THE INDUSTRIAL TRIBUNALS
CASE REF: 240/13
CLAIMANT: John Moore
RESPONDENT: Belfast City Council
DECISION
The claimant’s unauthorised deduction of wages claim is not capable of quantification and falls outside the jurisdiction of the tribunal. The claimant’s claim is dismissed.
Constitution of Tribunal:
Chairman (Sitting alone): Ms M Bell
Appearances:
The claimant was represented by Ms Florence Smith, Solicitor, of Donnelly & Kinder Solicitors.
The respondent was represented by Mr Mark McEvoy, Barrister-at-Law, instructed by Legal Services, Belfast City Council.
1. The claimant in his claim complained that he had suffered an on-going unlawful deduction from wages from 7 September 2009 in relation to shift allowance and weekend enhancement payable to him as the result of payment being based on his former manual rate of pay rather than his new rate of pay following the acceptance of a package to vary his terms of employment. The claimant complained that in line with the information provided by the respondent during negotiations in 2009 to buy out contractual and compulsory overtime of security officers and control room operatives that he understood reference in the offer ultimately accepted to, ‘a revised and enhanced job description which will attract a re-grading and access to additional increments for each group and will enhance associated payments & longer-term pension entitlement’, to include an increase in shift allowance under, ‘associated payments’.
2. At hearing it was confirmed that the claimant’s complaint was in relation only to shift allowance and no longer included weekend enhancement.
3. In its response the respondent resisted the claimant’s claim on the basis that the final offer made no representation in respect of shift allowance and formed no part of the offer made. The respondent contended that wording in the final offer was changed to exclude the original and by then demonstrably inaccurate reference made in illustrations provided at the outset of approximately five months of negotiations that ‘..shift allowance [would] go up because [it is] linked to the basic rate’ at that time based on the belief that this was to change, and instead stated that the proposal ‘will enhance associated payments and longer-term pension entitlements’. The respondent contended it had become clear to all concerned in the interim through working groups debating the issue of shift allowance being paid to former manual council staff under a longstanding national provision at a lower rate than their former APT&C colleagues, that shift allowance was not an ‘associated payment’ as the old anchor point had not been re-negotiated. Also illustrations provided at the outset were to show the relative overall change in pay if proposals were or were not accepted and shift allowance remaining based on the ‘old anchor point’ rather than the new basic rate did not affect the relative increase arising from any re-grading.
ISSUES
4. The issues before the tribunal were:-
· Has the claimant suffered an unauthorised deduction from wages in respect of the payment of wages arising from the payment of shift allowance at the rate of 16% of Former Manual SCP6 from 7 September 2009 until 30 January 2009?
· If so, what loss has the claimant suffered?
5. At the outset of the hearing the parties referred to a prepared draft list of disputed legal and factual issues. It was common case put at hearing that The National Agreement on Pay & Conditions of Service (otherwise referred to as ‘the new Green Book’) allows for local agreement to be reached in respect of shift allowance paid although it was disputed by the respondent that a local agreement had in effect been agreed to include a provision in respect of enhanced shift allowance for the security unit as a result of the negotiations and acceptance of the final offer put by the respondent on 20 August 2009. Remaining relevant issues in dispute may be summarised as follows:-
· Does the reference to associated payments in correspondence dated 28 August 2009 include shift allowance?
· Does the respondent have a legal obligation to pay the claimant shift allowance as from 7 September 2009 at the rate of 16% based on the relevant point of his new Scale 3 pay rather than 16% of his former manual scale ‘SCP6’?
· Was a local agreement formed in respect of the Security Unit, to include a provision in respect of the payment of enhanced shift allowance?
EVIDENCE
6. The tribunal considered the claim, response, agreed bundle and additional loose documentation provided by the parties and heard oral evidence from the claimant, Mr Jim Parker branch secretary for Unite the Union, and from Mr George Wright the respondent’s head of facilities management.
FINDINGS OF FACT
7. The claimant has been employed within the Security Unit of the respondent since July 1994.
8. The claimant’s conditions of employment on engagement provided:-
‘Remuneration:
The wages will be determined by the Council in line with that determined by the National Joint Industrial Council for Local Authorities Services (Manual Workers).
Currently grade 3- £152 per week, plus appropriate shift allowance and weekend enhancements.’
9. Section 5, Paragraph 8(a) (ii) of the Northern Ireland Joint Council for Local Authorities’ Services (Manual Workers) Handbook provides that, operative from 1.9.90, a shift worker shall be paid, ‘16% of Grade 3 on rotating shifts’. Accordingly the claimant was paid by the respondent a shift allowance at a rate of 16% of the manual scale SCP6 being £76.65 per fortnight.
10. The shift allowance paid to the claimant as a former manual or ‘blue collar’ worker did not vary with his basic rate but always remained tied to the fixed nationally set anchor point. This sat at odds with arrangements in place for management and administrative or ‘white collar staff’ whose shift allowance payments varied with their basic rate of pay. No evidence was presented as to the percentage rate at which shift allowance is paid to ‘white collar staff’.
11. The National Agreement on Pay & Conditions of Service which came in 1997 allows for a local agreement to be reached in respect of the shift allowance to be paid to shift workers.
12. For a number of years the respondent had been involved in discussions on a corporate (respondent wide) level between the Unions and management through the mechanism of the Joint Working Arrangements Working Group regarding harmonisation of terms and conditions of employment for council employees. Matters for discussion included shift allowance. The claimant dealt with local issues and was not involved in the working group discussions.
13. Minutes of the Joint Working Arrangements Working Group between November 2008 and May 2009 at which Mr Parker was in attendance record shift allowance as being ‘a priority 1’ and refer to on-going collation of information on shift patterns worked by council employees. No formal management position on allowing increases to shift allowance payments was put forward by the respondent for consultation during this time period.
14. The claimant was a shop steward for Unite the Union for the Security Unit and in this capacity attended a meeting on 18 June 2009 conducted by Mr Wright. At the meeting a PowerPoint presentation was given to the trade union representatives outlining a proposed package of changes by the respondent to the Security Unit employee’s terms of employment with the intention of reducing the respondent’s spend on overtime. The two main components proposed were:-
· a buyout of contractual overtime for a lump sum, and
· the removal of compulsory overtime with the development of new shift working arrangements in return for which staff would be re-graded up one grade.
A hard copy information pack was provided by the respondent for trade union representatives. The ‘Proposal outline’ set out by the respondent proposed;
- a reduction in the working week to 37 hours on rotating shifts,
- a lump sum payment to end contractual overtime,
- the discontinuance of compulsory weekend overtime,
- to agree a revised job description and re-grade all staff up one grade.
Under ‘Financial offer’ potential outcomes listed included:
· ‘Increased basic rate/ grade
[…]
· enhanced shift allowance
· enhanced W/E enhancement
· enhanced O/T rate’.
The respondent set out under,
‘Summary of financial offer […]
· contractual overtime abolished; bought out at approx.. £6,000 per person;
· compulsory overtime abolished; posts re-graded on new JD to make up the difference;
· w/e enhancement, shift allowance & O/T rate all go up because they are linked to basic rate;
· working week reduced to 37 hours – improved work life balance;
· pension enhanced in longer term (both lump-sum and monthly payments).’
Under ‘Summary’, the respondent stated, ‘this offer is a package and can only be accepted as a whole: we will not allow it to be cherry-picked’.
15. At the meeting in June 2009 the respondent presented financial illustrations to try to show potential relative financial outcomes for security staff if the proposals were, and in the alternative, were not accepted. In preparing these illustrations the respondent made various assumptions including allowing for a national pay increase (which did not subsequently occur) and calculated shift allowance based on the assumption that agreement would soon be reached for this to be enhanced. The respondent relied on these assumptions for its calculations of both the potential outcome if the proposals were, or, were not, accepted so as to show the relative difference in outcomes and used the figures to prepare graphs which were shown at the presentation. In the proposal information pack the table of financial calculations for the ‘security officer costing’ included under both options, that is, remaining on scale 2 with compulsory overtime and otherwise moving to scale 3 without compulsory overtime, a column headed, ‘shift allowance (16% of basic)’ and thereunder calculated shift allowance payments at the rate of 16% of basic pay for both options.
16. Mr Wright subsequently wrote a letter dated 6 July 2009 addressed to all security unit shop stewards regarding the proposed package of changes to, ‘hours, shifts, pay, numbers, duties and related matters’, following their attendance at the meeting with him in which he confirmed that they had as arranged provided copies of the proposals for information at each site currently covered by the unit and a series of voluntary staff briefings which were to take place that week, also that they intended to distribute a special edition of the Security Bulletin to all staff to ensure the proposals were available and understood by all. Mr Wright proposed a further meeting with the trade unions on 23 July 2009 the purpose of which would, ‘be to consider the views of staff following the consultative exercises, and to consider whether or not a negotiated solution appears to be possible on the basis of the principles outlined previously. If it appears that agreement may be forthcoming on the underlying principles, we can go on to consider any practical matters (eg the scale of any buyout, the details of proposed shift arrangements, the contents of JDs [job descriptions] etc.) arising.’
17. Following Mr Wright’s letter the respondent issued in July 2009 a security news bulletin to security staff, ‘concentrating solely on the details of the proposed package of operational changes which is currently being discussed with the various trade unions. We have set out the main issues below, in order to help you understand what is being offered and what the various issues are....’ Under ‘Overtime’ the bulletin set out, ‘[t]he proposal involves developing 37 – hr per week shifts with unpaid breaks wherever possible….Obviously these shifts would make both of the regular elements of overtime un-necessary. In order to protect earnings and terms & conditions of staff the following is proposed:
· To buy out the contractual overtime at the agreed Single Status level of 3 times the annual loss, producing a buyout figure of approx... £6,000 per person (gross); and
· To develop and agree an updated job description which takes account all of the appropriate factors and which moves us towards a more modern and efficient service which will allow us to re-grade staff 1 grade upwards (and which will also help to make up for the loss of ‘compulsory’ overtime).
This would have a number of associated benefits in that it would:-
· Provide access to a further 3 increments;
· Enhance the value of any overtime worked;
· Increase all payments linked to the basic rate (i.e. shift allowance, w/end enhancement);
· Enhance the pension entitlement of staff; and
· mean a shorter working week and enhanced work/life balance for staff.
It is not possible to illustrate here how this proposal will [a]ffect each individual, because there are a number of factors which make this difficult.’
The bulletin confirmed, ‘And finally [….]
We are due to meet your trade union representatives again to gauge their opinions on 23 July 2009. The purpose of this meeting is to see if the broad principles (rotation, pool cover, 37-hr week, removal of contractual / compulsory overtime, new JD [job description] etc.) are acceptable to staff. If we can get acceptance of the general principles we are, of course, willing to consider some of the more detailed issues which have emerged over the past couple of weeks and to provide written assurances if necessary.
We hope to eventually obtain trade union agreement for a secret ballot on the final proposals, which would need to take place in very early September 2009 if we are to meet the timescales on which this package depends.’
18. A further meeting took place between the respondent and trade union representatives including the claimant on 23 July 2009 at which minutes record Mr Wright by way of recap and update confirmed,
‘● Package complies with the SSA [Single Status Agreement] and that all figures have been checked by payroll and legal aspects of the package by legal services.
● Has had five briefings with staff since the last meeting, of which there was 70% attendance & has distributed the proposals package’
In discussing Steward and Trade Union member feedback Mr Wright is recorded as confirming, ‘Over the next 4-6 weeks, when package is being implemented, there will be a proposed transition / disruption payment made to staff for the upcoming changes & upheavals.’ Also, that Mr Wright ‘gave assurances that there would be no backsliding on the deal & that everything would be put in writing.’
19. Mr Wright wrote a letter on 24 July 2009 to all security officers in which he set out, ‘As you know a comprehensive package of changes to hours, shifts, payments, job descriptions and other issues has been under discussion with your trade union representative for some time. We recently organized a series of briefings in order to explain the essential elements of the proposals to staff, and followed this up with a special edition of the Security Bulletin.
We met again with your trade union representatives on Thursday, 23 July and following some discussion a final improved package of proposals has been tabled. Essentially this proposal involves:-
· the introduction of a shorter, standard 37- hour working week […]
· the removal of the 3- hours per week of contractual overtime, to be bought out […] in the sum of £5,953( gross);
· the removal of ‘compulsory’ overtime […]
· the development of an agreed new job description, and a re-grading to SC3 on foot of this change, bringing a higher basic rate and access to 3 further increments; and
· the payment of a one-off ‘transition / disruption’ payment of £500 per person (gross) in respect of the additional flexibility and potential disruption which will be involved in moving staff to the new arrangements.
In total, the buyout and transition payment would result in a lump-sum payment of approximately £6,453 (gross) which is almost £600 more than the original proposal, the new grade would increase earnings once at the top point of the new scale by nearly £600 per annum [….]
It was made clear at today’s meeting that management side cannot improve upon this offer, and it was accepted in principle by all of the trade unions as the best that could be achieved by negotiation in the circumstances (although we will continue to discuss some of the practical detail around shift rotas and job description text etc, with a view to further improving these by agreement so far as possible) and should be put to staff in a ballot [….]’
No mention was made therein in respect of shift allowance.
20. At a meeting of the respondent’s Strategic
Policy & Resources Committee on 21 August 2009 Mr Wright
provided a report setting out the package of measures developed and tabled with
the trade unions. Minutes record that ‘a dedicated edition of the ‘Security
Bulletin’ was produced setting out the proposals and copies were
distributed to all staff. Mr Wright reported that, ‘The proposed changes
have now been discussed with the various trade unions on a number of occasions,
and are now accepted by them as the best that can be achieved by negotiations
in the circumstances’ and that it had, ‘been emphasized to the trade unions and
staff that the proposals are only available as a package; we will not permit
the
‘cherry-picking’ of the various provisions and it has been made clear that, if
a package cannot be agreed, we will proceed to deal with each of the individual
issues using the existing policies and mechanisms.’ The Committee endorsed the
package of proposals set out in the report and authorised Mr Wright to make
a formal offer on that basis.
21. Mr Wright in a letter to Mr Albert Mills of Unite on 24 August 2009 confirmed the Strategic Policy & Resources Committee’s approval of the contents of the offer on 21 August 2009 and confirmed that the approval would be subject to full Council ratification on 1 September 2009. Mr Jim Parker agreed that in the absence of Mr Mills on leave that he would co-ordinate the balloting of Unite members.
22. Mr Wright wrote a letter on 28 August 2009 to Mr Parker and representatives of the GMB and NIPSA,
‘RE; SECURITY UNIT- PROPOSALS FOR BALLOT
I am writing to confirm the final package of operational changes in respect of the staff within the Security unit. I have attached a number of documents, as follows:-
· a summary of the financial, pay & grading and shift roistering proposals;
·
a copy of the revised job
descriptions for both Security Officer and
Control-Room Operative staff showing the revised grades; and
· a copy of the risk assessment developed at management’s request in respect of the modest ‘lone-working’ requirement (2 days per month) for Control Room staff.
In essence, the package involves the following;-
· the discontinuation of contractual overtime for all staff and a buyout of this facility based on 3 x times the annual loss (£5,953 for Security Officers and £6,385 for CROs);
· The implementation of standard, Single Status – compliant 37-hour per week shifts […]
· The discontinuance of between 8-12 days per annum of ‘compulsory’ overtime;
· The acceptance of a revised and enhanced job description, which will attract a re-grading and access to additional increments for each group and will enhance associated payments & longer-term pension entitlement;
· The payment of a one-off payment of £500 per person to reflect the difficulties of making the necessary transition to the new arrangements […]
· A significant reduction in time-at-work through the removal of contractual and ‘compulsory’ overtime and the consequent improvement of work-life balance.
It is the overall package which staff should be asked to ballot on; the various elements are not available individually [….]’
No express mention was made of shift allowance in Mr Wright’s letter or any provision for the quantification of any enhancement thereof.
23. Mr Parker carried out a ballot of Unite Security officers and confirmed (in writing on 16 September 2009) to Mr Wright that they had accepted the Final Package. No detail of what members including the claimant were asked to vote upon was provided to the tribunal at hearing.
24. On 17 September 2009 Mr Wright wrote a letter to all permanent security officers that each of the union’s ballots had produced a vote in favour of acceptance and Payroll had been notified to implement the re-grading from SC2 to SC3 and to pay agreed buyout and disruption payments.
25. In January 2010 the claimant became aware that his payment of shift allowance was continuing to be paid at 16% of the nationally fixed anchor point amounting to £76.65 per fortnight.
26. At a meeting of the joint management / trade union arrangements working group on 28 May 2010 the respondent confirmed that it would not be taking forward harmonisation of shift allowance due to affordability in the current economic climate.
27. The claimant presented his claim to the office of the tribunals on 30 January 2013.
THE LAW
28. Article 45 of the Employment Rights (Northern Ireland) Order 1996 provides for a worker’s right not to suffer unauthorised deductions from wages by his employer. A deduction occurs when the employer pays less than the amount properly payable to the employee on that occasion and the amount of the deficiency is to be treated as a deduction.
29. To decide what is properly payable a tribunal may determine what the relevant payment term said. The tribunal’s task then is to decide whether there is a sum legally payable and only if so to then consider whether there is a deduction from that sum within the 1996 Order.
30. A communication not made with the intention that it is to become binding immediately on notification of assent by the addressee is an invitation to treat as distinguishable from an offer which is made with the intention that it is to become binding on communication of assent to its terms.
31. In Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28 [1998] 1 WLR 896, [1998] 1 All ER 98 Lord Hoffmann set out principles by which contractual documents are nowadays construed. In essence the words used in a contract must be understood to bear the meaning which they would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were in at the time of the contract.
32. In Coors Brewers v Adcock [2007] EWCA Civ 19, [2007] ICR 983, [2007] IRLR 440 the Court of Appeal of England and Wales held that in order to fall within the definition of wages it is necessary for a specific sum which the employee claims he has not been paid to be capable of identification, otherwise if this is not possible and the court has to assess the sum owing then the claim must be pursued as one for damages for breach of contract.
33. Contractual terms must be sufficiently clear and certain in order for courts to be able to give them meaning. In Polymer Products Ltd v Power EAT 599/80 it was held that a term that the employee would be offered new duties, relocation allowance and salary ‘all to be agreed’ on transfer of job location was held to be too vague and uncertain to be binding but was just an, ‘agreement to agree’.
APPLICATION OF THE LAW TO FACTS FOUND
34. Ms Smith contended that the claimant and his colleagues were offered a package, details of which were presented by way of the presentation, meetings, briefings and security bulletin which fed into and was finally summarised by the letter of 20 August 2009 which in effect amounted to a local offer as allowed for under the Green Book and was accepted by the claimant. Ms Smith put it that following a local agreement reached in summer 2009 the claimant had a contractual agreement to be paid shift allowance at the rate of 16% of his new Scale 3 pay. Throughout the presentation, meetings and security bulletin reference was made to enhanced shift allowance and shift allowance going up because it was linked to the basic rate and specific calculations were provided. The package was to be as accepted as a whole with no cherry picking. At no time was it indicated to the claimant at any time that anything was being taken away from the package. The word ‘associated’ was used when describing benefits of the package and specific reference made to, ‘increase all payments linked to the basic rate (i.e. shift allowance and weekend enhancement.)’ Ms Smyth submitted that associated payments include shift allowance, that it is not possible to look at the final offer letter in a vacuum but important to look at it in context as advocated by Lord Hoffman in Investors Compensation Scheme Limited v West Bromwich Building Society .
35. Mr McEvoy submitted that industrial relations require that both parties should be able to express and evolve their positions and referred to Chitty on Contracts, 31st Edition, Volume 1, Para 2-007 which sets out that ‘[w]hen parties negotiate with a view to making a contract, many preliminary communications may pass between them before a definite offer is made. […]’ and that, ‘it has been held that a draft document, sent in the course of contractual negotiations with the clear intention of eliciting further comment from the recipient, was not an offer.[…]’. Mr McEvoy contended that the claimant’s case is based on a misapprehension that illustrations and reference in other documents provided in the course of an evolving dialogue between parties formed part of the final offer whereas the offer included only what was specified in the letter of 20 August 2009. Illustrations provided were based on assumptions, nothing more, about what re-grading could entail and hopefully would crystallise in due course. There was no certain offer or acceptance which would create entitlement to shift allowance at a rate of 16% of the relevant point of Scale 3. There was no quantification of the alleged entitlement in order for this to have been unlawfully withheld. No local agreement was formed; none of the necessary characteristics were present. Reference to ‘associated payments’ by Mr Wright was not intended to include shift allowance and he was not in a position to include shift allowance in this offer and the claimant’s union would and should have known this. Mr McEvoy submitted that industrial terms must be sufficiently clear to give them meaning referring to the case of Polymer Products Ltd v Power in which a term related to a transfer of job location was held to be no more than an agreement to agree and he contended that the parties discussions in June 2009 amount to no more than demonstration of the respondent’s agreeability to some form of proposals at a later date and to argue any other significance lacks certainty. The claim is incapable of quantification because of lack of agreement at corporate level. Applying the English Court of Appeal in Adcock Mr McEvoy submitted that the claim if for anything is for damages for loss of chance that if the respondent had put in place a position around shift allowance the effect would have been the claimant would have received some benefit which absent such a scheme he did not receive and as such is out with the tribunal’s jurisdiction as the claimant’s employment has not come to an end.
36. What did the relevant payment term say? / Does the reference to associated payments in correspondence dated 28 August 2009 include shift allowance?
The tribunal considers that the initial presentation, proposal documentation along with the security bulletin were part of evolving negotiations between the parties made to elicit comments, they were not made with the intention by the respondent for it to be immediately bound at that stage on a communication on behalf of the claimant of assent to the terms therein and did not as such amount to an offer. Following on from these negotiations the respondent made an offer set out in its letter of 28 August 2009 which following a ballot was accepted on behalf of the claimant thus forming the contractual agreement reached between the parties. This letter makes no specific reference to shift allowance. The question however arises whether the reference to associated payments in this correspondence includes shift allowance? In deciding what meaning the words ‘associated payments’ used therein should have, applying Lord Hoffman’s guidance the tribunal is persuaded on balance that a reasonable person having all the background knowledge which would have reasonably been available to the parties in the situation in which they were at the time of the contract would have understood ‘associated payments’ to include shift allowance in particular in view of the similar terminology used in the security bulletin’s explanation that proposals, ‘would have a number of associated benefits […]’ and listed one of these as, ‘Increase all payments linked to the basic rate (i.e. shift allowance, w/end enhancement);’
37. Does the respondent have a legal obligation to pay the claimant shift allowance as from 7 September 2009 at the rate of 16% based on the relevant point of his new Scale 3 pay rather his former manual scale ‘SCP6’? / Was a local agreement formed in respect of the Security Unit, to include a provision in respect of the payment of enhanced shift allowance?
The tribunal considers that there was at no point a clear offer made and accepted giving rise to a contractually certain term as to the percentage rate and pay scale upon which an enhanced payment would be calculated. Ms Smyth relied on 16% of basic as referred to and used in illustrations at the outset of negotiations as being the appropriate rate for calculation of shift allowance from September 2009. Whilst illustrations at the outset of negotiations calculated shift allowance at a rate of ‘16% of basic’ should an offer be accepted, the same rate was also relied upon of ‘16% of basic’ for illustrations of potential outcome should an offer not be accepted. No evidence was presented at hearing on which the tribunal is persuaded that that upon harmonisation or enhancement of shift allowance payable to ‘blue collar staff’ that shift allowance would continue to be calculated at a rate of 16% on the new applicable pay rate. The tribunal does not consider that the rate for the enhanced payment was a matter reasonably ascertainable with reasonable certainty by reference to background documentation. In the circumstances the tribunal is not persuaded that the respondent has a legal obligation to pay the claimant shift allowance as from 7 September 2009 at the rate of 16% based on the relevant point of his new Scale 3 pay rather his former manual scale ‘SCP6’. The tribunal is not satisfied on the evidence before it that negotiations between the parties from June 2009 resulted in the creation a local agreement such that enhancement to shift allowance would be quantified at the certain rate of 16% of basic pay for the security unit rather than 16% of the fixed national anchor point.
CONCLUSION
38. The tribunal considers that it is not possible for it to assess the sum owing, the claim is properly one for damages for loss of the chance that, if the respondent had put in place a position around shift allowance, the effect of that position would have been that he would have received some benefit which in the absence of such a scheme he did not receive and as the claimant’s employment is continuing his remedy lies elsewhere. The claimant’s claim is dismissed.
Chairman:
Date and place of hearing: 16 and 17 April 2013, Belfast.
Date decision recorded in register and issued to parties: