MR J LAND v BIRDS EYE WALLS LTD [2002] UKEAT 1441_00_1203

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1441_00_1203Case No Appeal No. EAT/1441/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR J LANDAPPELLANTBIRDS EYE WALLS LTDRESPONDENT
Before
Lord Gladwin of CleeDate 12 March 2002
[1]APPEARANCES For the Appellant MR ANDREW SHORT (of Counsel) Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE For the Respondent MR RICHARD LEIPER (of Counsel) Messrs Mason & Co Solicitors Bridge Street Bakewell Derbyshire DE45 1DS MR COMMISSIONER HOWELL QC This is an appeal by Mr Joseph Land against the decision of the Bristol Employment Tribunal quantifying the method of calculation of the compensation to which he was entitled for what the Tribunal had earlier held to have been a breach of contract on the part of his employer, Birds Eye Walls Ltd, the Respondents to his appeal before us.[2]The proceedings before the Tribunal had been brought by Mr Land by an Originating Application dated 9 August 1999. The breach of contract he alleged arose on the termination of his employment which took place on his early retirement on 31 May 1999, having been in the employment of the Respondent since 24 May 1974. All of his complaints related to the manner of calculation of the salary or remuneration to be taken into account for the purposes of his pension under the company's pension scheme which is now part of the Unilever Group Pension Scheme. Mr Land was a Line Technician who had been in this employment, and a member of the final salary pension scheme, for some twenty five years by the time he took retirement.[3]The Tribunal in its first decision determined the issue of liability. That decision is not subject to appeal before us so that the Tribunal's findings recorded in that decision are to be taken as conclusive between the parties for the purposes of this present appeal. In that decision the Tribunal determined, after a hearing on 22 March 2000 and for reasons set out in the Statement of Extended Reasons sent to the parties on 17 April 2000, that there had indeed been a breach of contract for which the Respondent was liable to pay compensation to Mr Land. However, the basis of the compensation was not (except in one respect to which we will refer) determined by the Tribunal at that hearing. By consent, the hearing was adjourned to give the parties an opportunity of attempting to agree the financial consequences of the Tribunal's decision, with directions that either party might apply to restore the case for further hearing if an agreed basis was not possible to arrive at. In the event it was not, so that the matter had to come back before the Tribunal again on 19 September when the Tribunal gave its second decision, which is the one under appeal to us, contained in Extended Reasons sent to the parties on 10 October 2000, giving directions as to how the compensation should be calculated in detailed terms to which we will have to refer in a moment.[4]The basis of the liability is important. The history of the matter is admirably summarised in the first statement of reasons by the Tribunal. The following summary can be taken more or less word for word from that. How this arose was that - in the Tribunal's words:
"2 Prior to 1986 the applicant was employed on variable shift work, remunerated with basic pay and shift pay. For the purposes of his pension entitlement, each of those two elements of his remuneration would be taken into account as pensionable pay "(PP)". 3 In 1986 the basis upon which the respondent's employees were remunerated was changed and shift pay was taken out of the calculation of PP. In order to compensate those employees who were at that time over the age of 50 years (which included the applicant) each of them, including the applicant, were paid an additional sum representing 13.8% of basic pay, that percentage representing the loss to the applicant of the shift pay to the calculation of PP: that element, the protected element, is referred to in this decision as "
PE". 4 Between 1986 and 1991, there were various increases in basic pay and shift pay and in order to maintain the correct level of PP, the PE was increased annually in line with the other increases. We interpose, that in paragraph 3 of their Extended Reasons, the Tribunal appear there to have recorded that the employees were actually paid an additional sum; but the appeal with which we are concerned is only related to a claimed entitlement to have an additional sum of "PE" included in the calculation of remuneration for pension purposes and no question appears to have arisen before the Tribunal or before us as to a separate entitlement to additional remuneration. The Tribunal continued: 5 In 1991 the respondent brought shift pay back into the calculation of PP. When it might have been logical for the respondent at this stage to have abolished PE, bearing in mind the reason for its introduction in 1986, it did not and after 1991, therefore, PP was calculated on the basis of an aggregate of basic pay, shift pay and PE. 6 In 1997 there was a major restructuring of the way in which the respondents' production at its Gloucester factory was managed and remunerated by the introduction of what was called flexible continuous operations ("FCO"). Broadly, FCO abolished overtime and put all employees onto a rolling shift pattern involving core hours and shadow shifts (when employees were, effectively, on call). This resulted in continuous productivity, a reduction in individual employee working hours (in order to comply with the impending Working Time Regulations) and an increase in pay scales. 7 The issue of PE affected only some eight or nine employees out of a work force exceeding 1,000. The proposed removal of PE from the remuneration package of FCO was an issue that the applicant, and his colleagues similarly affected, resisted with the assistance of their union. For perfectly good commercial reasons, the respondent "parked" the issue in order to ensure that the substantive proposals of FCO, as regard the remaining work force, would not founder. 8 By a letter in early March 1998 to the applicant, the respondent drew attention to the proposal that PE would come to an end under the new FCO arrangements: an offer of £1,500.00 was made to the applicant as a consideration for ending the PE arrangements. The applicant refused the offer in writing to the respondent on 13 March 1998. 9 The FCO published provisions specifically note that PE would be addressed as a separate issue." We interpose there that it was common ground before us that the "FCO published provisions" there referred to were the collective agreement which was in evidence before the Tribunal and is before us in the bundle of documents with which we have helpfully been provided.[5]The Tribunal's decision then records that terms were negotiated for Mr Land to take early retirement, and that there was discussion about alternative pension proposals on the termination of his employment; but that subsequent to the termination of his employment he had raised the issue of PE, claiming that it had not been taken into account in establishing the pensionable pay on which his pension calculation was based, and as a result he had been deprived of a pension entitlement that was due to him. The Tribunal then recorded as findings of fact of their own that:
"13 We find that between 1986 and 1991 the applicant's contractual entitlement to remuneration was a right to basic pay and shift pay. So far as PP was concerned, however, he was also entitled to an additional notional sum of 13.8% of his basic pay, increased pro-rata with year on year increases to the basic pay. 14 We find that after 1991, notwithstanding the reintroduction of shift pay into the calculation of PP, the continued inclusion of PE (calculated and increased annually as hitherto) in the calculation of PP became a free standing contractual right. 15 We find that after the introduction of FCO in 1998, the issue of that free standing contractual right to PE was in the minds of the parties and the subject of dispute, a dispute that was never resolved prior to the termination of the applicant's employment. 16 We find that any agreement that the applicant reached as to the terms upon which his employment came to an end, was without prejudice to that outstanding issue."
The Tribunal finally recorded a most important finding, which was the subject of some argument before us, in the following terms:
"17 We find, finally, that the free standing contractual right of the applicant to a PE of 13.8% of basic pay: for the sake of clarity, we find that the entirety of the FCO remuneration package is NOT relevant to the calculation of PE, but only part of it as represents basic pay. The respondent is in breach of the terms of the applicant's contract of employment in failing to take PE into account when calculating PP upon the termination of his employment."
[6]The somewhat technical terms used by the Tribunal in relation to the documents on the issue on which they found in favour of the Applicant are more easy to understand when one looks at the two particular documents themselves. First of all, the FCO agreement, which is at pages 120 to 146 of the bundle of documents before us, is a collectively negotiated agreement. The copy we have has the initials of the AEEU trade union at the top of it, with a date at the end of 1997. The agreement itself provided expressly that it was to become effective from 1 January 1998. It was an agreement which set out objectives and principles for a transfer to a more flexible system of working, in exchange for which the previous pattern of remuneration by reference to separately calculated fixed, basic and overtime rates was abandoned and one consolidated rate of remuneration was introduced for employees generally. It was provided expressly by Section 1 of the FCO agreement that:
"The terms and conditions contained within the 12 schedules of this [agreement] replaces all previous agreements, understandings or customs and practices unless explicitly stated in Section 10."
Section 2 of the agreement provided for a working hours arrangement under which employees were to have an annual hours contract providing for 1740 hours per year plus an additional number of hours which were referred to as hours attributable to "Shadow Shifts" which were shifts for which the payments were to be consolidated into the total remuneration paid to the employee. These were a total of either 96 or 192 hours in the working year where an employee might be required to attend for work, possibly on a more intensive basis at some parts of the year than at others. It might be the case that the employees would not be required to attend for the full amount of those hours during the course of the year at all, but nevertheless, the consolidated amount would still be paid to them as part of their total remuneration. It was provided specifically that no hours beyond the potential totals of 1836 and 1932, depending on the employee group, would be worked. Nothing turns on the exact number of hours attributable to Mr Lane who was a Line Technician except to note that he was subject to the 'shadow shift' working arrangement.[7]Under Section 8 of the agreement there were provisions about salary and grade structure. It was provided that:
" Payment of Salary Annual salaries are fully consolidated and take full account of working arrangement payments and payments for time off, including holidays and bank holidays …."
And expressly that:
"No other payments or working allowances will be made."
There then followed a heading 'Pensionable Pay' where it was stated that:
"The FCO salary figures represent full pensionable pay, from which pension contributions and associated benefits are derived …"
There was a forward reference to Section 9 which was a section headed 'Protected Pay Arrangements' but it was common ground before us that those particular protected pay arrangements did not affect Mr Land. What did potentially affect Mr Land was the existing protected pension arrangement referred to by the Tribunal as the PE arrangement. That was expressly provided for in Section 12 of the agreement under the heading 'Other Items' in the following terms:
"Protected Pension arrangement. Those affected by 1986 Agreement (approx. 9 people) will be addressed outside this agreement."
We were told that when matters came to be considered there were in fact somewhat fewer than nine employees in all affected by the 1986 agreement in the same way that Mr Land was, but nothing turns on that.[8]The only other document it is useful to refer to at this stage, which was also in evidence before the Tribunal, was the 1998 edition of the rules of the UNILEVER Superannuation Fund, which is before us at pages 62 and following, of the bundle. For present purposes it is only necessary to look at the definitions of Final Pensionable Pay, which is what the calculation of an employee's pension entitlement depends on, applying a formula by reference to an amount separately defined as "Pensionable Pay", and Pensionable Pay which is said to mean, subject to exceptions which do not matter for the present purpose:
" … the basic salary or wages payable to a Contributor by his Employer, together with such other emoluments as the Employer may decide."
The documents before us show that that edition of the pension fund rules incorporated amendments up to and including those made by a deed dated 21 January 1998, and were expressed to apply with effect from 6 April 1997. There was no evidence before the Tribunal, or indication before us, that any amendments incorporated in that version of the scheme rules, and in particular any amendments to the definitions of final pensionable or pensionable salary, had been made so as to implement or reflect provisions of the FCO agreement which had been concluded only very shortly before.[9]As we have said, the parties were unable to reach agreement on how to calculate what the Tribunal, in paragraph 17 of their Extended Reasons for the first decision, had sought to identify as "such part of the FCO remuneration package as represented basic pay", and the matter had to come back before the Tribunal for that issue to be argued and determined. In their second decision set out in Extended Reasons sent to the parties on 10 October 2000 the Tribunal reached the conclusion that the compensation to be paid for the failure to provide Mr Land with the benefit of his protected pension right was to be calculated by reference to a total assumed pensionable pay of £27,209 at the date of termination of his employment. In fact, the total amount of his remuneration as at that date was £26,800, which was the amount of total remuneration calculated and paid to him in accordance with the collective FCO agreement including or consolidating any amounts which previously might have been payable to him either by way of fixed or basic salary, additional payment for shift work and/or overtime working.[10]The Tribunal's reasons for reaching that figure were explained in their second Extended Reasons as follows. They referred first, in paragraph 3, to their previous decision promulgated on 17 April 2000 and recorded that:
"3 … We found that the applicant's remuneration immediately prior to the termination of his employment comprised a number of elements namely basic pay, shift pay and pay for shadow shifts. 4 Basic pay is, effectively, pay for the basic hours worked. Shift pay was a fixed sum of £5,540 paid to all employees required to work on shift, as a payment to compensate them for the unsociable hours required in doing shift work. Shadow shift pay was additional remuneration arranged under FCO as an alternative to overtime. Shadow shifts were flexible in terms of hours worked. 5 On the basis that the applicant had reserved his contractual positions as regards PE, we are asked to determine what sum represented basic pay as at the date of termination of his employment and to determine to what sums PE should be applied."
The Tribunal then recorded their findings on that as follows:
"6 We find that the applicant's salary immediately prior to the introduction of FCO was £18,125 per annum. Following two salary increases, his salary at the date of termination of his employment was £19,042."
We interpose there that there can be no doubt, and there was no dispute before us, that when the Tribunal are there referring to "salary" what they mean is the fixed or basic element in Mr Land's remuneration calculated on the old basis. The Tribunal continued:
"7 We find that it was custom and practice for the respondent to include shift pay in the calculation of final pensionable pay, but exclude it from the calculation of basic pay. Accordingly, we apply PE of 13.8% to the basic pay of £19,042 giving a figure of £21,669. For the purposes of calculating final pensionable pay, therefore, we add shift pay of £5,540 creating a protected pay element for pension purposes of £27,209."
