductions from the Respondent's wages in respect of the 'AAA allowance' as it is described, for a particular period. This case concerns the entitlement to pay on the part of employees subject in general to civil service regulations when absent from work through sickness. There is no dispute in this case about the entitlement to basic pay but the issue relates to the entitlement to, what is called, the Annual Attendance Allowance, which is a sum of money calculated at the outset of a period, which we understand to be a year, to represent incidental payments to which an employee may become entitled by way effectively, of capitalising those payments as a sum which is then added in regular amounts to a persons pay.[2]There are three separate situations which we have had to consider. The first is the provision for normal sick pay. The second is the situation that arises where the sickness absence is due to an injury sustained during employment. The third situation is where, as a result of such an injury, the employee is likely to take proceedings for negligence against a third party.[3]The conditions of employment are to be approached in two ways in relation to contract and status. From a contractual point of view, on 17 May 1965 the Respondent entered into a contract with the Appellant, a copy of which we have seen, which provides:
"Full details of conditions of service ……..…. are contained in establishment instructions volumes 1 to 8, copies of which may be consulted."
In relation to the contract there is also specific provision for what is called 'sick leave' but which also provides for pay, pointing out that there is provision for the grant of sick leave on full pay, details of which are set out in establishment instructions. In addition to that and by virtue of the nature of the employment there is power to impose conditions by Order in Council. That has been done in a management code, which we have seen.[4]There has been some argument in the case before us as to the meaning of the term 'full pay' but it is clear that the contractual entitlement to what is there described as full pay appears to be deemed to be that which is contained in the establishment instructions. The civil service management code provides for the minister to make regulations and give instructions for what is described as "the control of the service", and it is to the documents produced in accordance with those two powers to which we have been referred.[5]The first question we have considered is the entitlement of the Respondent as an employee for what we would describe as 'ordinary sick pay'. That is contained in departmental instructions G3-4 Absence at page 15 which provides in Section 2 under the heading of Sick Leave, Sub Heading 2A, Sick Leave, and under Sub Paragraph 2.2 of that Sub Section under the heading 'What you are allowed' it states as follows:
"Sick leave is allowed provided there is a reasonable prospect of recovery and subject to the following rules: [In relation to this particular employment, provides that the sick pay allowance will be -] The appropriate amount of statutory sick pay within the limit of full pay. No more than 6 months in total on full pay during any period of 12 months. After that ½ pay (subject to a maximum of 12 months sick leave in any period of 4 years or less)."
That provides undisputedly the basis for sick pay. In addition to the entitlement to that pay there is also provision for entitlement to the AAA and that is provided for in departmental instruction G3-2 at paragraph 2.54 which provides for:
"Continuity of the AAA payment Payment of AAA will follow the guidelines for continuity of Shift Disturbance Allowance set out in para 3.16 to this book."
Paragraph 3.16 provides that where there is absence from work:
"(a) Conditions (iii) The total of temporary absences listed under (b)(ii) below [that is in the case before us for paid certified sick leave] which may attract continuity of payment will be limited to 60 days in any period of 12 months. Weekends occurring within a period of absence will count towards the 60 days limit, but weekends at the beginning or end of the period will not"
Accordingly it seem to us that the first category of absence, that simply due to sick leave, will attract, under the conditions of service, full pay for 6 months and half pay thereafter with the qualification that where there is reference to full pay it is to include the annual attendance allowance for only the first 60 days. The question that we have had to consider is whether that basic position is altered where there is absence due to injury.[6]We have been referred to a number of documents in respect of that. We have been referred to a guide to injury benefits, G3-4 paragraph 2.44 which is in the form of a question. "What benefits would I be entitled to if I am injured on duty?" And the main benefits include the first heading:
"Extension of paid sick leave Provided that there is a reasonable prospect of your recovery and return to duty, you will be allowed time off from work on full and reduced pay if you are medically incapacitated. Normally you are allowed 6 months on full pay in any period of 12 months followed by a period of half pay, subject to an overriding maximum of 12 months sick absence in any period of 4 years or less."
It seems to us that that is a reference to the provisions to which we have just referred, simply a descriptive statement as to what normal entitlement is. The provisions then go on:
"If your sickness absence is due to an injury or disease which qualified you to be considered under section 11 of the PCSPS the maximum period of sickness absence on full pay is increased by 6 months."
Section 11 of the PCSPS provides qualifying conditions for receipt of injury benefit payable by the pension scheme, not by the employer as such, in certain circumstances with which we have not been concerned. The reference to section 11 in the passage to which we have just referred is a means of defining a category of injury or disease to which the paragraph 2.44 applies. It can be seen that 11.3 describes a qualifying condition as relating to someone:
"(i) who suffers an injury in the course of official duty, provided that such injury is solely attributable to the nature of the duty or arises from an activity reasonably incidental to the duty."
There are other qualifying conditions. It seems to us inescapable therefore that the use of the reference to section 11 of the PCSPS is simply a shorthand means of incorporating within 2.44 the various categories that are otherwise set out in the pension scheme. A number of matters have been argued before us about the application of that provision. Is it a provision which incorporates AAA into the whole of the period of sickness absence? Or is it a particular provision which is simply a formula for extending such normal provision without altering its character? We are driven to the conclusion that it is the latter.[7]In the case before us it appears that after the Respondent made representations to the personnel and finance directorate of the Appellants they reviewed the matter, as they saw it, under the provisions of paragraph 9.6.2a of the civil service management code and construed the reference to full pay as including AAA throughout the whole of the 6 month period which was to give to the additional 6 month period a quality that was not shared by the normal basic rules. We are uncertain as to why that was done in the context of this case. It is submitted to us on the part of the Appellants that no concession is made that this was due to a legal obligation (and indeed, there would be no appeal if there had been). The civil service management code to which we have just referred provides in paragraph 9.6.2 as follows:
"If a member of staff is absent due to an injury sustained or a disease contracted in circumstances that satisfy the qualifying conditions for injury benefit under the Principal Civil Service Pension Scheme, department and agencies must: a. provide 6 months injury absence on full pay before normal departmental or agency sick pay arrangements are applied."
[8]When this matter was before the Employment Tribunal they saw a conflict between the clause 2.44 to which we have referred and the one that has just been quoted. In argument on behalf of the Appellants it has been suggested that in the event of any conflict we should look to 9.6.2 as being the essential document and the other as meaning to be simply an explanatory guide with no substantial contractual force. We do not have to respond to that argument in view of our findings, but if we did, we would say that both provisions are part of the contractual armoury with which the employee is provided by his employer. The fact that the employer has chosen to use one document to explain another does not, it seems to us, entitle the employer to rely upon that document most favourable to him. Nor indeed does it, in the event of conflict, it seems to us, entitle the employer to rely on a document because it is the management code rather than a contractual document. The normal construction in the case of a conflict or ambiguity that we would have applied would have been to construe those documents against those who preferred them. But we do not see any conflict at all between 2.44 and 9.6.2.[9]When the matter came before the Employment Tribunal, that Tribunal emphasised that at the end of rule 2.44 the words were "the maximum period of sickness absence on full pay is increased by 6 months". The majority provided as follows:
"This provision overrides "normal" provision and to a qualifying person like Mr Sawdon provides "full pay" for 12 months before the half pay provision commences. They (the majority) interpret "full pay" to mean basic pay plus any allowance so as to restore the person to the position he would have been in had he not been injured and performed his duties."
With the greatest of respect, we cannot share that interpretation. There is nothing within the documents before us, other than the concession made by the Appellants in relation to AAA during the initial 6 month period of the injury at work provisions, to suggest that full pay should be interpreted to include AAA. Indeed, if one goes all the way back to the contract of employment of the Respondent, the passage we outlined at the beginning, the term 'full pay', being the entitlement during sick leave, is specifically referred on to the establishment instructions to which reference has been made. It is clear that the full pay entitlement when someone is normally away from work includes the AAA for only the first 60 days. In those circumstances we see no reason to import into the code or the guidance an interpretation that is not reflected anywhere else in any of the provisions, and on its face it is contrary to the specific provisions about full pay contained within the contractual documents. Accordingly, we are driven to disagree with the majority of the Employment Tribunal. The passage we were referred to, 2.44, it seems to us, is a formula for extending payment over a period of time. It is not a provision that introduces, on the face of it, a new method of calculation of payment. It is described as "an extension" and it purports to be an extension of sickness absence on full pay. It does not purport to do more than increase the period for 6 months. Accordingly, it seems to us, it cannot be read to introduce any new type of means of calculation.[10]In argument before us the Respondent has taken a different point which we are bound to say has caused us some considerable thought. Following on from the provisions of paragraph 2.44 and the description of the extension of paid sick leave, first of all the Respondent points to the other benefits by reference to a temporary allowance and additional lump sum benefits. He points to the anomaly that would arise if the Appellants were correct that once his pay, whilst sick, goes down to being half pay, he will, if the Appellants are right, in effect end up better off because he will be in receipt of 80% of pensionable pay as an increase. Be that as it may, he has also drawn our attention to the section later on in that document under heading, 2.51, which deals with the third category to which we alluded at the outset of our judgment. That is where there is, first, sick pay through normal absence, secondly, due to an injury at work, and thirdly, where it is as a result of "accidents giving rise to the legal liability of a third party". It is important, it seems to us, to refer to that in full. It provides:
"(a) When an officer is absent from duty as a result of the action or negligence of a third party and proposes to make a claim against them for damages, the Department will normally make an advance of salary to the officer in lieu of Sick Pay (appendix U). This should be recovered from any damages paid subsequently to the officer. The period of absence will be recorded as sick leave. Pay advanced to officers will not exceed the sick pay that would have been had the absence been as a result of ordinary sickness. It will be advanced on the understanding that the officer will refund to the Department the total sum advanced less a part proportional to the officer's contributory negligence."
