Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2009/00761.html
Cite as: [2009] NIIT 761_8IT, [2009] NIIT 761_08IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 761/08

CLAIMANT: George Downie

RESPONDENT: Northstone (NI) Limited

DECISION

The decision of the tribunal is that the claimant did not suffer any unauthorised deduction from his wages under the terms of Article 45 of The Employment Rights (Northern Ireland) Order 1996, (hereinafter called the 1996 Order) and that there was no breach of the claimant’s contract of employment by the respondent.

Constitution of Tribunal:

Chairman: Mr Cross (sitting alone)

Appearances:

The Claimant was represented by Ms Jane Griffiths.

The Respondent was represented by Mr J Kennedy Barrister-at-Law instructed by McGrigors Solicitors.

Evidence

The tribunal heard oral evidence from the claimant and on behalf of the respondent from Mr B Watt, Mr J Leitch, Mr G McQuillan, Mr P Weir and Mr N Hughes.

Findings of Fact

The claimant was employed by the respondent and its predecessors as a Package Unit Operator and Ridge Tile Production operative (hereinafter called “the old job”), in the tile factory at Toome, under a contract of employment dated 27 September 2003. This contract permitted the respondent to relocate the claimant’s place of work as and when required.

The relevant clause in the contract stated:-

“Transfers

Where changes in the nature, level or location of work available to the Company make it necessary, employees may reasonably be required to transfer from one workplace to another. This will include the Company’s need to make best use of the skills of individuals within the workforce.”

2. In November 2007 the respondents built a new tile factory in Toome and the employees of the old plants at Toome and Ballymena were interviewed for either new posts in the new plant or possible redundancy. At a meeting with management on 9 November 2007 the claimant told the management team that he did not want redundancy and at a subsequent meeting on 14 November he was informed that he would be employed as a Raw Materials Controller / Aggregate Mixer Operator (hereinafter “the new job”), at the new Toome plant, at that time being constructed by the respondent. At that meeting the claimant was informed that his rate of pay would not change but that there would be a change in the production bonus, due to the capability of the new plant, the different method of operation and the control and monitoring of its production. There was an assurance given by Mr McQuillan, the director of the respondent responsible for the concrete division, to the employees who took up new posts in the new plant that no one would be worse off who moved to the new plant. The respondents produced at the hearing, a job analysis highlighting the differences in the claimant’s old job and the new job. There were ten areas of difference in the analysis, some differences being quite substantial in the percentage of time given to certain tasks.

3. The claimant transferred to the new plant at the end of November 2007. The new plant at Toome is still not fully commissioned, at the date of this hearing, due to problems in installing the new equipment. However despite this delay the respondent has introduced a bonus system for the employees with effect from 1 September 2008. This bonus system is in two parts, the first is for production of good quality tiles and the second is a maximum sum of £250-00 per quarter, paid to each employee based on certain targets being achieved, for instance in cutting out waste in the plant and Health and Safety issues. During the change over to the new plant the employees, including the claimant, did not have the benefit of the new bonus scheme until week 25 although they did receive good amounts of overtime at this time. The new bonus system replaced the old bonus systems from the previous plants. This old bonus system rewarded good production results and flexibility in working practises. These bonuses had been introduced by agreement between management and trade unions in December 2000 and had been honoured from then until the change over to the new plant in November 2007.

4. The claimant spoke to his line manager during February 2008 concerning the bonus situation. When, in his view he received no satisfactory response he wrote to Mr Watt the Production Director. In that letter of 20 February 2008, the claimant said that he understood that a new bonus system was to be reviewed for the new plant, however no bonus was being paid. A meeting was held between Mr Watt and the claimant on 21 February, the record of which, in Mr Watt’s diary, states that he told the claimant, “that as discussed at redundancy / job renewal meetings bonus would be implemented once plant was commissioned and would be a different structure of payment.” In the claimant’s note of the meeting he adds that Mr Watt offered him the chance of returning to his old job on the ridge plant at his old hourly rate and the opportunity to earn the bonuses attached to that job. The claimant said that he did not want to do that. Mr Watt, according to the claimant’s note, also referred to the increased overtime available at the stage of the move to the new plant and said that that should assist with the loss of bonus payments. The claimant also raised the matter of so called “dirty money”, which was an additional payment paid to employees who cleaned plant after it had been used in production. This was a requirement at the old Toome plant but due to the new machinery at the new plant it would be on infrequent occasions that the new plant would have to be cleaned, using the old methods. The claimant had not been one of the employees who were regularly in receipt of this dirty money at the old plant and he only received it when he was covering for a work colleague.