Again we interpose, that there is no dispute that the appropriate percentage rate under the previous protected pension calculation arrangements which applied to Mr Land under the old formula was a 13.8% uplift applicable to the basic element in his pay. The Tribunal then rejected an argument which had been put before them by counsel for Mr Land that some additional amount should be included in the calculation, in the following terms:
"8 The applicant's representative argued that since the entire FCO remuneration was treated as pensionable pay as regards the applicant's colleagues, the correct calculation should be the applicant's entire FCO remuneration plus PE. We reject that argument on the grounds that the applicant had specifically refused to commute his PE entitlement and agreed to a contractual arrangement that so provided, seeking to preserve the PE element as a free standing contractual right in accordance with our earlier finding. Since PE, prior to FCO, was applied only to basic wages, we see no contractual authority for suggesting that, in these particular circumstances, that position should change or indeed, were we to do so we would be deciding contrary to the findings in our earlier decision."
On that basis the Tribunal ordered the Respondents to pay to the Applicant such sum as represented his contractual entitlement to pension on the basis of a "final pensionable pay" of £27,209. For the avoidance of doubt we ought to record that that means pensionable pay at the date his employment terminated, and not the specifically defined way of calculating Final Pensionable Pay for the purposes of the pension scheme itself.[11]Against that decision Mr Land appeals, on the grounds set out on his behalf in a Notice of Appeal dated 20 November 2000 in the appeal file before us. It had been professionally drafted for him by counsel who appeared before the Tribunal on the second hearing and has not been amended, although it is fair to say that Mr Short, who appeared on behalf of Mr Land on the appeal before us, formulated his submissions in his skeleton argument, and in his oral submissions to us, on a somewhat different basis than the assumptions underlying the original Notice of Appeal. In the circumstances, since Mr Leiper, who appeared for the Respondent on the appeal, did find himself able to deal with the somewhat different basis on which the case was now being argued, we did not think it right to exclude Mr Short from arguing the case in the somewhat different way he thought it was right to do. Accordingly, we have not separately considered whether or not the argument helpfully summarised to us really did or did not stray beyond the literal terms of the original Notice of Appeal. We have thought it right to deal with the contentions made to us by both sides on their merits as the contentions were made today.[12]Mr Short's submissions can be summarised by saying that the Tribunal had erred in two principal ways. First of all, that they had misdirected themselves or adopted a perverse and incorrect construction of the terms of the FCO agreement in not holding that Mr Land was entitled to whatever was due to him under the old PE formula, in addition to having the benefit of the enhanced pension calculation applying to employees under the FCO agreement after 1 January 1998, even though this included adding in the increased total remuneration as all counting as pensionable pay for the purposes of the pension scheme. That arrangement, Mr Short said, applied in any event to all employees without reservation as a matter of construction of the FCO agreement. Accordingly, Mr Land was entitled to take the benefit of that, and in addition, claim whatever was due to him under a proper calculation of the old PE guarantee he had been entitled to as a matter of contract hitherto. In its boldest form, this argument amounted to saying that on the true construction of the documents the whole of the consolidated remuneration under the FCO arrangement, that is the whole of Mr Land's total remuneration of £26,800 at the date of his employment terminating, became the equivalent of "basic salary" for the purposes of calculating the PE uplift with the consequence that Mr Land became entitled to a total of 113.8% of his total actual remuneration for pension purposes. Alternatively, it was submitted, that an amount within the total remuneration of £26,800 had to be identified as "basic salary" for the purposes of the PE calculation and the equivalent of 13.8% of that added to the full £26,800 so as to give some intermediate figure instead of (as the Employment Tribunal had done) carrying out two separate calculations, one on the old basis and one on the new, and giving him the better of the two.[13]The second main submission that Mr Short made to us on behalf of Mr Land was that further, or alternatively, the Employment Tribunal had been perverse or unreasonable in the way they had done the calculations, even accepting that they had to be done on the basis of selecting one of two alternatives as they did. In particular, it was argued, that in identifying the equivalent figure for a notional basic salary as part of the total consolidated remuneration under the FCO arrangement, they had picked the wrong figures and based themselves on too low an amount. That was put in various ways in the skeleton argument by reference to alternative suggested methods of calculation all designed to produce higher figures than the Tribunal arrived at, but all, for the purposes of today's proceedings, can be seen to have been based on an attack on the Tribunal as having been perverse in the figures they selected. In particular, first, in selecting as their starting figure the actual basic salary under the old arrangements before 1 January 1998 (which was the last figure to which the PE amount under the old guarantee had actually been applied) and projecting that amount forward by adding notional pay increases of 3% and 2% in the two successive years, which the evidence had shown would have been awarded but for the fact that everything had been rolled up in the FCO arrangement; and/or having been perverse in taking, as a figure for shift pay, a fixed sum of £5,540, as they did, on the assumption that this was something paid to all employees when in fact if was not.