The purpose of that is, on the face of the wording, plain. It provides a means whereby the third party, if to blame for an accident, will have to pay for the loss of pay of someone in the Respondent's position and the Appellants will have an opportunity to recoup only so much as the third party pays. That is the position in which we are told the Respondent is and it is under these provisions that he himself made a claim. Under that paragraph (ii) provides:
"the officer may also make a claim for the estimated substitution pay and overtime loss during the period of the claim."
It has been suggested on behalf of the Appellants that that is to be read as simply a piece of advice given to an employee to remind him of his right to claim over and above his basic entitlement. We are not wholly confident that that is correct. Whilst that is technically a possible reading of it, and the word 'claim' is, as has been pointed out, generally referred to in these provisions as being a reference to the claim made by the employee against the third party, nonetheless it is all, it seems to us, 'wrapped up' in the procedure whereby the employee is expected to get a payment in advance from the Appellants.[11]However, two factors lead us to conclude that it cannot assist the Respondent in this particular case. He acknowledges that the word used as a basis for the claim he can make is 'overtime' and not AAA. We have noted that in the airport agreement which is the London Airports Guide to Annual Hours Working there is reference to the calculation of the Annual Attendance Allowance by reference to a number of different categories including an unsocial hours allowance, a flexibility allowance. It is true to say that whilst AAA may include a calculation for overtime, overtime does not include all the elements for AAA. Furthermore, we understand that not everyone in the civil service, not everyone subject to these provisions, is entitled to the Annual Attendance Allowance and may be entitled to overtime. Therefore it seems to us that when looking at the actual words of the agreement we cannot approach it as if it were poetry or literature and interpret overtime as if meant something else. We are driven to regard it as referring to that which it simply says, which is overtime. We are mindful of the fact that that does create something of an anomaly. As the Respondent has pointed out, it means in effect, that someone who has a discretionary and variable entitlement to overtime for which he gets an advanced payment is in a better position than someone who has had a regular contractual entitlement to AAA but which he may not be able to recover. However, it does not surprise us that there are anomalies from time to time flowing from these provisions. That must always be the case where one document is designed to cover the contractual position of an enormous variety of employment situations.[12]However, the second matter that also leads us to find against the Respondent is that the provision includes a ceiling; it says that:
"pay advanced to officers will not exceed the sick pay that would have been due had the absence been as a result of ordinary sickness."
Our analysis has already led us to conclude that sick pay due where the absence comes from ordinary sickness is for 6 months on full pay, 6 months on half pay with AAA for a maximum of 60 days. So even if potentially AAA could be included it cannot improve under those provisions on the position which the Respondent already had under the basic provisions.[13]For all those reasons therefore we have come to the conclusion that the philosophy of these rules, regulations and contractual provisions is to provide as it were an incremental means of calculation, not one that contains fundamentally different means of interpretation depending upon the category of sickness absence. The starting point is for ordinary sickness absence. The period of full pay is then extended where absence is due to an injury at work and there are circumstances in which advance payment can be made where there is a third party who is to be sued. Throughout that framework, it seems to us, there is not a variation in the basic means of calculation. Accordingly, payment falls to be made for only 60 days for AAA, which is, as we understand it, the payment that has been made during the second 6 months to which the Respondent was entitled to full pay during his sickness absence. We are not in a position to establish whether there is some contractual liability to make full pay including AAA throughout the first 6 months period but there is no need to do so because the practical situation is that it was paid in this case.[14]We would only conclude by saying that we have found these conditions and terms well nigh impenetrable. The need to move from one type of document to another for purposes of interpretation is bound to cause confusion. Where an employer seeks to clarify an agreement by putting it differently in other words, there is bound to be additional confusion and we have the utmost sympathy with any employee trying to get to know what his rights are. We are full of admiration for the way in which the Respondent in this case has taken all the real points that can be taken and whilst we find against him we do so with considerable respect for his ability to understand the terms of his employment.[15]The appeal is allowed. The finding that there has been an unlawful deduction from the wages of the Respondent is set aside.