Simpson v London Borough Of Hackney & Ors (Contract of Employment : Damages for breach of contract) [2012] UKEAT 0104_12_2910

EAT
Simpson v London Borough Of Hackney & Ors (Contract of Employment : Damages for breach of contract)
[2012] UKEAT 0104_12_2910 · 2012-10-29
[1]This is a contract case involving what is said to be an entitlement to a job evaluation and the consequences of such an exercise. This is the Judgment of the court to which all members appointed by statute for their diverse specialist experience have contributed. This is no empty suggestion, since this case was earmarked by Langstaff P for hearing before a three‑member court, it having originated before Employment Judge Henderson, sitting alone, because he considered that this matter warranted the careful attention of a three‑member court, who have all invoked our experience of collective bargaining and job evaluation. Introduction[2]It is an appeal by the Claimant in those proceedings against a reserved Judgment of Employment Judge Henderson, sitting alone at London Central. She sat for three days in October and resumed on 21 November 2011 to hear further argument. The Claimant has been represented by Mr Robert Amey, giving his services under the Free Representation Unit. The three Respondents were represented by Ms Kym Beeston, Hackney’s solicitor, who has today instructed Mr Caspar Glyn QC.[3]The Claimant contended that she was entitled to a rate of pay that we will call grade 6 from before the date of its implementation at least back to her first request for a job evaluation or reconsideration of her pay. The Respondents denied that she was so entitled from any date earlier than the date when she was so re‑graded. The issues[4]The issues had been mapped out at previous case management discussions, and they are set out by the Tribunal:
“The Case Management Order of 6 July 2011 listed the following issues: General Whether it was an express term of the employment contract that the Respondent would carry out a job evaluation and if it was, had that term been breached? A further issue emerged during the October Hearing dates, namely whether there was also a term (express or implied) in the contract of employment that the pay for the reassessed scale (Scale 6) should have applied from an earlier date (namely the date on which the request for re‑evaluation had been made)? The Claimant said that even if there was no express term, such a term should be implied to make practical sense of the contract. Alternatively, the Claimant said that such a term was implied by custom and practice. If the Respondent had breached such terms of the contract of employment, was there a properly payable payment outstanding to the Claimant (section 13(3) (ERA [Employment Rights Act]) entitling her to a declaration for unlawful deduction of wages (section 24 ERA). If the Tribunal found in the Claimant’s favour, which of the Respondents was liable? The claim for notice pay was settled by the parties on the morning of 18 October 2011 and that claim was withdrawn: dismissal of that claim being conditional on the Respondents paying the agreed sum Jurisdiction Was the claim for unlawful deduction of wages out of time? When was the last payment/deficiency in payment due? Under section 23(3) ERA – the three month time limit would run from the last payment in such a series? Breach of contract – was there a claim arising or outstanding as at date termination of employment. (Regulation 3(c) Employment Tribunals Extension of Jurisdiction Order 1994 [EJO]). It was agreed that 31 May 2011 was the date on which the Claimant’s employment ended, when she took voluntary redundancy.”
[5]The Employment Judge decided that the claims for unauthorised deductions contrary to Part II of the ERA 1996 , and breach of contract upon the termination of her relationship under the 1994 EJO both failed. The Claimant appealed. On the sift of this matter the President decided that the case should go to a full hearing, indicating therefore that it had reasonable prospects of success.[6]There is a cross‑appeal by the Respondents contingent upon the success of the Claimant’s case, which involves what we will describe as a public‑law challenge and which we have heard in full, so we are able to give a view on that too. The legislation[7]The legislation is not in dispute. Part II of the ERA entitles a Claimant to make a claim within three months of an unauthorised deduction from her pay. Where there is a series of deductions, time runs from the last in the series, and there is a discretionary extension where that is not reasonably practicable. The issue in this case as to time relates not to the claim for underpayments, but to the failure fully to implement what was awarded to the Claimant at one stage by way of increments. It is contended by Mr Amey that those unauthorised deductions continued up to the termination of the relationship in May 2010.[8]The EJO entitles a Claimant to bring a claim for outstanding contractual liabilities on the date of dismissal. The claim was made in time. The practical difference is that the latter is capped at £25,000, as it has been for almost 30 years, and that may be a consideration in this case, but to all intents and purposes the statutory claims run hand in hand and cover the same territory. The facts[9]The Claimant is a bilingual teaching assistant. She was employed by the London Borough of Hackney, the First Respondent. The school she was engaged at was Grazebrook Primary School, by its governing body. The Learning Trust is a private company which carries out educational services for Hackney by order of the Secretary of State. There was a dispute as to who was the effective employer, the Respondents jointly saying the proper Respondent was the school and the Claimant saying it was Hackney.[10]The Claimant started work on 4 October 2004 on what is described as grade 1. There is much confusion about the language of grade, scale and spine point, but we can simplify it and say that she was on grade 1 when she started and ended on grade 6, having been promoted to grade 3 towards the end of her career. In February 2005 she orally sought a job evaluation; no substantive action was taken. More than a year later, on 8 May 2006, she wrote to the headteacher of the school requesting a job evaluation; no substantive action was taken then either. A new headteacher came in, but threats of legal action if no job evaluation was carried out proved fruitless.[11]In March 2008, no job evaluation having been carried out, the Claimant’s pay was upgraded to grade 3. This was at the same time as she had been awarded higher‑level teaching assistant status. We will correct the Judgment at paragraph 18 to record the correct title. Mr Amey told us without opposition that effectively that is recognition for past service and requires no examination or training. Meetings were held. The Claimant involved her union representatives, who have assisted her for a good part of this, and her husband.[12]Things speeded up. On 1 December 2008 a collective agreement was put into force between the unions and the employers in the London Borough of Hackney known as “the Hackney Process”, to which we will return. On 4 December 2008 the Claimant’s job description was agreed. This is an important step on the road towards a job evaluation. On 12 December 2008, the job was evaluated by a three‑member panel involving independent parties under the aegis of the Greater London Provincial Council Job Evaluation Scheme. Her job was valued at grade 6. That was paid with effect from 1 January 2009. On 31 May 2010 she took voluntary redundancy and presented a claim to the Employment Tribunal, contending that the Respondents had acted unlawfully in the respects that we have described above.[13]The Employment Judge heard evidence on the written components of the Claimant’s contract of employment and oral evidence from various actors in this drama, then she turned to make findings on the claims. The starting point were the terms of the contract. She concluded that there was no express term in the Claimant’s contract that the Respondents would carry out a job evaluation. She then decided that, as to the re‑grading which had taken place, there was no entitlement to backdating earlier than the time it was made. She then rejected the claim that there was, if not an express, then an implied term for back pay to be made, and then held that the issue as to time limits and jurisdiction for breach of contract would be dealt with on another occasion. The contractual documents[14]It is necessary to look at the contractual documents in order to assess the arguments in this case. The contract of employment[15]This is between Hackney and the Claimant. It appoints her at grade 1, and it indicates that the requirements of the school include a number of conditions that must be met before Hackney, as the local education authority, would appoint her. The particulars say that the school had appointed the Claimant to the post of classroom assistant, but it is common ground hitherto that this is a contract between Hackney and the Claimant. By paragraph 7 this document conforms to the ERA 1996 . The sources for the terms and conditions are as follow:
“7 Terms and Conditions of Employment During your employment with the Council your terms and conditions of employment will be in accordance with the following: Collective agreements negotiated from time to time by the National Joint Council for Local Government Services as set out in the National Agreement on Pay and Conditions of Service (the ‘Green Book’ – last edition July 1997) under the Single Status Agreement. -any local collective agreements relevant to your employment reached with the trade unions recognised by the Council. -the rules, procedures and provisions made by the Council directly affecting other terms and conditions of your employment. -the rules, procedures and provisions made by the governing body of the School. The National Joint Council agreements directly affecting your terms and conditions currently cover: -salary and grading provisions -appeals against salary grading -job evaluation The local collective agreements reached with the trade unions recognised by the Council directly affecting your terms and conditions cover: … The rules, procedures and provisions made by the Council directly affecting your terms and conditions cover: … The rules, procedures and provisions made by the governing body of the School directly affecting your terms and conditions cover: -the grievance procedure These documents are available for reference at the School. From time to time variations to your terms and conditions of employment will result from negotiations and agreements with the appropriate trade unions recognised by the Council. These variations will, as required, either be separately notified to you at the earliest opportunity but no later than a month after the date they occur, or, otherwise be incorporated in the documents to which you have reference.”
[16]There are then hard‑edged entitlements as to pay, increments, holidays, working time, pension and so on, and an averment of equal opportunities in employment by the Respondents. The division of the various sources can really be described in three ways. The first of the collective agreements between the unions and the employers in the sector is the Green Book, the national agreement; the second are those that cover procedures and so on for the local authority; and the third are those of the school, and these deal with grievances and other matters. Worth observing is that it is under the national collective agreements that one finds the sole reference to appeals against salary and grading and job evaluation. The Green Book[17]This is the national agreement, a very substantial opus, regulating the lives of several million workers in local authorities. It is divided into four parts – principles, key national provisions, other national provisions and joint advice – and it is under part 4, joint advice, that one finds the job evaluation scheme, equal pay and grading guidance. This document is the result in local authorities of the late realisation of the provisions of the Equal Pay Act 1970 (EPA). Minatory words are uttered in part 4.9, dealing with pay and grading reviews, such that policies for pay have to be transparent. Woe betide those who do not undertake local pay reviews using job evaluation, because they by so failing open themselves to significant legal risks by escalating the likelihood of equal‑pay claims, particularly from solicitors taking cases on a no win, no fee basis. There is no doubt, as the advocates before us today point out, that this Green Book was triggered substantially by the movement towards equal pay in the late 1990s.[18]The current agreement came into effect on 6 June 2005. It is the implementation agreement, and paragraph 5 provides as follows:
“Negotiations on local pay reviews should take place in accord with the Pay & Grading section of the 1997 Implementation Agreement and Part 2 Para 5 of the National Agreement. Local pay and grading reviews should include: […] A timetable for implementation by 31 March 1997 Resources necessary for the pay review and their estimated cost.”
[19]The principles in part 1 indicate the approach of the collective bargaining parties. The agreement itself is not legally binding as between the collective parties in accordance with legislation dating back to 1974, but the way in which the parties have divided their approach to the Green Book is set out in the following way:
“4. In addition to this Part, the national agreement consists of: Part 2 Key national provisions which are for application by all local authorities to all employees covered by the NJC. They are basic provisions which constitute a standard throughout the UK. Part 3 Other national provisions which may be modified by local negotiation. The party proposing change must state in writing what changes are sought and why and the parties must then seek to reach agreement, normally within three months. Where agreement is not possible, either party may refer the failure to agree to the provisional joint secretaries (or other mutually agreed persons) for conciliation. If the provincial conciliation is unsuccessful, the provincial secretaries may recommend further procedures for resolution of the difference, including external conciliation, medication or binding ACAS arbitration. The above procedures should if possible be completed normally within a further three months. Part 4 Joint Advice – this covers agreed guidance on good practice on a variety of issues.”
[20]It will be seen that part of this document sets national pay and conditions, and in the key national provisions at paragraph 5 one finds pay and grading, and these particular provisions:
“5. Pay and Grading 5.1 The pay and grading of jobs must be fair and non‑discriminatory, complying with equal pay legislation and associated Codes of Practice. The job evaluation scheme which has been developed jointly for local government is in Part 4. 5.2 The basic pay of each employee will consist of either a point or points on the local government pay spine. The pay spine is set out on the card inside the back cover. If a common system for all employees is not adopted locally, there needs to be objective justification for any distinction between those jobs paid on scales and those which are paid on single pay points. Further guidance on the equal pay aspects of local grading structures is included in Part 4. 5.3 An employee dissatisfied with the grading of their job is entitled to appeal for a reconsideration of the grading. Procedures will be agreed locally to deal with such appeals. […]”
[21]Paragraph 5.3 is relevant to the claim, because it indicates a binding commitment, accepted by Mr Glyn QC, that there is a right to a reconsideration of grading, and the signpost is that these matters are to be dealt with locally. Part 4 contains joint advice for the collective bargaining process, and the talisman for those parties is that locally there should be agreement between the trade unions and the employers as to handling job evaluation. There are substantial provisions about how to do this. In particular, a person who is evaluated or re‑evaluated has a right to appeal. There is then in appendix 1 guidance on a job evaluation scheme. This includes the toolbox by which evaluators may apply a transparent method for evaluating the components of different jobs so that one can be compared with another. All of this, we note, is under the heading of joint advice and is not in the same category as parts 1, 2 and 3. The Gold Book[22]The way in which this is cascaded down into London is through the Gold Book; this is the agreement of the Greater London Provincial Council for local government, which deals with, amongst other things, job evaluation. It contains agreements; some of these are, again, the hard‑edged matters of wages as to spinal points, payments for London weighting and so on, and others are guiding principles and codes of good practices in particular for a job evaluation scheme in 2000. As a matter of construction, therefore, it has the same legal effect as the Green Book in relation to job evaluation. Here, there is an imprecation that parties locally should arrange for a transparent scheme, and attached to it is the Provincial Council’s job evaluation scheme in 2000. There is the detailed description of the factors to be used in a job evaluation, the points that are available and the weighting to be given to the process. That document was in force at all times and is. The School’s Pay Policy[23]This was introduced in March 2007, therefore after the date of the Claimant’s employment. This is not an agreed document as between the trade unions and the employers; it is the school’s unilateral approach. A person may complain about their pay, there is reference to a pay appeals procedure, which provides that an employee may seek a review of any decision taken in relation to their pay, and a procedure is set out (see paragraphs 1.3 and 1.4). Applicable to all school staff is the determination of basic pay, and there is this:
“2.2 Job Descriptions All members of school staff will be provided with a job description. Staff will be consulted over the drawing up of the contents. The task of reviewing, drafting and finalising job descriptions is delegated to the Headteacher. Job descriptions may be periodically reviewed, in consultation with the employee concerned, in order to make reasonable changes. Any member of staff is entitled to request a review of their existing job description. Any such request will be considered first by the Headteacher and then by the Personnel Committee where requested. […] 3.1 Pay Reviews […] Individual teachers may make a written submission to the Relevant Pay Committee for particular consideration of their salary assessment. […]”
[24]That document seems to coexist with the documents we have described hitherto. From slightly earlier is the School Staffing (England) Regulations 2003 (2003 SI no. 1963), which provide, so far as is relevant, as follows:
“Appointment of support staff 15.—(1) Subject to regulation 18, where the governing body identifies a support staff post to be filled, it may recommend a person to the authority for appointment. (2) Any such recommendation must be sent to the authority with a job specification for the post. The job specification must include the governing body’s recommendations as to— (a) the duties to be performed, (b) the hours of work (where the post is part‑time), (c) the duration of appointment, (d) the grade, and (e) the remuneration. (3) The grade must be on the scale of grades application in relation to employment with the authority, and such as the governing body considers appropriate. (4) Where the authority has discretion with respect to remuneration, it must exercise that discretion in accordance with the governing body’s recommendation. The authority may be regarded as having discretion if any provisions regulating the rates of remuneration or allowances payable to persons in the authority’s employment either— (a) do not apply in relation to that appointment, or (b) leave to the authority any degree of discretion as to the rate of remuneration. (5) If within a period of seven days after receiving the job specification the authority makes written representations to the governing body relating to the grade or remuneration to be paid, the governing body must— (a) consider those representations, and (b) where it decides not to change the grade or remuneration to be paid, notify the authority in writing of its reasons. (6) Subject to regulation 11(2), the authority must appoint a person recommended to the post by the governing body, unless regulation 11(1)(c) applies.”
[25]Because of an error, this document was not put before the Judge, but a very similar text based on the 2009 succeeding Regulations, also called the School Staffing (England) Regulations (2009 SI 2680), was, and the headline is “Appointment of support staff”, which is what the Claimant was. An argument developed as to whether a new point had arisen, and this does arise in relation to the contingent cross‑appeal of the Respondents in this case, but it is plain that the Judge did have sight of the argument behind it, which was that it was for the school itself to decide the grades. The Hackney Process[26]The final document in this sequence is the Hackney Process. This came into effect on 1 December 2008, and it is relied upon by the Claimant for her claim for backdating. This document is agreed between the trade unions and Hackney, it deals with job evaluation (it is the Hackney job evaluation process), and it contains the operating principles. Hackney will use the GLPC Job Evaluation Scheme, because “[t]his is a robust factor‑based scheme that has been extensively tested to ensure that it is bias‑ and discrimination‑free”. It will use evaluators trained within the GLPC. The document requires managers to write job descriptions and to respond to written requests to amend a job description. Employees are entitled to have their job determined by independent job evaluation and to appeal against that. Clause 6.8 says that an employee may make a written request where certain conditions are met. Job evaluation will be conducted in accordance with the GLPC principles, appeals may be made in writing, and implementation is in the following terms:
“10.1 All changes to existing posts and creation of new posts must be done in accordance with the Council’s Establishment Control Procedure. 10.2 The effective date of the revised JD is the date on which an employee or manager submitted the request for re‑evaluation. In the case of a major reorganisation/review, a single implementation date may be determined (e.g. by agreement with the Trade Unions, or to coincide with the happening of an event, such as funding becoming available; etc) The employee should not undertake higher level duties until the appropriate salary is paid An honorarium payment may be considered where the employees has [sic] (at the request of their manager) been undertaking higher grades duties prior to the implementation date 10.3 Where an evaluation raises the grade of an occupied post, the post‑holder will be paid in accordance with the National Agreement provisions relating to promotion to a higher grade.”
The arguments and our conclusions[27]We will deal with the arguments of the parties in the sequence in which they were raised orally with us, which is not necessarily the sequence in which they were written. It is common ground that the approach to terms of employment is that terms may be apt for incorporation into an individual contract from a source such as a collective agreement (see, for example, the statement of the law in NCB v NUM [1986] ICR 736 and Marley v Forward Trust Group Ltd [1986] ICR 891 CA).[28]The issue in the case is the extent to which there is incorporation of terms relating to job evaluation. What agreement was in place in the Claimant’s contract for the determination of her rights if dissatisfied with her pay? The coincidence of the coming into effect of the Hackney Process may have complicated it, but the central submission of Mr Amey is that the Claimant was entitled by paragraph 5.3 of the Green Book to a consideration of her pay. That is put as a legal entitlement, and a breach has occurred by the failure of the Respondents from the first oral request in February 2005 down to 1 January 2009 to actually implement that. Mr Glyn contends that, while that is legally binding, as incorporated from the collective agreement, and is apt, there is no entitlement to invoke the full panoply of the job evaluation scheme by reason of that clause. Mr Amey contends that the clause is empty unless it has the power to trigger job evaluation.[29]The first issue for us to decide is whether there is a legal right to a job evaluation. The Judge held not; we respectfully agree. The procedures that are set out are all contained within the joint advice sections of the Green Book and the Gold Book. The way in which this is approached prior to the Hackney Process, as set out in the Green Book, is by way of a reconsideration. The Claimant is not entitled to say that she has an enforceable legal right to a job evaluation under the Green Book or under her contract. True it is that the contract points to national agreements for the purposes of pay grading and job evaluation, they do not attract legal enforceability simply by those signposts in the contract of employment. One has to look at each of the agreements there cited. As we have divided up the approach to the Green Book, there are legally binding black‑letter terms relating to, for example, pay and, on the other hand, joint advice. In our judgment, the entitlement to a job evaluation arises under the joint advice section and not under the principal provisions, and therefore that part of the claim would fail.[30]There is, however, from the implementation agreement, a direction that negotiations on pay reviews and proposals for progression and back pay should be conducted locally. The local agreement here is the Hackney Process. This is the only local agreement between the unions and management as to the implementation of pay. The national agreement talks about a payment being made immediately upon an agreement being reached (see paragraph 1.2), but the operative provisions, we hold, are those within the Hackney Process. Here is the only place where we see a reference to back pay, which follows the implementation agreement of 2004, and in clause 10, there is a clear reference to the backdating.[31]In debate with Mr Glyn we put to him the experience of the lay members of this court as to the way in which backdating is achieved when there is a job evaluation. He was not caught off guard by this and was able to respond to it in terms. The experience of the lay members is that when there has been a re‑grading the effect is to backdate it to the date on which the complaint was made. That corresponds to a complaint made, for example, under the Equal Pay Act 1970 for the operation of the equality clause as between a man and a woman for work of equal value or rated as equivalent.[32]The finding that at all times the Claimant’s work had not changed is effective to show that the correct grade was grade 6 at all times. The clause relating to backdating is clause 10, so that it is the date on which the employee (or manager) submitted the request for re‑evaluation. There is no dispute that the Claimant made the request orally in 2005. In the Hackney Process such a request has to be made in writing, but the Hackney Process was not available in 2005. There is no provision under the request for a reconsideration that it be made in writing. We see no reason why the Claimant’s straightforward request, which was not dealt with substantively in 2005, should not be the start date for implementing the decision made in 2008. The effect of the decision is that at all times the Claimant has been grade 6 and that therefore her rate of pay for the period from February 2005 was grade 6. We are heartened to note that she was paid in accordance with an improvement in March 2008, at least in part.[33]We turn, then, to the argument relating to the right of the school itself to determine the pay of the Claimant. This is based upon a construction of the Regulations. Mr Amey, with some controlled indignation, said it cannot be right for this public‑law principle, which is to do with the regulation of relations between the local authority and a school, to enable the Respondents to renege on a contractual obligation to one of its support staff. We agree with that. This is a public‑law obligation, and it regulates the affairs between Grazebrook and Hackney.[34]What is important is Regulation 15(3), which is that the grade of the support staff must be on the scale of grades applicable to employment with the authority. We now know, since the successful re‑evaluation of the Claimant’s job, that the grade applicable in relation to employment of the Claimant by Hackney is grade 6 and therefore that grade must be the one that is paid to her in accordance with the Regulation as between Hackney and Grazebrook. There is no support for a more localised treatment of the Claimant’s employment. The School’s Policy itself does not conform to the national agreement, which requires there to be local agreement on certain issues. The Claimant’s contract makes clear that issues relating to pay and grading are to be collectively agreed; the flowering of this is in the Hackney Process. As a matter of fact the Claimant’s 2005 request for reconsideration was dealt with by the necessary agreement on a job description on 4 December 2008 and inured into a proper job evaluation on 12 December 2008. So the implementation provisions provided by the Hackney Process are the ones to regulate the treatment of back pay. The intention of the collective parties to the Hackney Process was that when someone makes a complaint and wants a re‑evaluation or a reconsideration, if they succeed, pay will be backdated to that date, and that is what the Claimant sought in this case.[35]In our judgment, the Judge did not adopt the correct approach to the second principal question. We reject the submission that both of the complaints argued before us today were not raised; they were. We have been taken in detail to the submissions of Mr Amey and to the objection to these matters being raised by Mr Glyn in his skeleton argument. We accept Mr Amey’s submission that he has a right to raise these issues, and, although the Judge found there was some confusion, as we have, there is no doubt that the Claimant was seeking was to raise a complaint that she was being paid at the wrong grade and the Respondents had a duty to rectify it. He drew a distinction between re‑evaluation and reconsideration, but in the present case he suggested this was the only way.[36]We consider that this is not a full‑blown right to a job evaluation but simply to a reconsideration, and so we reject the first, primary ground upon which this appeal is made and uphold the Judge’s approach to it. As to the second issue, which is to do with the backdating of the award that she was properly entitled to receive in December 2008, we disagree with the learned Judge and hold that the Claimant is entitled to backdating to February 2005.[37]As to the argument relating to the higher‑level training assistant change in March 2008, the Judge found that a new contract and job description were issued. The Claimant did not agree to them and refused to sign them. That was the reconsideration that she had sought. In our judgment, that did not include all of the matters that were subsequently found to be the product of the job evaluation, and the numbers are clear: she was on grade 1, she wanted grade 6 and she got grade 3. That was not satisfaction of the claim that was eventually given to her in December of 2008.[38]There now remains open an opportunity for the Respondents to contend that in as much as the claim is formulated as an unauthorised deduction from pay – and this applies, we understand, to the arguments about annual increments – there may be a time point. In so far as it relates to outstanding liabilities on termination this may not apply, but we are happy to send this back to the Tribunal if the parties cannot agree it.