5. The claimant was not satisfied with the answers that he had received from Mr Watt to the bonus problem and he wrote on 21 April 2008 to Mr McQuillan, one of the Directors of the respondent, raising a grievance. In the meantime however the claimant was the subject of two disciplinary processes, which had nothing to do with the problems of the bonus payment dispute referred to above. The disciplinary matter ended in a first written warning being issued to the claimant on 28 May 2008. This was confirmed at an appeal on 26 June 2008, notice of which was sent to the claimant on 7 July. A second disciplinary process was instigated against the claimant, again on matters unconcerned with the bonus issue, at a meeting on 18 August 2008. A final written warning was issued on 18 August 2008.

6. As a result of this activity in the disciplinary field the respondent admits that it overlooked the grievance letter of 21 April 2008. The matters raised by that grievance are the same matters that have been raised by the claimant in this application to the tribunal, namely that the respondent has wrongfully deducted money from the wages payable to the claimant, in that the respondent has not paid the bonuses that were agreed on 15 December 2000. Alternatively the claimant claims that the respondent is in breach of contract concerning the non payment of the said agreed bonuses.

THE LAW

7. Under Article 45(1) of the 1996 Order “An employer shall not make a deduction from wages of a worker employed by him unless-

(a)………….

(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.”

Article 59 defines wages and the definition includes any bonus payable under his contract of employment or otherwise. In this case the bonus at the claimant’s first post in the old Toome plant.

8. Written notification of the change of employment was not given to the claimant after he was accepted for the new job in the new plant. He was told that his pay would remain the same as before but that a new bonus scheme would be introduced to reflect the capability of the new plant. The question for the tribunal is, did the respondent’s ceasing to pay the old bonus to the claimant, when he took up the new post at the new plant, constitute an unlawful deduction? Or was the claimant transferred to a new post which carried an entitlement to a new bonus scheme when put into place?

9. The tribunal was assisted in this case by the judgment of Lord Johnston of the Scottish Employment Appeal Tribunal, in the case of Hussman Manufacturing Ltd v Weir [1998] IRLR 288. In that case an employer moved an employee from one shift to another, as it was entitled to do under the employee’s contract of employment. The court held that if, as a consequence of that move, the employee’s income was reduced, this did not in itself amount to an unauthorised deduction from wages.

10. The learned Judge in that case also considered the matter of the implied term of trust and confidence which is contained in all employment contracts and which is owed by each party to the other. He suggested that the employer would be guilty of a breach of this term, if he acted unreasonably against the employee, by moving him from one shift to another to merely reduce his income, with no objective on the employer’s part of properly reorganising the working situation in the plant.

Reasons for the Decision

11. The tribunal holds that the respondent in reorganising its workforce on the completion of its new plant, which had the added problem of some required redundancies, acted within the terms of the claimant’s contract of employment in moving the claimant to a new job in the new plant.

12. The tribunal further holds that on the authority of the judgment in Hussman Manufacturing v Weir, that as a consequence of that move the claimant was no longer able to benefit from the old bonus scheme but became, like all the other employees at the new plant, entitled to a new bonus scheme to be put into place once the new plant was fully commissioned.

13. The tribunal in considering the implied term of trust and confidence, holds that the respondent had a genuine need to make changes in the method of production of tiles and that the new machinery being commissioned into the new plant had different characteristics and cleaning requirements to the old machines in the old plant and accordingly the respondent could not merely transpose the old bonus system to the new plant. The respondent was justified in bringing in the new bonus system. It was unfortunate that the new machinery took time to commission, with the consequent delay in the respondent bringing in the new bonus system. However at the time of the change over to the new plant, the employees were getting substantial overtime payments which continued to the time of the introduction of the new bonus scheme. The claimant, along with the other employees who had transferred to the new plant, was for a period, until the new bonus scheme came on stream on 1 September 2008, being paid less than he would have been paid at the old plant, if one leaves aside the overtime payments, which required the employees to work extra hours. However the tribunal hold that the claimant, like his other colleagues, was told that this was a new job at a new plant with new machinery and that a new bonus system would be introduced at commissioning of the plant. This being the case the employees who transferred accepted this situation and cannot claim that the non payment of the old bonuses is an unlawful deduction from wages or a breach of contract on the part of the respondent, as the claimant and the other employees who transferred to the new plant agreed to the revised terms offered by the respondent.

14. For these reasons the claimant’s claims under the 1996 Order for unlawful deduction from wages and for breach of contract are dismissed.

Chairman:

Date and place of hearing: 18 November 2008, Limavady

Date decision recorded in register and issued to parties: