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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Jamieson v AIB Group (UK) PLC T/A First T... AIB Group (UK) PLC T/A First T... AIB Group (UK) PLC T/A First T... [2012] NIIT 01815_10IT (14 May 2012)
URL: http://www.bailii.org/nie/cases/NIIT/2012/1815_10IT.html
Cite as: [2012] NIIT 01815_10IT, [2012] NIIT 1815_10IT
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THE INDUSTRIAL TRIBUNALS
CASE REFS: 1815/10
1816/10
1817/10
CLAIMANTS: Fiona Jamieson
Danielle Courtney
Danielle Spackman
RESPONDENT: AIB Group (UK) PLC T/A First Trust Bank
DECISION
The unanimous decision of the tribunal is that the claimants’ claims for breach of contract and unlawful deduction from wages are well-founded. The respondent is ordered to pay the outstanding wages in the sum agreed by the parties.
Constitution of Tribunal:
Chairman: Mr P Kinney
Members: Mr J Kinnear
Mr R Hanna
Appearances:
The claimants were represented by Mr O’Neill, Solicitor, of Thompsons McClure, Solicitors.
The respondent was represented by Mr Mulqueen, Barrister-at-Law, instructed by Tughans, Solicitors.
Findings of fact
1. Each of the claimants was employed by the respondent. Each received an annual increment on their pay from the commencement of employment until 1 September 2009 when the payment of the increment was deferred until 1 July 2009 after negotiations between the respondent and the Irish Bank Officials’ Association (‘IBOA’) which led to an agreement to pay the increment but deferring payment until 1 July 2009. No increment has been received by the claimants subsequently.
2. Initially the respondent contended that the claimants had no contractual entitlement to the annual increment; but Mr Mulqueen confirmed at the outset of the hearing that the respondent now conceded and accepted that the claimants had a contractual entitlement to the annual increments. The amount of the increments due to each claimants has been agreed between the parties. However, the respondent still resisted the payment of the increment on the following alternative grounds:-
(a) that it is implicit in the contract with each claimant that the respondent can refuse to pay the annual increments on foot of exceptional trading and/or business conditions; and
(b) that the respondent has an express power to unilaterally vary each contract on the basis of –
(i) an express term in each contract;
(ii) an express term in the ‘Info bank’ document, which the respondent contends is incorporated in each claimant’s contract; and
(iii) that the contractual terms relating to payment of the annual increment was frustrated. Mr Mulqueen sought to argue that only this aspect of the contract was frustrated with the remainder of the contract left intact.
3. The claimants’ terms and conditions relating to pay are governed by collective bargaining between the respondent and IBOA. The parties met on an annual basis. In 2009 the parties negotiations included the contractual increment. The respondent refused to pay the increment initially and after following the agreed procedures for resolving issues, agreed with the IBOA to make payment of the increment from 1 July 2009. The respondent reserved its right ‘to discuss issues relating to payment of increments and other pay elements in 2010 against the background of circumstances facing the Bank at that time’. At no time in these negotiations did the Bank assert or refer to any express or implied power to unilaterally vary the contract or contend that the particular provisions were subject to frustration.
4. On 2 December 2009 the then Group MD, Colm Doherty, published a message to staff. He stated that:-
“There can be no pay increases in 2010.”
This was confirmed in a letter from the Bank to the IBOA on 8 January 2010. In the correspondence between the Bank and the IBOA, no reference was ever made by the respondent to a unilateral variation of the contract or frustration of the particular term. The reason for non-payment was expressed to be the financial situation faced by the respondent and the need for support from the Irish Government. The tribunal heard evidence from Mr Larry Broderick, the General Secretary of the IBOA. We accept his evidence that he discussed the pay issue with Mr Murphy and separate commitments were made to negotiate the issue of pay.
5. The IBOA filed a grievance on behalf of the claimants and others. In dealing with the grievance the respondent again never suggested it had a right to unilaterally vary the term of a contract relating to pay or that the relevant terms were frustrated.
6. The respondent also seeks to rely on a document known as the Info bank document. The copy of the document produced to the tribunal runs to over 250 pages. Its purpose is described in an e-mail from Mr Simon Boulcott, Head of Human Resources, UK Division, dated 1 July 2010 which states:-
“The site is intended to give us all both an understanding of the policies and procedures that affect our employment and of our responsibilities with regards to all Human Resources and Group Policies when carrying out our day-to-day job role.”
Info bank was amended on 20 July 2010 to include the following:-
“The Bank reserves the right to review, revise, amend or replace the contents of the HR Section of Info bank, and introduce new policies and procedures from time to time reflecting the changing needs of the business.”
The document on the same page also acknowledged that:-
“ … conditions of employment are governed by the current agreement in existence between the Bank and the Irish Bank Officials’ Association.”
7. The IBOA never agreed the contents of the Info bank document and, in particular, the clause now relied on by the respondent to vary the contractual terms relating to pay. The IBOA were never informed or consulted with in relation to any unilateral right to vary the contract.
8. Each of the claimants had been provided with terms and conditions of employment. Common to each of these was a clause headed ‘General’. However, the wording in each case was slightly different. In the case of Ms Jamieson (first-named claimant) the clause provides:-
“The Bank will give you notice of any change of these terms within one month from the date of change.”
Ms Courtney’s (second-named claimant) provides:-
“In addition to changes negotiated under the various collective agreements, the Bank will give you notice of any changes in the agreed terms within one month from the date of the change.”
Ms Spackman’s (third-named claimant) provides:-
“The Bank will give you notice of any change in these terms (ie by mutual consent or negotiation) within one month from the date of change.”
Each Clause goes on to set out the various methods of such notification.
The law
9. The relevant law on contract is set out in the extensive written submissions of the parties and the tribunal confirms these were considered in reaching its decision.
10. The law relating to unlawful deductions from wages is governed by Article 45(1) of the Employment Rights (Northern Ireland) Order 1996 which states:-
“(1) An employer shall not make a deduction from wages of a worker employed by him unless –
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract; or
(b) the worker has previously signified in writing his agreement or consent to the marking of the deduction.”
Conclusions
11. The respondent conceded at the outset the contractual nature of the entitlement.
Implied right to vary because of financial conditions
12. The respondent sought to have inserted in the contract an implied right that it, as employer, could withhold contractual payments on foot of exceptional trading and/or business conditions. In his submissions, Mr Mulqueen contended that this right was a unilateral right and not available to the employees. It was specific to their contract of employment and would not apply, for example, to the contractual relationships between the Bank and its customers against the same factual background. Those customers could not avail of the same power of unilateral variation.
13. The tribunal is unanimously of the view that no such implied term exists. Any previous amendments to pay were dealt with within the collective bargaining system. The respondent did not seek to rely upon any such right in their negotiations with the IBOA. In their resolution of payment of the increment in 2009, the respondent sought to reserve the right to discuss pay issues in 2010. This is far from asserting a contractual right not to pay the increment. The tribunal is astonished that the respondent would seek to contend that it holds a right to unilaterally vary the terms of contracts with their employees because of the underlying financial circumstances the respondent faced in a difficult market place. This was compounded by the submissions that such a term should be implied into a contract of employment but not a commercial contract between the respondent and its customers. If anything, the tribunal consider that contracts of employment should have greater protection from such unilateral variations rather than less. The tribunal is satisfied that the parties would not have agreed to a unilateral right on the Bank’s part to vary pay because of financial and economic circumstances. The issue of pay was resolved in the collective bargaining process. There was no inequality of bargaining position. We do not consider it likely that the union would have agreed to such a term nor it is a term which is necessary or reasonable to be implied in the current circumstances.
Express contractual right
14. The tribunal does not accept any such express contractual right arises under the terms and conditions of the claimants for the following reasons:-
(a) Despite a disparity in wording, each clause on its ordinary meaning and read in a reasonable fashion is about the notification of change not the right to unilaterally vary a contract.
(b) At least one of the clauses which the respondent relies on, the case of the third-named claimant, expressly refers to changes by mutual consent or negotiation.
(c) In the case of the second-named claimant the clause refers to notifying changes ‘in addition to changes negotiated under the various collective agreements’. The issue of pay is governed by collective bargaining and collective agreement.
(d) The IBOA had collective bargaining rights relating to pay provisions. The alleged express contractual right was never discussed or negotiated with the respondent.
(e) None of the contractual terms now relied on have been used in similar fashion before.
(f) No notice linking the refusal to pay to this alleged power was ever given.
(g) The respondent gave different reasons for refusing the contractual increments during the negotiations and did not seek to rely on this clause until legal proceedings were instituted.
15. It appears to the tribunal that this amounts to an ex post facto justification of its actions built on the flimsiest of foundations.
Info bank document
16. The tribunal again dismisses the respondent’s contention that this document created a contractual right to unilaterally vary the contract and that it was in fact relied upon. The tribunal took into account the following factors in arriving at this conclusion:-
(a) The clause was first introduced on 20 July 2010. The tribunal does not accept this authorised and provided the basis for a decision communicated to the staff on 2 December 2009, some eight months previously.
(b) In the intervening months and during negotiations with the IBOA, no mention was made of this clause or indeed of any power to unilaterally vary the contract.
(c) No notice was ever given to staff, or the IBOA, before or after 20 July 2010, setting out the respondent’s reliance on this provision, until legal proceedings were initiated.
(d) The clause itself, whilst widely drafted is ambiguous. It refers to revisions and amendments to the contents of the HR Section of the Handbook. It makes no reference to the terms and conditions of employment or, in particular, to the provisions regarding pay. The same document, on the same page, contains a provision which expressly acknowledges that conditions of employment are governed by the collective bargaining process and a current agreement in existence.
(e) The tribunal heard evidence from Mr Boulcott. At times his evidence was less than impressive. Whilst Mr Boulcott was not directly involved in negotiations, he accepted that the Info bank clause was inserted without the knowledge or consent of the IBOA and was done at a time when there were substantial disputes on pay between the parties. When asked directly what his understanding of the clause was, as Head of the HR UK Division of the respondent, he said it gave the Bank the right to make changes to its policies and procedures; but made no mention of changes to the terms and conditions of employment, in particular pay.
Frustration
17. A contract may be frustrated if it becomes impossible to perform or the purpose of the contract is frustrated. The authorities provided to the tribunal, refer to the frustration of the contract as a whole. It is clear that neither party contends that the contract is impossible to perform, and that is an end to that argument.
18. If Mr Mulqueen is correct, and it is possible to sever just one term of a contract on the grounds of frustration, he has not put any evidence before the tribunal that the payment of the annual increment was rendered impossible by supervening events.
19. The tribunal rejects the argument that the contractual provisions relating to pay are frustrated.
20. The tribunal finds that the claimants’ claims for unlawful deduction from wages and breach of contract are well-founded. The parties have agreed quantum. Should there be any dispute a further hearing on quantum can be arranged.
Chairman:
Date and place of hearing: 9 – 13 January 2012;
3 February 2012; and
23 February 2012
Date decision recorded in register and issued to parties: