Industrial Tribunals Northern Ireland Decisions

 
THE INDUSTRIAL TRIBUNALS

CASE REFS: 490/07 & Others

(Lead Case 490/07)

CLAIMANTS: Hanlon & Others

RESPONDENT: Department of Regional Development (Roads Service)

DECISION

The decision of the tribunal is that the claimant:-

(1) did not suffer an unlawful deduction from wages from 12 February 2001;

(2) did suffer an unlawful deduction from wages for the period 5 October 2000 to 12 February 2001; and

(3) the unlawful deduction suffered for the period 5 October 2000 to 12 February 2001 is not recoverable as the claimant's claim was out of time.

Constitution of Tribunal:

Chairman (sitting alone): Mr B Greene

Appearances:

The claimant was represented by Mr Mark McEvoy, of counsel, instructed by Donnelly & Kinder, Solicitors.

The respondent was represented by Mr Aidan Sands, of counsel, instructed by The Departmental Solicitor's Office.

SOURCES OF EVIDENCE

1. The tribunal heard evidence from Albert Mills on behalf of the claimant and Kenneth Hutton on behalf of the respondent. The tribunal also received four bundles of agreed documents amounting to 166 pages and legal submissions of five pages on behalf of the respondent.

THE CLAIM AND DEFENCE

2. The claimant is claiming an unlawful deduction from wages. The respondent denies that claim. The claimant's claim is one of 290 related claims.

THE ISSUES

3. At a Case Management Discussion held on 1 October 2007 the parties agreed that the claim of Thomas Hanlon v Department of Regional Department (Roads Service) would be a lead test case and would be heard first.

The parties agreed the following legal and factual issues;-

(1) Did the respondent unilaterally increase the Productivity Units (PU) per hour required to earn a bonus from 10 to 10.5 PU hours?

(2) If the answer to sub-section (1) is yes, was the respondent entitled to unilaterally increase the PU per hour required to earn a bonus from 10 to 10.5 PU hours? This was the consequence of the reduction of the hours of work from 39 to 37 hours per week.

(3) Did the claimants agree to the offer which included this variation by ballot of February 2001 and have they worked this agreement without dispute every since?

(4) Is there an obligation on the respondent to pay all employed equally irrespective of their union membership? If the claimants did agree to the variation by ballot did this release the respondent from its obligations to pay all the employees equally?

(5) Are the claimants stopped from challenging the terms and conditions of their contract when they agreed to the variation of the said terms and conditions seven years ago?

(6) Have the claimants been paid in accordance with their contracts of employment at all times?

FINDINGS OF FACT

4. (1) The claimant is a driver/labourer with the respondent. He is a shop steward in the ATGWU.

(2) The respondent employees 930 industrial staff. Not all are trade union members. Three unions represent the employees the ATGWU, the GMB and the AEEU.

(3) Under the 1997 Single Status Agreement the weekly hours of work for employees were reduced from 39 to 37. This agreement was effective from 1 April 1999 and applied to the whole of the United Kingdom.

(4) The respondent did not put the Single Status Agreement into effect until 5 October 2000.

(5) David Thacker and Malcolm Spurgeon McClean, members of the AEEU, brought claims to the industrial tribunal in October and November 1999 alleging unlawful deductions of wages by reason of the failure of the respondent to reduce the working week to 37 hours from 39 hours from 1 April 1999.

(6) In June 2000 a claim was launched on behalf of Joseph Vincent Kelly a member of the ATGWU. That claim was essentially the same as that being brought by Messrs Thacker and McClean.

(7) From 5 October 2000 the respondent reduced the working week from 39 to 37 hours. The respondent did not reduce the weekly wage.

(8) A bonus was payable to all employees within the respondent. The threshold to get the bonus was to achieve 390 Production Units of work (PU) per week that was 10 PUs for each hour worked.

The respondent maintained that although the working week was reduced to 37 hours the threshold for the triggering of the bonus remained at 390 PUs per week. This effectively required employees to do 10.5 PUs per hour instead of 10 PUs per hour.

(9) Around this time the respondent had intensive negotiations with the unions on topics flowing from the reduction of the working week to 37 hours, including PUs per hour, the claims for overtime from 1 April 1999 until 5 October 2000 when the respondent had reduced the working week and other matters.

(10) On 21 November 2000 the respondent made an offer to all unions. The offer included the following elements:-

(a) 37 hour basic working week,

(b) basic hourly rates increased by 8.5%,

(c) PU value raised by 10% from 50p to 55p,

(d) maintenance of 390 PUs output for the 37 hour week,

(e) payment of overtime for period 1 April 1999 to 5 October 2000,

(f) no recovery of bonus already paid irrespective of the overtime period above, and

(g) payment of arrears new rates on overtime and standard.

The respondent followed this up on 22 November 2000 with a letter to all employees setting out the details of its offer.

(11) On 6 December 2000 the Joint Industrial Council met. The council meeting had representatives from the respondent and the three unions GMB, ATGWU and AEEU.

The GMB and the ATGWU stated their willingness to ballot their members on the proposals, put by the respondent, but without making a recommendation.

The AEEU stated that they would advise their members to reject the offer.

(12) A ballot was put to all members of the ATGWU and the GMB in January 2001. The ballot paper set out the details of the offer exactly as set out at sub-paragraph 4(10) above. The members of the ATGWU voted in favour of acceptance of the respondent's proposal by a majority of two to one. On foot of that vote the Regional Industrial Organiser of the ATGWU, Mr Albert Mills, wrote to the respondent on 30 January 2001 and stated;-

"Please be advised that our members have accepted DRD Roads' offer re 1999/2001 pay claim."

(13) The Joint Industrial Council met on 12 February 2001. The respondent and the three trade unions were represented. The AEEU indicated its intention to pursue the additional amounts claimed by reason of the changes in the payment for the bonus to an industrial tribunal. The two other unions the GMB and the ATGWU agreed a circular with the respondent.

A circular was agreed and signed by the Joint Secretaries. The terms of the circular were:-

(1) The revised basic rates of pay set out in the Appendices to this Circular should be paid to full-time industrial employees in Roads Service with effect from pay week containing 1 April 2000.

(2) The terms of this Circular should be brought to the attention of all Industrial Employees in Roads Service.

(3) This is without prejudice to the AEEU outstanding industrial tribunal claims with regard to their interpretation of the Pay and Conditions Links with the JNC national agreement.

At the Joint Industrial Council meeting of 12 February 2001 both GMB and the ATGWU unions stated that the breaking of the pay link with the NJC was not included in their agreement to accept the pay offer which their members had voted for by ballot resulting in a two to one majority in favour.

(14) In March 2001 the AEEU, in relation to the industrial tribunal claims brought in the names of Messrs Thacker and McClean, amended those claims to include claims for unlawful deduction of wages by reason of the requirement imposed on them by the respondent to work 10.5 PUs per hour instead of 10 PUs per hour in order to trigger the payment of the bonus. They regarded this as a unilateral change to the contract resulting in a reduction in the bonus.

(15) In July 2001 the industrial tribunal claim brought by Joseph Vincent Kelly, a member of the ATGWU, which was identical to the claims of Messrs Thacker and McClean prior to the amendment of March 2001, was withdrawn as the 37 hours working week had been conceded by the respondent. No attempt was made to amend those proceedings to include a claim for a loss of bonus. Nor was a new claim on this point initiated.

(16) The decision in Thacker and McClean v DRD cases was not delivered until 10 October 2006. The tribunal found that there had indeed been an unlawful deduction of wages. In its decision it set out its conclusions at paragraphs 14 and 15 where it stated:-

"14. The tribunal is satisfied that insofar as the bonus scheme is concerned the employees were being asked to do 390 PUs in a reduced working week which meant that each man was required to do 10.5 PUs per hour of employment before he was entitled to bonus. This was a unilateral change in the bonus scheme which resulted in the claimants, amongst others, earning less bonus than they had previously earned. The matter was not rectified by the 10% increase in payment for PUs as this had been a unilateral decision of the respondent made for different reasons than the negotiation of the Single Status Agreement.

15. The tribunal holds that the reduction of the bonus paid to the claimants was not required or authorised by statute or under the contract of employment and was not consented to by the claimants. The reduction is consequently made in contravention of Article 45 of the 1996 Order."

(17) A grievance was lodged by the ATGWU on behalf of its members on 1 December 2006. In that grievance the ATGWU was seeking the application to its members of the additional bonus payment in accordance with the decision in Thacker and McClean v DRD which it regarded as applicable to its members as well. It also relied on the respondent's policy of equality of payment to employees.

(18) There had not been an agreement between the claimant or the ATGWU and the respondent to pay additional bonus to the members of the ATGWU following the decision in Thacker and McClean v DRD. The ATGWU had expected the respondent to apply such an additional bonus payment to its members and had so commented to the respondent and its staff on a number of occasions. The ATGWU argued that Clause 3 of the Circular of 12 February 2001 specifically referred to this matter.

(19) The respondent has maintained throughout that it did not make an unlawful deduction in relation to the members of the ATGWU and the GMB as both unions and their members had varied their contracts by consent.

THE LAW

5. (1) Terms and conditions of a contract are as agreed between the contracting parties.

(2) The terms and conditions of a contract may be varied;-

(a) by express consent of the contracting parties, or

(b) by operation of law i.e. amendments to a contract brought about by statue or by decision of the courts, or

(c) by custom and practice, or

(d) by incorporation of terms into a contract, eg following a collective agreement made between employer and unions.

(3) Where one party voluntarily agrees to a request by the other that he should not insist on the mode of performance fixed by a contract the court may hold that the party has waived his right to require the contract be performed in this respect according to its original intention. (Chitty on Contracts 29^th Edition, Chapter 22-040).

(4) If a person having a right, and seeing another person about to commit, or in the course of committing, an act infringing upon that right, stands by in such a manner as really to induce the person committing the act, and who might otherwise have abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the act.

In this sense of the term acquiescence by the claimant amounts to the waiver of his rights and raises a species of estoppel preventing him from subsequently enforcing those rights. (Duty on Contracts 29^th Edition, Chapter 28-136).

(5) The term 'laches' is sometimes used to denote acquiescence. But, in a narrower sense, the essence of the doctrine of laches is that if the claimant has not been reasonably diligent in seeking relief, and in consequence the position of the defendant has been prejudiced or it would now be unjust or unreasonable to grant the relief, the claimant will be debarred from pursuing his remedy on the grounds of laches. What amounts to reasonable diligence and what circumstances will render it inequitable to grant the relief will vary with the type of relief sought and the facts of the particular case (Chitty on Contracts 29^th Edition, Chapter 28–137).

(6) An employer shall not make a deduction from the wages of a worker employed by him unless the deduction is required or authorised by statute or a provision of the worker's contract or the worker has previously signified in writing his agreement or consent to the making of such a deduction (Article 45 Employment Rights (Northern Ireland) Order 1996).

(7) The time limit within which a worker must bring a claim for an unlawful deduction is three months from the making of the unlawful deduction or where a series of deductions is relied upon three months from the last of the series of deductions (Article 55(2) Employment Rights (Northern Ireland) Order 1996).

(8) An industrial tribunal may extend time to enable a worker to continue with such a claim where the tribunal is satisfied that it was not reasonably practicable for the worker to bring the claim within three months from the date of the deduction or last deduction and that the tribunal is satisfied that the claim was brought within such further period as was reasonable, (Article 55(4) Employment Rights (Northern Ireland) Order 1996).

APPLICATION OF THE LAW AND FINDINGS OF FACT TO THE ISSUES

6. (1) The claimant's contract of employment was varied by agreement on 12 February 2001. In so concluding the tribunal took into account the following matters:-

(a) All the terms of the variation were put to the union and to the members individually. The terms and conditions are as set out at paragraph 4(10) above.

(b) The union has a practice of putting the final offer following negotiations with the employer to its members for their decision.

(c) A ballot of all members of the ATGWU was held in January 2001. The members voted by a majority of two to one in favour of accepting the proposal put to them by the respondent.

(d) A letter of 30 January 2001 was sent from the ATGWU to the respondent accepting its offer.

(e) As a consequence of the agreement the members of the ATGWU received a lump sum payment for overtime by reason of the respondent's failure to reduce the working week from 39 to 37 hours, the increase in the payment for PUs by 5p per unit, and the effective increase in weekly wages by reason of the wages remaining unchanged although the number of hours was reduced from 39 to 37 hours. (Harvey on Industrial Relations and Employment Law, Section A [312]).

(2) Part of the agreement was that the claimant would be paid overtime for the period from 1 April 1999 until 5 October 2000 during which period the respondent had refused to reduce the working week from 39 to 37 hours.

(3) From 5 October 2000 to date employees who are members of the ATGWU were required to do 10.5 PUs to achieve the 390 PUs per week in order to trigger payment of the bonus.

(4) Clause 3 of Circular agreed between the respondent and ATGWU and GMB states,

"This is without prejudice to the AEEU outstanding industrial tribunal claims with regard to their interpretation of the Pay and Conditions Links with the JNC National Agreement"

This is a reference to breaking the pay links with the JNC which set pay rates throughout the UK. It is not a reference to accepting the varied terms for triggering the bonus payments subject to the outcome of the claim of Thacker and McClean v DRD.

(5) Following the reasoning in the Thacker and McClean v DRD decision from 5 October 2000 until 12 February 2001 the claimant suffered an unlawful deduction by reason of the respondent's unilateral change of the trigger for the bonus requiring him to do 10.5 PUs per hour.

(6) It is open to the claimant to make a claim for an unlawful deduction for the period from 5 October 2000 until 12 February 2001. Such a claim must be made within three months from the date of the deduction or where a series of deductions is relied upon from the date of the last deduction in the series.

As the contract was varied by consent from 12 February 2001 no claim for an unlawful deduction can be made for any period of time from 12 February 2001.

(7) If a claim for an unlawful deductions was to have been made it had to be made by 15 May 2001. The claim by the current claimant was not made until 4 April 2007 almost six years late.

Article 55(4) of the Employment Rights (Northern Ireland) Order 1996 enables the tribunal to extend time where it is satisfied that it was not reasonably practicable to present the claim within three months and the claim was presented within a further reasonable period.

(8) The tribunal is not persuaded that it was not reasonably practicable to bring the claim within three months from the date of the last deduction. In so concluding the tribunal was influenced by the following matters:-

(a) The claimant has not offered any reason to explain not pursing the claim at an earlier stage except that he was awaiting the outcome of the decision in Thacker and McClean v DRD.

(b) Even if that was the reason why the claimant did not lodge his claim at an earlier stage no reason was offered to the tribunal which would have prevented him from lodging the claim earlier even if he subsequently sought to adjourn the claim pending the outcome of the decision in Thacker and McClean v DRD.

(c) The claimant or his union did not seek to amend the claim in Kelly in similar fashion to that done in Thacker and McClean v DRD to make a claim for a loss of a bonus as an unlawful deduction. In fact the claim made by one of their members of AGTWU, Mr Kelly, was specifically withdrawn.

Accordingly the tribunal does not have jurisdiction to entertain the claimant's claim for an unlawful deduction relating to the period from 5 October 2000 until 12 February 2001.

(9) It would be open to the respondent to rely on the various other legal doctrines such as waiver, doctrine of laches or acquiescence, in order to seek to defeat the claimant's claim for an unlawful deduction relating to the period from 5 October 2000 until 12 February 2001. However, in light of the tribunal's finding at 6(8) above it is unnecessary for the tribunal to adjudicate on whether these remedies or defences defeated the claimant's claim.

(10) Accordingly the claimant's claim for an unlawful deduction for failure to be paid the additional rate for a bonus secured by the members of the AEEU is dismissed as the claimant had specifically varied his contract and therefore the claim for an unlawful deduction does not arise from the period of 12 February 2001.

The claim for an unlawful deduction for the period of 5 October 2000 until 12 February 2001 is also dismissed by reason of the claim being out of time.

(11) In relation to the specific issues set out at the Case Management Discussion held on 1 October 2007 as they apply to the claimant, the tribunal answers them as follows:-

(1) The respondent did unilaterally increase the Productivity Units (PU) per hour required to earn a bonus from 10 to 10.5 PU hours from 5 October 2000 to 12 February 2001. From 12 February 2001 that variation was by consent.

(2) The respondent was not entitled to unilaterally increase the PU per hour required to earn a bonus from 10 to 10.5 PU hours from 5 October 2000 to 12 February 2001.

(3) The claimant agreed to the offer which included this variation by a decision of 12 February 2001. The ballot of union members was held by 19 January 2001. The agreement was worked without dispute since 12 February 2001 although the AGTWU stated to the respondent on several occasions over the years that it wanted any awards made to Messrs Thacker and McClean applied to all employees

(4) There was no evidence before the tribunal to establish that the respondent had an obligation to pay all employed equally irrespective of their union membership.

(5) There is no lawful basis to successfully challenge the variation in the terms and conditions of contract of the claimant agreed to seven years ago.

(6) The claimant has been paid in accordance with his contract of employment from 12 February 2001. From 5 October 2000 to 12 February 2001 the claimant was not paid in accordance with his contract of employment. But for the reasons set out above he is not able to recover the unlawful deductions during that period.

Chairman:

Date and place of hearing: 7-9 May 2008, Belfast.

Date decision recorded in register and issued to parties: