HM PRISON SERVICE v MR C BEWLEY [2004] UKEAT 0455_03_2001

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0455_03_2001Case No Appeal Nos. UKEAT/0455/03/TM & UKEAT/0595/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
HM PRISON SERVICEAPPELLANTMR C BEWLEYRESPONDENT
Before
His Honour Judge Peter Clark Miss C Holroyd Mr D J JenkinsDate 20 January 2004
[1]APPEARANCES For the Appellant MS MONICA CARSS-FRISK QC The Treasury Solicitor (Employment Team) Queen Anne's Chambers 28 Broadway London SW1H 9JS For the Respondent MR JOHN HENDY QC Instructed by: Messrs Lees Lloyd Whitley Solicitors Imperial House 15-19 Kingsway London WC2B 6UN JUDGE PETER CLARK Mr Bewley, the Applicant before the Liverpool Employment Tribunal, was at all relevant times employed by the Respondent at HM Prison Liverpool. He worked within the Reception Area of the Prison in the Services 1 Group. He and his colleagues were involved in administering procedures for inmates coming in and leaving the Prison during the course of the day.[2]His Terms and Conditions of employment were the subject of a number of collective agreements made between the Respondent and the recognised Trade Union, The Prison Officers Association. In particular the union and employer entered into what was called the Voluntary Agreement dated 11 April 2001. Unusually, the parties to that Agreement agreed that it was legally enforceable. Schedule 1 to that Agreement included an Arbitration Procedure, set out at paragraph 9, for the resolution of disputes between the parties. The arbitrator was to be nominated by ACAS; he would regulate the procedure to be adopted at the hearing and by paragraph 9(3):
"The arbitrators decision will be in favour of either the Prison Service or the POA and he/she will not be able to issue any other decision."
[3]In other words the principle of pendulum arbitration applied. Both parties to the dispute, the subject of arbitration, present their respective cases and the arbitrator has to choose one or the other. He cannot reach a half-way position, drawing from both sides' cases.[4]A further National Agreement, collectively agreed, entitled 'Bulletin 8' laid down guidelines for shift attendance systems. Running prisons is a 24 hour/7 day a week operation.[5]In accordance with those Gudelines a Local Agreement was entered into in about 2001 regulating the shift system which the Applicant and others worked at the Prison. Employees worked a 34 week cycle during which, on either 38 or 40 occasions, the Applicant had less than 11 hours break between shifts.[6]By regulation 10(1) of the Working Time Regulations 1998 (WTR) an adult worker is entitled to a rest period of not less than 11 consecutive hours in each 24 hour period during which he works for his employer. The provisions of the Regulations applied to the Applicant.[7]However, Regulation 23(1) provides, so far as is material that a collective agreement may modify or exclude the application of Regulation 10(1). Such exclusion is sanctioned further by Regulation 35(1)(a). The Local Agreement expressly excluded the provision contained in Regulation 10(1).[8]In 2002 the shift system arrangements at the Prison were revisited. A dispute arose between management and the Union as to management's proposals for a different shift system, albeit that the new proposal involved some, but fewer, occasions on which the Applicant and his colleagues were permitted to enjoy a break between shifts of less than 11 hours than did the Local Agreement which the new proposed system was to replace.[9]That dispute went to arbitration in accordance with the procedure laid down in paragraph 9 of Schedule 1 to the Voluntary Agreement. Professor John Goodman was appointed Arbitrator by ACAS. Both sides submitted and exchanged written statements of case. A hearing was held on 4 July and on 15 July Professor Goodman published his award. He set out the rival cases which, on the Union's case, included a submission that management's proposals would impinge on Health and Safety legislation and some provisions of WTR.[10]In concluding that he accepted the management case the Arbitrator emphasized his terms of reference. He had to choose one side's case or the other's. That did not mean that every point made by the wining side was endorsed, nor that each point made by the losing side was invalidated.[11]Paragraph 15 of Schedule 1 to the Voluntary Agreement provided that the award made "will be implemented as if it were an agreement between the parties." It was implemented by the Respondent.[12]Mr Bewley then presented an Originating Application to the Employment Tribunal complaining of a breach of WTR in relation to rest breaks under Regulation 10(1). The Respondent resisted the claim on the ground, among others, that the Arbitrator's award was a Collective Agreement or part of a Collective Agreement which excluded or modified the application of Regulation 10(1).[13]An Employment Tribunal chaired by Mr D Reed held, by a decision with Extended Reasons (EWR) promulgated on 14 April 2003, unanimously that the award was part of a Collective Agreement but, by a majority, that that Agreement did not modify or exclude the application of Regulation 10(1). Accordingly the Applicant's complaint was upheld.[14]At a later remedies hearing, followed by a remedies decision promulgated with Extended Reasons on 18 June 2003, the Employment Tribunal unanimously awarded the Applicant compensation in the sum of £500.[15]We have before us 2 appeals by the Respondent and a cross-appeal by the Applicant.[16]In the first appeal (EAT/455/03/TM), the Respondent appeals against the majority finding in the liability decision that the award, albeit part of a Collective Agreement, did not have the affect of excluding or modifying the application of Regulation 10(1) WTR; the Applicant cross-appeals against the unanimous finding that the award was a collective agreement for the purposes of Regulation 23.[17]In the second appeal, EAT/595/03/TM, the Respondent appeals against the Employment Tribunal's award of £500 compensation to the Applicant.[18]We decided to take the liability decision first. Logically the order of issues requires us to consider first the Applicant's cross-appeal and then the Respondent's appeal. (1) Was the Arbitrator's award a Collective Agreement? Regulation 2(1) WTR provides that 'collective agreement' means a collective agreement within the meaning of Section 178 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A). It is common ground that the POA is an independent Trade Union within the meaning of Section 5 TULR(C)A. Section 178 provides:
