England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE STOKE-ON-TRENT COUNTY COURT
(JUDGE NICHOLAS MITCHELL)

		Royal Courts of Justice Strand London WC2 Friday, 6th July 2001

Friday, 6 June 2001

1. LORD JUSTICE PILL: Lord Justice Tuckey will give the first judgment.
2. LORD JUSTICE TUCKEY: This is an appeal from a judgment of His Honour Judge Mitchell, given in the Stoke-on-Trent County Court on 13th March 2000. He allowed the respondent council's appeal from a judgment of District Judge Schroeder, who had given judgment for the appellant, Mr. Williams, on his claim to be paid time and a half for overtime which he worked between 22nd December 1992 and 30th September 1998. The council had paid the appellant plain time -- that is to say, the standard hourly rate. The issue on the appeal is principally one of construction of the terms of the appellant's contract of employment.
3. The appellant worked for the council from 1974 until he was made redundant in March 1999. At the relevant time he was a receptionist at the council's offices in Stafford. His contract was subject to the conditions of service of the National Joint Council for Local Authorities' Administrative, Professional, Technical and Clerical Services. His letter of appointment added "and such Local Conditions as the County Council may adopt from time to time", but the particulars of terms given to him said "and the decisions from time to time of the County Council". Fortunately we do not have to decide what, if any, contractual effect these latter words may have.
4. It is common ground that the appellant's contract only required him to work a 37-hour week. He did not have to work overtime; he volunteered to do it.
5. The construction argument centres on paragraph 38 of the National Conditions which is headed "Allowances for working arrangements other than normal office hours." Under the sub-heading "GENERAL", paragraph 38(1)(a) says:

"Wherever possible the employing authority should discourage the use of working arrangements which involve the attendance of officers at their place of work outside the authority's usual working hours. However, where such working arrangements are unavoidable the officer shall be entitled to the appropriate allowances subject to, and in accordance with, the following provisions of this Paragraph."

6. Sub-paragraph (2) is headed "SCOPE AND APPLICATION" and under a further sub-heading of "Normal Working Week", sub-paragraph 2(a) says:

"Where the working arrangement is part of the normal working week and is required by the employing authority, then, subject to the terms of sub-paragraphs 2(c) and (d) and Note 2 below:

(i) officers in receipt of a basic salary of spinal column point 28 or less [as the appellant was] shall have an entitlement to the allowances set out in sub-paragraph (4)..."

7. Sub-paragraph 2(c) applies to social workers and other staff, and is not relevant to the appellant. Sub-paragraph 2(d) says nothing. It is merely noted as "Reserved" in the conditions.
8. Note 2 says:

"It is possible that some local authorities may employ a limited number of officers on work which requires attendance at the job on a variable basis. In such cases there should be determined a method of calculating payment which takes account of the terms of their working conditions."

9. Sub-paragraph (4) provides for different allowances to be paid for weekend working, night work and irregular hours, but only where such work is done as part of the normal working week. These provisions obviously did not apply to the appellant because he did not do his overtime as part of his working week, nor was he required to do so by the council, as sub-paragraph 2(a) says.
10. Sub-paragraph (2)(b) is headed "Overtime Working". It says:

"Overtime (other than planned overtime - see sub-paragraph (b)(v) below) is payable only to officers in receipt of basic salary of (new) scp 28 or less on the following basis."

11. Sub-paragraphs (i) and (ii) say how the hourly rate is to be calculated and that only completed half hours will be paid for. Sub-paragraph (iii) says:

"officers for whom it is a condition in their contract of employment that they shall work hours longer than the standard 37 a week shall be entitled to overtime payments unless the additional hours are recognised by some other payments or arrangements determined locally."

12. Sub-paragraph (iv), which is the provision relied upon by the appellant, says:

"For overtime on any day other than a Sunday, or a general public holiday, payment shall be at a time and a half. For overtime on a Sunday, payment shall be at double time."

13. Sub-paragraph (v) applies, as it says, to exceptional cases where planned overtime by specified officers would facilitate the work of the employing authority. The authority may "authorise such overtime under proper control and for a specified period, and authorise payment of an honorarium therefore (of the amount to be determined by the authority and related to the various factors involved) to officers who do not qualify for overtime payments."
14. The only other provision I need refer to is paragraph 40, which is headed "Office Hours". Sub-paragraph (d) of that paragraph says:

"Staff should not be contracted to work hours of more than the standard 37 a week unless this is unavoidable for the proper performance of the job. But where such hours are to be worked the officer shall receive

either overtime payments in accordance with paragraph 38 of this Scheme

or such other payments or such other payments or arrangements as may be determined locally."

15. In upholding the appellant's claim the District Judge relied simply on paragraph 38(2)(b)(iv). The council contended that the appellant had agreed that he would be paid overtime at the plain rate. The District Judge rejected this contention, saying:

"I find that Mr. Williams at no time agreed to work at plain rate and that it was never his intention to acquiesce in such an arrangement and that this was something which he raised on a regular basis with his line manager, Mr. Owen, albeit in the early stages simply oral with him, and receiving verbal assurances that it was being looked into and would be sorted out. He relied on those in good faith and did not take matters further until his patience was exhausted."

16. And a little later in the judgment he says:

"There was no acquiescence in this case and I so find."

17. On appeal, on the issue of construction the judge held that the scope of paragraph 38(2)(b)(iv) was expressly defined by paragraph 38(2)(a); in other words, paragraph 38 as a whole only applied where overtime was worked as part of the normal working week and was required by the employing authority. As neither of these conditions were met in the appellant's case, paragraph 38 did not apply at all. The appellant's entitlement to overtime payment was therefore in accordance with the council's "decisions", "local conditions" or "arrangements determined locally". These provisions provided for payment of overtime at the plain rate which the appellant had accepted by continuing to volunteer for overtime and not saying that he would only do this work if he was paid time and a half.
18. I do not think either of the judge's reasons for allowing the appeal was right. Sub-paragraph (2) deals with two situations. The first is where the employee's normal working week (that is, the 37 hours) involves working outside the authority's usual working hours, such as at nights or at weekends when the special allowances provided for by paragraph (iv) become payable. This situation is covered by paragraph 2(a). The second is where employees work for more than the normal working week -- that is to say, where they work overtime. That situation is covered by paragraph (2)(b). Paragraph (2)(a) does not, therefore, qualify paragraph (2)(b), so I do not accept the judge's reasons for construing paragraph 38 as he did.
19. The judge's alternative reason for allowing the appeal seems to me to fly in the face of the District Judge's findings of fact to which I have referred, which the judge recognised was binding on him as this was a County Court appeal. If, as the District Judge found, the appellant had never agreed or acquiesced in the payment of plain rate, the judge's conclusion cannot be supported. There was no evidence of any agreed local conditions or arrangements. In any event, I do not accept that one can infer acquiescence from the fact that someone goes on working when there is an on-going dispute about what he should be paid for it.
20. Unfortunately, that is not the end of the matter so far as the appellant is concerned. I return to paragraph 38(2)(b), which undoubtedly has to be read as a whole. Its opening words make it clear that it contains a code: "overtime is only payable on the following basis". The only provision dealing with entitlement is sub-paragraph (iii). That applies only to officers "for whom it is a condition of employment" that they work more than 37 hours a week. The appellant accepts that he was not such an officer. Sub-paragraph (iv), on which he relies, does not deal with entitlement. It simply fixes the rate at which overtime will be paid by the words "payment shall be at".
21. One has to look elsewhere in sub-paragraph (b) to see who is entitled to such payment. This view of paragraph (2)(b) is supported by (v), which shows that it has a very restricted ambit and, where overtime is planned and authorised, specific arrangements have to be made for its payment under that provision.
22. On this construction only those officers who fall within sub-paragraph (2)(b)(iii) can rely on these overtime provisions. Sub-paragraph (2)(b)(iv) confers no free-standing general entitlement to overtime. It follows that paragraph 38 (which I accept is not at all easy to construe) does not deal with the circumstances in which the appellant worked overtime at all.
23. Paragraph 40(d), to which I have referred, might arguably cover the situation if the second sentence of that sub-paragraph can be construed so as to cover the situation in which the appellant worked. But that does not help him, since for the reasons I have given paragraph 38 does not apply and the appellant does not contend that payment of time and a half was the subject of any arrangement determined locally in accordance with the words of that sub-paragraph.
24. In the absence of any other express terms in, or arising by reference from, his contract of employment which entitled the appellant to time and a half, he is unable to establish his claim against the council for payment at that rate. When faced with this point this morning, Mr. Williams said that in practice overtime had been paid at time and a half to others. But the case before the judges below was not run on the basis that there was such a practice. Indeed, the evidence before the District Judge was that the practice was to the contrary - to pay only plain rate.
25. So unfortunately I do not think Mr. Williams can invoke practice to substantiate his claim. As he cannot bring it within paragraph 38, his claim must fail. For those reasons, I must reluctantly dismiss his appeal.
26. LORD JUSTICE PILL: I agree.
27. I mention first Mr. Beaver's (for the respondent) argument that as a subsidiary basis for upholding the decision of the District Judge he can rely on locally determined arrangements of the kind contemplated in the National Conditions. In my judgment, he is in no position to do so. There is no material before the court which justified such reliance or of any appropriate local agreement. Equally, neither side can now rely upon practice in this case, which must be determined upon a construction of the National Conditions.
28. Mr. Williams has to establish that he is entitled to a higher rate than the plain hourly rate on which his contract is based. Understandably, he does not seek to rely on 38(2)(a) and the particulars given under the heading "Allowances" at 38(4) because those parts of condition 38 deal with weekend and night working as a part of the normal working week. It provides for a additional payments for such working. It does not apply, as Mr. Williams accepts, to hours worked beyond the contractual provision of 37 hours.
29. Mr. Williams seeks to rely on 38(2)(b)(iv). I agree with Lord Justice Tuckey upon the construction of what I too regard as a code contained in 38(2)(b), and I have nothing to add to the reasoning which he has expressed and which, in my judgment, concludes this case against Mr. Williams.
30. The judge found for the employers on a second ground. He found, in circumstances where Mr. Williams had worked extra hours by agreement with his employers, that Mr. Williams had acquiesced in payment for those extra hours at the plain rate. There was, however, a genuine dispute over the rate at which he should be paid for those additional hours. It was a dispute which he pursued first in internal procedures and now in proceedings before the courts. Mr. Beaver submits that, because the working of the extra hours was voluntary, the fact that Mr. Williams continued to work them having been told the employers' contention that for those extra hours he would only be paid at the plain rate, he has acquiesced in payment at that rate and no more than that rate.
31. The judge upheld that submission, stating at page 14F:

"In those circumstances the only reasonable inference from those facts is that the claimant did accept his engagement from time to time on that basis",

32. namely, on the basis of payment at the plain rate.
33. I reject that finding, which, in my judgment, is wholly contrary to the evidence. What is more, the District Judge held that there was no acquiescence. The District Judge was right to hold that each side accepted the arrangement without prejudice to its position, and he should not have been reversed on appeal. However, for the reasons given by Lord Justice Tuckey and the reasons I have given, I too would dismiss this appeal.
ORDER: Appeal dismissed; no order as to costs in the Court of Appeal; orders for costs below are modified in that in the hearing before the District Judge the present respondents will have costs of £2500 and before the Circuit Judge costs of £1,000. (Order does not form part of approved Judgment)