[14]In those two ways, Mr Short said, the Tribunal had acted perversely and unreasonably. The only reasonable way for them to have done the calculation was to have taken the full £26,800, which was the total amount of Mr Land's remuneration as of the actual date of his employment coming to an end, and subtract from that only such amounts, for example, amounts for the shadow shift arrangement, as were positively shown by the evidence to have been equivalent to the fluctuating part of the employee's total emoluments which had never, on any footing, qualified for the projected percentage increase under the old arrangements.[15]We have carefully considered these arguments, but we have concluded that the arguments to the contrary, by Mr Leiper, on behalf of the Respondent, are correct. In the first place, in our judgment, it is not correct as a matter of law to say that on any reasonable construction of the FCO documents the Applicant had been awarded any additional contractual entitlement to the inclusion of any extra amounts in the pension pay calculation that he had not possessed before FCO arrangement was entered into. Mr Short conceded, first, that to establish the additional contractual entitlement he was contending for, it was necessary to rely on the FCO documents themselves as having created it, because, on any footing, what he was arguing for was more than Mr Land had previously been entitled to under the old formula including the PE increase. Secondly, he conceded that the documents before us, and in particular the collective agreement at pages 120 to 142 of the bundle, were the documents before the Tribunal from which the additional contractual entitlement he was arguing for had to be derived as a matter of construction.[16]Approaching the matter as one of ordinary construction of the documents in the context of the Tribunal's findings as to the nature of Mr Land's previous entitlement and what led up to the conclusion of the FCO agreement, it is, in our judgment, clear that the documents cannot bear the meaning that Mr Short contended for. In the first place, there is the express provision in Section 1 of the agreement, on page 122, that it is to replace all previous agreements, understandings, customs or practices unless explicitly stated later. Secondly, there is the express provision in Section 8, on page 134, that all salary and other elements in remuneration are to be consolidated into one figure, that no other payments or allowances will be made and that it is that consolidated figure, and no other, that will constitute pensionable pay for the purposes of the pension arrangements. Thirdly, the express provisions for persons subject to the existing protected pension arrangement in Section 12 of the agreement make it quite clear, in our judgment, that the only relevant exclusion from the general principles of the FCO agreement is as regards the pension calculation for certain employees, those affected by the 1986 agreement, including Mr Land, and that as regards those employees the whole of their pension arrangements were to be addressed outside the present agreement. That, in our judgment, follows clearly from the fact that what is expressed to be excluded is those people and not simply a particular element in their pension calculation.[17]Accordingly, we agree with Mr Leiper that the effect of the express provisions of that document was to exclude this category of employee altogether from the general provision that the new consolidated FCO salary would automatically constitute the pensionable pay for the purposes of the pension scheme. In our judgment, the consequences of the introduction of the new pay arrangement on employees who had previously enjoyed the protected pension arrangement, remained to be separately negotiated (in the words of the first Employment Tribunal, 'parked' for the time being as an issue, so as to enable the basic and obviously collectively agreed provisions of the FCO agreement to take effect). At the very least, in our judgment, those provisions of the agreement clearly negate any idea of there having been, by that stage, a concluded agreement that Mr Land, and those in a similar position affected by the 1986 arrangement, were to be given some additional contractual entitlement to some further defined uplift, in addition to the general entitlement under the FCO formula, and in addition to what they had previously been entitled under, what the Tribunal found, was their freestanding contractual PE arrangement. We reject a suggestion made to us by Mr Short that Section 9 of the agreement, headed 'Protected Pay Arrangements' had any bearing on this issue. It, in our judgment, plainly related only to a separate head of protected arrangements, which, it was conceded, had no application to Mr Land; and the paragraph referring to pensionable salary under the heading of protected pay arrangements was confined to those separate arrangements and did not apply to him.[18]Accordingly, in our judgment, the Tribunal did not err in their basic premise that the protected entitlement had to be calculated separately by arriving at the nearest practicable equivalent to the old method of calculation by reference to the basic element, using that word in its original meaning under the 1986 arrangements, in the employee's actual remuneration after 1 January 1998. We think they were further right in approaching the matter on the basis that the effect of the freestanding contractual right, which they had found to exist in their first decision, was to give the employee the continuing right to whichever was the better of the two calculations taking those calculations as a whole, and not to pile elements from one calculation on top of elements from the other, so as to arrive at a higher figure. The basic approach adopted by the Tribunal in paragraph 7 of their Extended Reasons for their second decision was, in our judgment, not therefore erroneous in law.[19]Moving to the second head of Mr Short's submissions, as to the way they carried out the calculations and the figures they chose for the elements contained in it, we again accept Mr Leiper's submission that it cannot be said that they erred in law. In the first place, in our judgment, it cannot be said that the points advanced under this head in any way depend as any point on construction of the FCO agreement itself. The argument is, therefore, simply that it was perverse to select and quantify the particular elements they did: in particular, the fixed sum for shift pattern working of £5,540, the application of only 3% and 2% additions for notional cost of living increases to an assumed continuing basic salary based on the previous fixed salary level, and the Tribunal's rejection of the method of starting with the total remuneration of £26,800 and subtracting from that only the shadow shift elements before up-rating the result again by the full 13.8%. All of those points, in our judgment, founder for the same reason. As Mr Leiper pointed out, they all relate to questions of factual judgment and degree which were for the Tribunal themselves to determine as part of the exercise of identifying what were in fact the amounts that corresponded under the new arrangements with the original way the protected element formula had been calculated and applied to the Applicant's remuneration. On all of them, the figures selected, though arguably open to some factual or mathematical debate, were, in our judgment, justified ones for the Tribunal of fact to adopt. They were all supported by evidence before them which they were entitled to accept.[20]As regards the assumption of a shift element of £5,540 as an equivalent part of the total package of remuneration rather than some higher amount, the Tribunal had before them the evidence of Mr Joyner, in his statement of 19 September 2000, used for the purposes of the remedies hearing, giving the correct up-dated figure of £5,540 as applicable from 1 April 1998. As he said in paragraph 5.4 of that statement, this was a defined amount for shift pay for other groups of employees on the site working an FCO shift pattern similar to that of Mr Land, including people at managerial grade, and his evidence was that it was therefore logical to use that same £5,540 as notional shift pay in relation to Mr Land: this was a payment made to such staff irrespective of their grade. That was supported by a letter dated 14 April 2000, also in evidence before the Tribunal at the second hearing, from Ms Kidley of the legal department of UNILEVER, who has experience and knowledge of the particular figures and workings under the pension scheme, which explained that the shift pattern was equally onerous for all regardless of grade and therefore a standard shift rate was paid, so that amount was appropriate. On the basis of that evidence the Tribunal were, in our judgment, plainly entitled to conclude that £5,540 was an appropriate figure to include in the total remuneration package as the equivalent of the shift allowance Mr Land had formerly received.[21]Similarly, with the selection of the initial basic figure of fixed remuneration prior to 1 January 1998, and applying to that two successive annual percentage pay increases, the Tribunal's approach was justified by the explanations given in that letter and in the statement of Mr Avery, the trade union shop steward, submitted on behalf of Mr Land himself, dated 13 September 2000 at pages 28 to 30 of the bundle. This showed that the practice had been, prior to the introduction of FCO, that annual pay rises had been negotiated by reference to the rate of inflation and that in Mr Avery's calculation they would have been about 3% per year. That was supplemented by Ms Kidley's letter which recorded that in the second year the actual increase by the company in July 1998 had in fact been 2% rather than 3%. On the basis of that evidence before the Tribunal, again, they were justified in approaching the issue of basic pay and annual up-ratings in the way they did.[22]Finally, the exclusion of the shadow shift payments and the rejection of the suggestion that the calculation should be done by simply subtracting the equivalent of those from the full £26,800 was justified by paragraph 6 of Mr Joyner's statement, which explained that those shadow shift arrangements did not represent either basic pay or the previous shift allowances but had been a substitute for previous overtime payments which had not qualified for pension purposes at all.[23]We therefore concluded that no error of law has been demonstrated in the Employment Tribunal's approach in their second decision to the calculation. We conclude by noting that their calculation, that the pension should be calculated by reference to a final year's salary of a notional final salary figure of £27,209, still does give Mr Land a considerably enhanced pension which is based on significantly more than the total of the actual remuneration he was in fact receiving in the year when his service came to an end. In that, he may, in our view, be said to have done well. For those reasons we unanimously dismiss this appeal.