"(1) 'In this act "collective agreement" means any agreement or arrangement made by or on behalf of one or more trade unions and one or more employers or employers' associations and relating to one or more of the matters specified below; … (2) The matters referred to above are – (a) terms and conditions of employment or the physical conditions in which any workers are required to work;"
[19]Mr Hendy QC submits that the relevant award is a finding of a third party, the arbitrator. It is not an agreement made by or on behalf of the POA and the Respondent. Whilst the parties are bound to accept the arbitrator's award they cannot be said to have agreed its terms.[20]The award is a consequence of the voluntary Agreement, itself a collective agreement; it is not part of that Agreement, nor is it a separate agreement within the meaning of the Section 178 definition imported into WTR by Regulation 2(1).[21]In support of that submission a number of possible analogies, not directly on point, were suggested in the written skeleton argument prepared in advance of this hearing by Mr Hendy QC and Mr Brown, including reference to the Scottish Court of Session decision on incorporation of terms in the individual employee's contact of employment in Cadoux v Central Regional Council [1986] IRLR 131 and to the deemed method of determining collective bargaining procedures by decision of the Central Arbitration Committee provided for in Schedule A1 to TULR(C)A, a process equally relied upon by Miss Carrs-Frisk QC in support of her principal contention that the Arbitrator's award itself constituted a collective agreement for the purposes of Regulation 23 WTR. In oral submissions Mr Hendy questioned the value of those references. We agree; they have not assisted us.[22]We have also been referred to the Advocate-General's opinion in Pfeiffer v Deutsches Rotes Kreutz (6 th May 2003 in Cases C - 397/01 to C-403/01.ECJ); Witley & District Men's Club v Mackay [2001] IRLR 595 ; Royal National Orthopaedic Hospital Trust v Howard [2002] IRLR 849 ; Adams v British Airways Plc [1996] IRLR 574 and Ali v Christian Salversen [1997] 1 All ER 721. Again, we do not find it necessary to analyse those judgments in the context of the present issue. They do not, in our view, lay down principles which assist us in this in this novel question of construction.[23]On the facts of the present case Mr Hendy drew particular attention to the way in which the union framed its case to the Arbitrator. The written case specifically referred to the length of breaks between certain shifts and stated:
"Therefore your [management's] proposals without collective or local agreement breach the National Working Time Directive (the law) and would give rise to you facing an Employment Tribunal with each and every case taken."
That submission was also reflected in the witness statement of Mr Traynor, Union Branch Chairman, called before the Employment Tribunal.[24]Thus, although Mr Hendy accepts that the union had no objection in principle to agreeing the exclusion of the Regulation 10(1) right, as had happened in the Local Agreement, it must be part of an overall package acceptable to the Union.[25]In the event no overall agreement was reached; the dispute went to arbitration and, although bound by the Arbitrator's award, it could not possibly be said that the Regulation 10(1) primary right was excluded by agreement; it was, on the contrary, expressly not agreed to by the Union.[26]Miss Carrs-Frisk's principal submission is that the award itself was a collective agreement. She contends that the Employment Tribunal was correct in so finding by this route. The parties to the Voluntary Agreement, itself, by common consent, a collective agreement, made provision for the resolution of disputes. They were, in the absence of agreement along the way, to go to binding arbitration. That was to be in the form of pendulum arbitration; a high risk strategy for each party in the sense that ultimately the Arbitrator was required, under his terms of reference, to accept the whole of one party's case and to reject that of the other.[27]The question of shift patterns was referred to the Arbitrator. There was no express reservation by the Union, taking it out of the area of dispute and into the mechanism of individual enforcement of rights under Regulation (10)(1) WTR.[28]The Arbitrator made his award in accordance with his terms of reference; making it clear that he would not otherwise necessarily have rejected the whole of the Union case nor endorsed the management case in its entirety. He did so conscious of the WTR point taken by the Union; one of the factors which, on the face of the award, he took into account in arriving at his ultimate conclusion.[29]In these circumstances she submits that the award was an agreement within the meaning of Section 178(1) TULR(C)A; alternatively it was plainly an "arrangement". On this latter point Mr Hendy chose to make no submissions, the point having been raised from the bench, without conceding that, if not an agreement, the award was an arrangement within the meaning of Section 178(1), both agreement and arrangement falling within the definition of Collective Agreement.[30]We accept Miss Carrs-Frisk's submissions. It seems to us that where the industrial parties enter into a collective agreement, here the legally enforceable Voluntary Agreement, which itself provides a mechanism for the final resolution of disputes between the parties (short of industrial action) in the form of binding pendulum arbitration, then both parties agree that the award made by the Arbitrator will itself constitute an agreement made between them.[31]Even if we were wrong in characterizing the award as an agreement, bearing in mind the express words of Clause 15, on which Mr Hendy relied, then that deemed agreement constituted an arrangement between the parties relating to workers' terms and conditions of employment or the physical conditions in which they were required to work within the meaning of Section 178(1) and (2)(a) TULR(C)A and was, by virtue of Regulation 2(1), a collective agreement for the purposes of Regulation 23 WTR. In these circumstances we reject the Applicant's cross-appeal. (2) Was the Employment Tribunal majority correct in finding that the award, although a collective agreement, did not, by virtue of Regulation 23 WTR, exclude or modify the provisions of Regulation10(1)?[32]It is convenient at this point to set out the reasoning of both majority and minority members reflected at paragraphs 28-30 EWR:
"28 The majority view was that the Agreement did not modify or exclude Regulation 10(1). It certainly did not purport to do so. It did not seem to us that it was apt to say that, simply because the award was inconsistent with the right provided for in Regulation 10(1), the agreement was modifying or excluding its application. On the contrary, it was providing for an arrangement that was in breach of Regulation 10(1) and it therefore fell foul of the restrictions on contracting out, set out in Regulation 35. 29 The majority was emboldened in that stance as a result of the way in which the agreement itself had come about. This was not a real agreement but more of a "deemed" agreement. There had been no consent, voluntary (sic) given, to the shift system imposed by the award (as opposed to consent being given to the mechanism whereby that award became part of the collective agreement). 30 The minority view was simply that the requisite modification could be inferred. If it was proper to regard the award as an agreement (which we considered it was), to the extent and so far as that agreement was inconsistent with Regulation 10(1), it should be inferred that the agreement was modifying or excluding the application of that Regulation."
[33]We say at once that we find the majority opinion inconsistent with the earlier unanimous finding of the tribunal that the Arbitrator's award was a collective agreement.[34]We accept Miss Carrs-Frisk's submission that nothing in Regulation 23 (nor indeed in the Council Directive 93/104/EC; see Article 17(3)) requires express provision in a collective agreement that its terms modify or exclude the application of Regulation 10(1). Mr Hendy submits that it must, at the least, be clearly implied from the collective agreement that the primary obligation on the employer to provide 11 hour breaks as specified in Regulation 10(1) was excluded or modified by that agreement.[35]In our judgment, it was. The issue of WTR primary protection was raised before the Arbitrator in the Union's case. He was made expressly aware of the Union contention that the proposed shift system breached the primary obligation under WTR. He nevertheless proceeded to make an award, in accordance with his terms of reference agreed by the parties in the Voluntary Agreement, which had the effect of perpetuating a shift system which included breaks between shifts on occasions which were less than 11 hours.[36]Thus there was to be implied into the award, on its face, the exclusion or modification of the application of Regulation 10(1); something which had been expressly agreed in the earlier Local Agreement. We can see no distinction in principle between that which was expressly agreed between the parties in 2001 by way of the Local Agreement and that which necessarily falls to be implied from the award; itself an agreement or arrangement between the parties falling, as the Employment Tribunal unanimously found, within the Section 178 definition of collective agreement.[37]In these circumstances we find ourselves entirely in agreement with the minority view expressed at paragraph 30 of the Employment Tribunal's Reasons. The Respondent's appeal succeeds. The Remedies Appeal[38]Having announced our decision on the liability appeal and cross-appeal in favour of the Respondent it followed that the Employment Tribunal's liability decision must be set aside. Having set aside the decision on liability it also followed that the sub-stratum of the remedies finding had been removed. There can be no remedy without liability.[39]In these circumstances the interesting questions to be debated in the Respondent's remedies appeal became moot. We indicated that we did not propose to embark on that academic exercise.[40]Accepting that ruling, it was common ground between Counsel that the appropriate order to make on the remedies appeal was no order. In this way the Respondent's arguments against the Employment Tribunal's remedies decision remain open for debate in the event that this case goes further and it is found elsewhere that the Applicant has established liability under WTR. Summary(1) The liability appeal by the Respondent is allowed and the order of the Employment Tribunal set aside.(2) The liability cross-appeal by the Applicant is dismissed.(3) The Applicant's complaint is dismissed.(4) There be no order on the Respondent's remedies appeal.