Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF: 386/16

 

 

 

CLAIMANT: David McCartney

 

 

RESPONDENT: Mercury Security Management Ltd

 

 

 

DECISION

The unanimous decision of the tribunal is as follows:

 

(A)          The claimant's unlawful deduction of wages complaint is not well-founded. Accordingly, that complaint is dismissed.

 

(B)          The claimant's breach of contract claim has been withdrawn and accordingly it is now dismissed.

 

 

Constitution of Tribunal:

Employment Judge: Employment Judge Buggy

Members: Ms L Gilmartin

Ms M J McReynolds

 

Appearances:

The claimant was represented by Mr B Mulqueen, Barrister-at-Law, instructed by O'Hare Solicitors.

The respondent was represented by Mr Patrick Moore.

REASONS

 

1.             In 2010, the claimant began to work as a CCTV operator at Bridge Street in Coleraine, and he continues to work there in that capacity. From the commencement of his employment there until 31 October 2015, his employer was G4S. Then, the respondent ("Mercury") became his employer. Throughout the period since then, Mercury was his employer, and Mercury continues to be his employer.

 

2.             The parties to these proceedings are agreed that, on or about 31 October 2015, there was a "relevant transfer" within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPER"), of the entity to which the claimant was assigned at the time of that transfer. It is also agreed that, as a result of that transfer, the claimant's contract of employment with G4S has had effect thereafter as if it had originally been made between the claimant and Mercury.

 

3.             Since 1 December 2009, relevant CCTV operators (CCTV operators who do the type of work which the claimant does) are legally obliged to have a CCTV licence. That is a licence which is granted by the Security Industry Authority ("the SIA"). The claimant would be acting unlawfully if he were to carry out his duties, in his present post, without having a CCTV licence.

 

The claims and the defences

 

4.             These proceedings were begun on 28 January 2016. The details of the claimant's claim were very briefly set out at paragraph 7.4 of the claim form in the following terms:

 

"Breach of TUPE regulations resulting in a breach of contract".

 

5.             The factual basis for that claim was set out in a letter which the claimant sent to Mercury on 21 February 2016. As that letter made clear, the claimant's complaint is that Mercury failed to make a payment to the SIA in respect of the 2016 renewal of his CCTV licence.

 

6.             The parties are agreed that there is nothing in TUPER which creates a freestanding remedy in respect of the non-payment of the licence fee.

 

7.             The parties are also now agreed that an industrial tribunal has no power to entertain a breach of contract claim in this case, because the claimant is still employed by Mercury.

 

8.             The claimant was granted leave to amend his claim form, so as to add a claim for unlawful deduction of wages, in respect of his non-payment complaint.

 

9.             The claimant has withdrawn his breach of contract claim. Accordingly, that claim is dismissed.

 

10.          The unlawful deduction of wages ("UDW") claim is opposed by the respondent on the following grounds. According to Mercury:

 

(1)           The employer was not under any contractual obligation to pay for the relevant licence.

 

(2)           In any event, any such contractual entitlement did not constitute "wages" for the purpose of the UDW legislation.

 

(3)           In any event, at the time these proceedings were begun, there had been no "deduction" within the meaning of the UDW legislation.

 

The UDW statutory provisions

 

11.          In respect of Northern Ireland, the UDW statutory provisions are contained at Part IV of the Employment Rights (Northern Ireland) Order 1996 ("ERO"). That part consists of Articles 45-59 of the ERO.

 

12.          In respect of Great Britain, the UDW statutory provisions are contained in Part II of the Employment Rights Act 1986 ("ERA"). Part II consists of sections 13-27 inclusive.

 

13.          In light of the structure, wording, and enactment history of Part II of ERA, and in light of the structure, wording and enactment history of Part IV of ERO, it is obvious that the scope and meaning of the provisions of Part IV of ERO were intended to be the same, for practical purposes, as the scope and meaning of Part II of ERA.

 

14.          Part II of ERA repealed and re-enacted the provisions of sections 1-10 of the Wages Act 1986.

 

15.          In light of the detailed provisions, framework and enactment history of the relevant provisions of the 1986 Act, and in light of the detailed provisions, structure and enactment history of Part II of ERA, it is obvious that the meaning and scope of the provisions of Part II of ERA was (in all respects which are relevant in the present context) intended to be the same as the meaning and scope of sections 1-10 of the 1986 Act.

 

16.          Sections 1-10 of the 1986 Act were intended to replace the provisions of the Trucks Acts (the Truck Act 1831, the Truck Amendment Act 1887, the Truck Act 1896 and the Truck Act 1940).

 

17.          In summary, the main purpose of the Trucks Acts was to protect relevant workers (workers who were within the scope of the protection of the Acts) from abuses in connection with the payment of "wages". It seems that, for the purposes of the Truck Act, "wages" (as defined in section 25 of the Truck Act 1831) meant:

 

"... any money or other thing had or contracted to be paid, delivered or given as a recompense, reward or remuneration for any labour done or to be done, whether within a certain time or to a certain amount, or for a time or an amount uncertain ...".

 

18.          The 1986 Act contained several Parts. Part I, which consisted of sections 1-11, was entitled "Protection of Workers in Relation to the Payment of Wages".

 

19.          The purpose of Part I of the 1986 Act was identified in the Act's preamble, which stated that, among other things, the Act was being enacted to:

 

"... make fresh provision with respect to the protection of workers in relation to the payment of wages ...".

 

20.          Against the background indicated above, it would be incorrect to regard an industrial tribunal's UDW jurisdiction as having a material scope which is identical to the scope of an industrial tribunal's breach of contract jurisdiction. (Nobody in this case has made any such suggestion). The reality is that the UDW provisions have a more refined purpose: they are designed to protect workers in relation to the payment of some, and only some, of the sums which are due to those workers pursuant to a relevant contract of employment.

 

21.          The following are the main relevant elements of Part I of the 1986 Act.

 

22.          Section 1 prohibited an employer from making "any deduction from any wages of any worker employed by him" unless the relevant deduction was of a kind which was authorised by section 1 itself.

 

23.          Accordingly, to fall with the prohibition contained in section 1, both of two conditions had to be met:

 

(1)   There had to have been a "deduction" with the meaning of the Act.

 

(2)   That deduction had to have been made from "wages".

 

24.          Subsection (1) of section 1 of the 1986 Act contained the central restriction which is at the heart of the legislation:

 

"(1) An employer shall not make any deduction from any wages of any worker employed by him unless the deduction satisfies one of the following conditions ... ".

 

25.          It is agreed between the parties that, in the circumstances of this case, none of the "conditions" referred to in the quoted extract from subsection (1) of section 1 was satisfied.

 

26.                  Section 8(3) of the 1986 Act provided as follows:

 

"(3) Where the total amount of any wages that are paid on any occasion by an employer to any worker employed by him is less than the total amount of the wages that are properly payable by him to the worker on that occasion (after deductions) then, [subject to an exception which is irrelevant in the circumstances of this case] the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion".

 

The provisions of Article 45(3) of ERO are practically identical to the provisions of section 8(3) of the 1986 Act.

 

27.          In Delaney v Staples [1991] ICR 321, the English Court of Appeal held that there could be a "deduction" within the meaning of the relevant definition even if there was a total failure to make payment of any part of the relevant sum which was due.

 

28.          Section 7 of the 1986 Act contained the definition of "wages" for the purpose of the UDW provisions of that Act.

 

29.          According to subsection (1) of section 7, for the purposes of the UDW legislation, "wages", in relation to any particular worker, means any sum payable to the worker by his employer in connection with his employment, other than any payment which falls within subsection (2) of that section.

 

30.          In particular, the section 7 definition made it clear that "sums payable to the worker by his employer in connection with his employment" included:

 

"(a) any fee, bonus, commission, holiday pay or other emolument referable to [the worker's] employment ..."

 

other than any payment which fell within the scope of subsection (2) of Section 7.

 

31.          The payments listed at subsection (2) included:

 

"(b) any payment in respect of expenses incurred by the worker in carrying out his employment ...".

 

The evidence

 

32.                  We received oral evidence from the claimant.

 

33.          We also saw a bundle of documents, and some miscellaneous documents.

 

The arguments, the Submissions and the Comments

 

34.          Our understanding is that the parties are agreed that the claimant cannot be successful in these proceedings unless the tribunal concludes that he had a contractual entitlement to reimbursement of the cost which he incurred in renewing the relevant licence. Accordingly, that question (the question of whether or not Mercury was under a contractual obligation to reimburse the claimant in respect of the relevant licence expenditure) is one of the issues in the case.

 

35.          According to Mercury, even if that first issue were to be resolved in the claimant's favour, this UDW claim is nevertheless doomed to failure because, on
28 January 2016 (the date of commencement of these proceedings), the claimant had not incurred any expenditure in respect of the renewal of his licence. Therefore, according to the respondent, on 28 January 2016, there had been no deduction from his wages.

 

36.          Mercury also asserts that, even if the claimant had a contractual entitlement to reimbursement of the amount spent by him on renewal of the licence, and even if, in that connection, there is deemed to have been a "deduction" by the time of the commencement of these proceedings, he is still not entitled to succeed in these proceedings, because the relevant deduction related to a "payment in respect of expenses incurred by him in carrying out his employment", within the meaning of sub-paragraph (b) of paragraph (2) of Article 59 of ERO. (The equivalent provision of the 1986 Act was paragraph (b) of subsection (2) of section 7).

 

37.          Mercury continues to accept that the type of "payment" which is being contended for in this case falls squarely within the scope of subsection (1) of Article 59, but now asserts that the relevant payment is nevertheless outside the scope of the UDW definition of wages because it falls within the scope of the exclusionary provisions of subparagraph (b) of paragraph (2) of Article 59.

 

38.          The question of whether the deduction being contended for in this case fell within the scope of paragraph (2)(b) is a question which I myself raised with the parties.

 

39.          At the end of the hearing, the parties presented oral arguments.

 

40.          In addition, with the consent of the parties, arrangements were made in relation to the provision of written submissions ("Submissions") from each of the parties, in relation to the prematurity issue and in relation to the "expenses issue". (See above).

 

41.          The procedures in relation to those Submissions broadly follow those recommended by the EAT in Barking and Dagenham London Borough v Oguoko [2000] IRLR 179. Under those arrangements, each party was to provide a Submission, within a stipulated timescale, on the understanding that a simultaneous copy was to be provided to the other party in the case. Pursuant to those arrangements, a Submission was presented on behalf of the claimant and a Submission was also presented on behalf of the respondent. Under the same arrangements, each party was entitled to provide written comments ("Comments") in respect of the opposing party's Submissions, provided that this was done within a stipulated timescale. The claimant presented Comments. The respondent presented no Comments.

 

42.          The Submissions and Comments process was completed in early April.

 

43.          As was made clear to the parties, each party was entitled to require the convening of an oral hearing, for the purpose of considering the contents of any Submission or Comments, or for the purpose of considering any alternative oral arguments which either party might wish to present in respect of the topics which were the focus of the Submissions. Nobody asked for the scheduling of such a hearing, and no such hearing was held.

 

The course of the proceedings

 

44.          Towards the end of the main hearing, we drew the attention of the parties to the reference, in Article 59 of ERO, to the exclusion of certain "expenses" from its definition of wages. At that time, by agreement, it was directed that the "expenses" issue would be explored during the course of the Submissions and any Comments (See paragraph 40 above).

 

45.          At paragraph 11 of the claimant's Submission, it was suggested on behalf of the claimant that he was being disadvantaged because of the fact that the "expenses" issue had not been ventilated prior to the conclusion of his oral testimony. However, during the hearing, neither party asked for the claimant to be recalled as a

 

witness for the purpose of facilitating the provision of oral testimony in respect of the "expenses" issue.

 

46.          We can understand that the claimant and/or his representatives may be frustrated that the "expenses" issue was raised by the tribunal, and not by the respondent.

 

47.          Our position in relation to that particular matter is as follows. First, it is noted that in a number of reported decisions, it has been suggested by courts, at senior level, that the identification of the material scope of the UDW legislation is a jurisdictional matter (as distinct from being a matter which can be resolved through the agreement of the parties). Secondly, even if the proper definition of wages is not a jurisdictional issue, it seemed to us that it would not be appropriate for us to arrive at an adjudication on the merits in this case without having been addressed on the "expenses" issue, which is such a fundamental feature of the definition of wages in the UDW legislation.

 

48.          It is true that, throughout the period while the claimant was providing oral testimony, the respondent never challenged the claimant's express or implicit contention that any failure to pay the licence fee related to an alleged failure in respect of "wages" for the purposes of the UDW legislation. However, when the "expenses" issue had been brought to the attention of the parties, the respondent did not then re-endorse its previous position (relating to the previous acceptance, on behalf of the respondent, that the licence payment was within the "wages" definition).

 

The facts

 

49.          In this paragraph, we set out findings of fact which are relevant to the issues which we have decided. (In the interests of clarity, and with a view to minimising avoidable duplication, we also set out additional findings of fact elsewhere in this Decision):

 

(1)           On 30 April 2010, G4S wrote to all relevant employees, including this claimant. That letter enclosed the "Procedures governing the repayment of the SIA Licence fee should an employee leave G4S" ("the Clawback Form").

 

(2)           The letter referred to the refund by the employer, of SIA Licence fees which, by 30 April 2010, had already been paid by employees. However, the letter did not refer to the reimbursement by the employer of any SIA Licence fees which might be paid by employees in the future.

 

(3)           As is made clear in the Clawback Form, what the employer was offering to do in future was to pay the Licence fee, direct to the SIA, in respect of the renewal of CCTV licences, provided that the employee signed the Clawback Form.

 

(4)           The general scheme of the new arrangements (as contemplated in the letter of 30 April 2010 and in the Clawback Form), was that, when a CCTV licence had to be renewed, the employee would arrange for that renewal and would pay the renewal fee direct to SIA, and would demand and obtain total or partial repayment (from the employee) of the amount which had then been paid, only in the event of the employee subsequently leaving the employment with the employer at some time prior to the date of expiry of the renewal licence.

 

(5)           By the time of the commencement of these proceedings, Mercury had made it clear to the claimant that it was refusing to make a payment to SIA in respect of the renewal of his licence.

 

(6)           After the date of these proceedings, and at a time when expiry of the licence renewal time-limit was imminent, the claimant paid the SIA, in respect of the relevant licence renewal.

 

(7)           The real nature of the complaint which is at the heart of these proceedings is made clear in the letter dated 21 February 2016 which the claimant sent to Mercury. According to that letter:

 

"My complaint is that you as my employer have failed in respect of your obligation under TUPE regulations. The nature of this failure [relates] to your failure to ensure that my contractual right to have my SIA Licence fees paid by my employer. I have now suffered a financial detriment and wish this to be put right. Failure to do so will potentially amount to a breach of my contractual terms and conditions, and will mean I will need to rely on third party action to have this matter addressed.

 

Please indicate by return how you intend to reimburse me for the loss experienced!" [Our emphasis].

 

The key issues

 

50.          The key issues in this case were the following:

 

(1)           In a UDW claim, does a tribunal have power to construe the employment contract?

 

(2)           Was Mercury's refusal to reimburse the claimant a breach of the claimant's contract of employment?

 

(3)           Was there a "deduction" at all? And, if so, had that deduction taken place by the time of the commencement of these proceedings?

 

(4)   If there was a deduction, was it a "wages" deduction?

Power to construe?

 

51.          In Agarwal v Cardiff University [2017] IRLR 600, the Employment Appeal Tribunal held that a tribunal did not have jurisdiction to construe a claimant's contract of employment for the purpose of determining a UDW claim.

 

52.          However, in Weatherilt v Cathay Pacific Airways Ltd [2017] 609, a differently constituted EAT held that, in the context of a UDW claim, an employment tribunal

 

does indeed have jurisdiction to construe a contract of employment in deciding whether or not an implied term exists.

 

53.          We find the reasoning in Weatherilt to be more persuasive than the reasoning in Agarwal.

 

54.          Accordingly, we are satisfied that, in this case, we do indeed have power to construe the claimant's contract of employment, for the purpose of determining whether it was a term of the claimant's contract of employment that Mercury would reimburse this claimant in respect of his expenditure on the relevant licence fee.

 

A breach of contract?

 

55. There obviously cannot be a "deduction" unless a sum is due. Furthermore, in the circumstances of this case, no relevant sum will be due unless it is due under the contract of employment.

 

56. Accordingly, in order to succeed in this UDW complaint, the claimant has to prove that he had a relevant contractual entitlement to the reimbursement of any sum spent by him in respect of the renewal of a CCTV licence.

 

57. The claimant does not assert that any such contractual entitlement is to be inferred mainly on the basis of what was verbally agreed between himself and G4S, or mainly on the basis of custom and practice. Instead, in this case, he bases his contention in respect of contractual entitlement mainly on the wording of the letter from G4S Northern Ireland (which was sent to relevant employees on or about
30 April 2010) and on the wording of the Clawback Form. (See paragraph 49 above).

 

58. In our view, the only relevant contractual commitment was made in the letter of
30 April 2010. The words of that letter must however be construed in light of the contents of the Clawback Form.

 

59. Having interpreted the letter of 30 April in light of the contents of the Clawback Form, our conclusions are as follows:

 

(1) From April 2010 onwards, it was a term of this claimant's contract of employment that, if he signed the Clawback Form, G4S would pay SIA the fee in respect of any renewal of his CCTV licence.

 

(2) There was however no contractual commitment on the part of G4S to reimburse him in respect of any sum which might be paid by him to SIA in respect of CCTV licence renewal.

 

60. The implications of sub-paragraph (1) of paragraph 59 above are as follows:

 

(1)           In our view, at all material times, G4S was under a contractual commitment to pay the licence fee to the SIA in respect of the renewal of this claimant's CCTV licence.

 

(2)           However, if there has been a relevant breach of contract in respect of that contractual entitlement, (whether before the commencement of these proceedings, or after the commencement of these proceedings), that breach of contract can only be pursued in the ordinary courts, because an industrial tribunal has no jurisdiction to entertain any breach of contract claim made by an employee who is still employed by the relevant employer.

 

61. The implication of the conclusions which are set out at paragraph 60 above is that this claim must be dismissed, mainly for the following reasons:

(1) The contractual obligation contended for by the claimant (an obligation to reimburse him) did not exist.

 

(2)           Although, prior to the commencement of these proceedings, Mercury refused to make a relevant payment to the SIA, that was not a deduction from the claimant's wages within the meaning of Article 45(1) of ERO. (That paragraph only prohibits deductions from the wages of the relevant worker; it does not prohibit actual or deemed "deductions" from sums payable to the SIA, or to any third party).

 

Deduction?

 

62.          In the circumstances of this case, the claimant cannot succeed unless Mercury made a "deduction" from his "wages" in contravention of Article 45 of ERO. (See sub-paragraph (a) of paragraph (1) of Article 55).

 

63. For the purposes of Article 55 (1)(a), a "deduction" means a deduction within the meaning of Article 45.

 

64. The decision of the Court of Appeal in Delaney v Staples is authority for the proposition that a total failure to make any payment of a sum due could be a "deduction" for the purposes of the UDW provision. (See the decision of the House of Lords in Delaney v Staples [1992] ICR 483, at 490).

 

65. As Mr Moore has pointed out, the claimant only made the relevant payment to the SIA after these proceedings had already begun. Article 55 of ERO only provides an industrial tribunal with jurisdiction to entertain a complaint in respect of a deduction which, at the time of the commencement of proceedings, has already been made. (See sub-paragraph (a) of paragraph (1) of Article 55, which refers to a complaint that an employer "has made" a deduction). Accordingly, even if (contrary to our view), there was a contractual obligation upon Mercury to reimburse the claimant in respect of any payment which he made to SIA in respect of licence renewal, that obligation had not yet arisen by the time of the commencement of these proceedings. Therefore, no valid complaint could have been made in respect of a "deduction" which had not yet occurred.

 

Wages?

 

66. Article 45 only applies to deductions from "wages". For the purposes of the UDW legislation, "wages" means any sum to which both of the following conditions apply:

 

(1)   It falls within the scope of paragraph (1) of Article 59 of ERO.

 

(2)           It does not fall within the scope of the exclusionary categories which are listed at paragraph (2) of Article 59.

 

67. Among the excluded payments which are listed in paragraph (2) is a payment which is listed, at sub-paragraph (b), in the following terms:

 

"(b) any payment in respect of expenses incurred by the worker in carrying out his employment".

 

68. It seems to us that there is a powerful argument in favour of the proposition that a CCTV operator who makes a payment in respect of a licence fee, which he must have if he is going to carry out his work as a CCTV operator, is thereby incurring expenses in carrying out his employment.

 

69. In his Submission, at paragraph 10, Mr Mulqueen has expressed the view that, in Lucy v British Airways UK EAT/0033/08, meal allowances and allowances for overnight stays were regarded as falling outside the scope of "expenses", for the purposes of the UDW legislation, However, in that case, the scope of the term "expenses" (within the meaning of the GB equivalent of paragraph (2) of Article 59 of ERO) was not an issue which the EAT had to decide for the purpose of determining the overall outcome of the appeal in that case.

 

70. In relation to the potential resolution of the distinction between UDW "wages" and UDW "expenses", we found London Borough of Southwark v O'Brien [1996]
IRLR 420 to be more relevant. In our view, the implication of the conclusions which are set out at paragraphs 22-28 of the judgment in Southwark is that, for the purposes of the UDW legislation, "expenses" in essence refers to payment in respect of money which the relevant employee has spent, or will spend, in carrying out the relevant work.

 

71. In his Submission and in his Comments, Mr Mulqueen argues that Mr Moore, on behalf of the respondent, had initially conceded that the payment which was the subject of the alleged deduction in this case was a payment in respect of "wages" within the meaning of paragraph (1) of Article 59; that Mr Moore had not at that time contended that the relevant amount was a payment which fell within the scope of paragraph (2) of Article 59; and that he should not have been allowed to subsequently resile from those concessions.

 

72. We reject the latter proposition. In our view, as a general rule, a representative should always be allowed to resile from a concession if he does so speedily and if there is no ground for supposing that the opposing party had put itself into any worse position as a result of the making of that concession. We decline to operate on what we would regard as excessively formalist or technical grounds: See paragraph 59 of the judgment of the Northern Ireland Court of Appeal in Gill v NICEM [2001] NIJB 299.

73. Because of our conclusions in respect of the breach of contract issue, we have not found it necessary to arrive at definitive conclusions in respect of the "expenses" issue.

 

Overall conclusions

 

74. Our ultimate conclusions in this case can be summarised as follows. The claimant's UDW claim is not well-founded, because Mercury was not under any contractual obligation to reimburse the claimant for his expenditure on the licence fee. Accordingly, the UDW claim must be dismissed.

 

Next steps

 

75. In order to arrive at the conclusion which is set out in the last preceding paragraph, it was necessary for us, an industrial tribunal, to arrive at a determination as to the nature of any relevant contractual term. (In that connection, we determined that, in the Spring of 2016, Mercury was under a contractual obligation to the claimant to pay the SIA for the 2016 renewal of his CCTV licence).

 

76. We have arrived at a conclusion on the sub-issue which is identified at
paragraph 75 above. However, we had power to determine that sub-issue only because it was relevant to our ultimate conclusion on the question of whether this UDW claim was, or was not, well-founded. Our conclusion on that sub-issue (the contractual entitlement sub-issue) was merely incidental to the process of arriving at a conclusion on the question of whether or not the only claim in respect of which we have jurisdiction - this UDW claim - was, or was not, well-founded.

 

77. The parties will note that in relation to a continuing employment, such as this employment, an industrial tribunal has no freestanding power to determine whether the employer has been, or has not been, in breach of contract.

 

78. Nevertheless, in deciding what next steps should be taken in relation to the dispute which is at the heart of this litigation, the parties will no doubt bear in mind the conclusions which are set out at paragraph 59 above.

 

 

 

 

Employment Judge:

 

 

Date and place of hearing: 15 March 2017, Belfast.

 

 

Date decision recorded in register and issued to parties: