United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 623_95_0307

Appeal No. EAT/623/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 3 July 1996

Before

HIS HONOUR JUDGE J ALTMAN

MR L D COWAN

MR R JACKSON

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UTTLESFORD DISTRICT COUNCIL          APPELLANTS

MRS L J EVANS          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MISS L CHUDLEIGH

(Of Counsel)

Head of Legal Services

Council Offices

London Road

Saffron Walden

Essex

CB11 4ER

For the Respondent THE RESPONDENT IN PERSON


 


JUDGE ALTMAN: This is an appeal from the decision of the Industrial Tribunal sitting at Bury St Edmunds on 26 April 1995. That was a hearing under the provisions of the Wages Act and it related to whether, during the period that the employers were considering whether to hold a disciplinary hearing, and possibly dismiss the employee, they were bound to pay the employee her wages on the ground that this was a period of suspension with full pay under the disciplinary procedure, or whether the fact that at the time the employee was absent from work through sickness, entitled her to no pay because she had exhausted the sick pay allowances of her contract.

The factual background to this matter can be shortly stated. In January 1991 the Applicant before the Tribunal (I will refer to the status of Applicant and Respondent before the Tribunal in this hearing) was employed by the Respondents. Her duties were set out in a Job Description. The general conditions attaching to her employment were those in the national scheme. She remained at work under the provisions of that contract until she was absent through sickness on 27 January 1993. Apart from a short period in April and May 1993 when she returned to work, the Applicant was away from work until 15 September 1993, subject to receiving payment in accordance with the sickness allowance of her contract. That is expressed at page 17 of our bundle as follows:

"During 3rd year of service 4 months full pay and four months half pay."

The full pay came to an end in May 1993, and as I say, the full pay ceased in September 1993. I pause only to observe, because the definition of the term "full pay" has been a matter of argument before the Tribunal, that insofar as its use in the contract in relation to sickness allowance is concerned, full pay means the actual contractual payment that the Applicant was receiving when she was actually at work. On 24 November 1993 when the Applicant was still absent from work through sickness but was receiving no sickness allowance in accordance with her contract, a letter was written to her alleging misconduct during the period of her sickness absence. Put in a nutshell, the Respondents believed that the Applicant was engaged in various activities which undermined the assertion that she was genuinely sick. The letter said that a disciplinary panel was to take place. It described who was to sit upon it. It said the hearing would be held on 7 December, and that once the disciplinary panel had come to a conclusion, the Chief Executive would be advised and he would then decide on what action should be taken. It ends with these words:

"In view of the seriousness of the allegations and until the disciplinary panel has delivered its conclusions you are suspended from your duties. I also require you to return your lease car and any other council property you hold, in particular your official identity card, forthwith."...

The hearing took place in April 1994. By a letter of 27 April 1994 the Applicant was dismissed. She then appealed. Her appeal was compromised on terms which we have not found it necessary to investigate. The question therefore which arose for consideration under the Wages Act before the Industrial Tribunal, was whether for the period described as suspension in the letter of 24 November 1993, that is, from 24 November 1993 until 27 April 1994, the Applicant was entitled to any money or not.

The matter was addressed by the Industrial Tribunal in its decision. Having set out the background to the matter, at paragraph 11 the Tribunal said this:

"As can be seen, the issues in this case, give the tribunal not an easy question. I am satisfied that Mr Reuben's submissions are correct. [He was the representative of the Applicant.] The wording of the Procedure is that she be suspended on full pay or continue at work. The letter of suspension refers to suspension. It does change the conditions. It creates a different situation of suspension pending a disciplinary hearing.

12. I am not satisfied [the Chairman was sitting alone] that the implied term suggested by Miss Chudleigh [Counsel for the Respondents] is so obvious that it would be agreed to. I accept there is a change through suspension in the applicant's position. Furthermore there is a policy consideration against such a term in that disciplinary proceedings should be taken with expedition. If there is no liability to pay an employee in circumstances such as this, the proceedings can remain outstanding for some time.

13. Furthermore, there would be the practical problem if the employee recovers after a short period, then gets ill again, then recovers, of working out the practicality of such a term."

We were told, and we accept, that although not specifically stating the fact, the Tribunal was particularly directing its attention to the disciplinary procedure of the Respondents under paragraph 30 which provides:

"Subject to the provisions of this paragraph the chief executive is authorised by the council to:

(c) Suspend an employee with full pay pending an investigation or hearing, or where it is felt necessary to avoid difficult situations."

That paragraph sets out the powers of the Chief Executive, and as well as that, it contains the customary forms of discipline of warnings, dismissal, resignation or transfer. It is a bit anomalous within the powers of the Chief Executive because whereas the other powers relate to penalties (using that word in its broadest sense) following a disciplinary investigation, this is to do with what happens pending an investigation. Paragraph 29 of the clause deals with the powers of a Chief Officer which are more limited but also include the power to suspend, with full pay, pending an investigation or hearing.

We have looked at the other clauses of the disciplinary procedure. It is clear that this is a generally and nationally agreed disciplinary procedure which purports to be a comprehensive contractual code dealing with the steps to be taken where disciplinary action is contemplated by an employer. Accordingly, any disciplinary actions in preparation, investigating and dealing with a disciplinary matter, must come within the ambit of this agreement, if the employer is to act lawfully in accordance with the contract of employment, which incorporates these terms. Indeed, it says in the terms in paragraph 8, that the document sets out, amongst other things, the steps to be followed and the types of disciplinary action.

In paragraph 24 in the part of the disciplinary code which deals with the procedure to be taken in dealing with a disciplinary complaint, under the heading of Gross Misconduct, the agreement provides:

"In the event of an employee's misconduct being considered sufficiently serious by a chief officer the employee will normally be suspended (see paragraph 34) with pay, pending investigations and be required to provide an explanation."...

Paragraph 34 which further defines that sub-section provides:

"Where an offence is so serious as to warrant summary dismissal or where the misconduct follows a final warning and could result in dismissal, the procedure will be to suspend the employee on full pay until a formal investigation takes place."...

Finally, it has been drawn to our attention by Mrs Evans, the Applicant, that the only other place which refers to suspension in the agreement is in paragraph 26, in relation to matters with which we are not concerned at all, they are to do with Trade Union representatives, that where there is an investigation there again there is reference to the power to suspend on full pay pending discussions. Accordingly, it has been drawn to our attention by Mrs Evans that, wherever this procedure provides for suspension, it is in the context of there being suspension on full pay.

The arguments that have been put before us in support of the appeal by Miss Chudleigh have been helpfully set out in a succinct Skeleton Argument. First of all it is said that paragraph 30 being the relevant procedure, does not of itself entitle the Applicant to pay during a period of suspension, it simply authorises the Chief Executive to suspend with pay if he or she saw fit. That is quite clearly a correct interpretation of the strict words used in paragraph 30. What does the implication of that mean? Bearing in mind that the disciplinary procedure is comprehensive, and bearing in mind that that power is given to the Chief Executive, if there is to be any power to suspend without pay, one must look to the agreement to see where the Chief Executive, or anyone else, is given that power. In the absence, it seems to us, of any power to suspend without pay being provided for in the agreement, any suspension that takes place, must be construed as being one of the suspensions provided for in the agreement, whether it be by the Chief Executive or the Chief Officer, or anyone else. Whereas we accept that on an interpretation the wording of clause 30 does not give of itself a legal entitlement to the Applicant for suspension with full pay, it does provide the only suspension provisions, together with clause 29 and other references, for instance in clause 24, to circumstances where there can be any suspension.

Accordingly, it does not seem to us that the argument can follow that simply because the wording of clause 30 itself does not specify that it gives a legal entitlement to the employee, the import of the whole contract is not to do so.

Miss Chudleigh goes on to argue that the construction of the words "full pay" in paragraph 30, should have been construed to mean the full remuneration which the employee was entitled to receive at the time of the suspension under the terms of her contract of employment, and not the contractual salary to which she would have been entitled at the time of suspension had she been fit to work. We cannot see any support for that argument. The word used is "full pay". It is suggested that "full pay" means "no pay" simply because at the time the Applicant was not receiving any pay because she was off sick. If anyone had asked her what sort of pay she was receiving, she, and we suspect everyone else concerned, would have said "well she is not entitled to full pay, in fact she is not entitled to any pay." Indeed we are asked to draw a comparison between that and the sick allowance provisions, which show that at the relevant time the Applicant was not entitled, under the sickness allowance provision, to any pay. The interesting thing about the sickness allowance provisions is that they use the term "full pay". There the term "full pay" applies only to the first four months of sickness absence and it is actually the contractual pay provided for in the salary provisions of the contract. Clearly and specifically, it is an artificial argument, which is contrary to all the provisions of the contract it seems to us, to say that "full pay" means pay to which the person was entitled at the relevant time. Suppose someone had been laid off for a few hours each week, would "full pay" mean the lay-off pay? The word "full pay" is a very clear and explicit reference to a sum of money which is not deducted in any way. If a bottle is full, there is no air in the top of it, and if pay is "full" it means the maximum contractual entitlement on the ordinary normal hours of work.

This leads on to the third submission on behalf of the Respondent, that the Industrial Tribunal erred in failing to imply a term into Mrs Evans contract of employment, to the effect that at a time when she was not entitled to any pay under the terms of her contract of employment, then she could be suspended without pay. It is suggested that there were three reasons why that should have happened. First of all it is suggested that:

"11.(a) A contract should be construed so as not to give rise to an absurd and unfair result;"

and reference was made to the case of Schuller v Wickman Machine Tool Sales Ltd [1974] AC 235, a decision of the House of Lords, which is a case where there was an ambiguity as to the meaning of the word "condition". It was stated that the fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties cannot have intended it, and if they do intend it, the more necessary it is that they shall make that intention abundantly clear. That arises where it can be established there is an ambiguity in the term used. It does not seem to us that the term "full pay" is ambiguous. Furthermore, is it such an absurd and unfair result? For two reasons the Industrial Tribunal have set out good sound practical reasons why, even where someone is entitled to no pay under a sickness allowance, once the disciplinary procedure is brought into force, there should be full pay; first in order to provide an inducement to the employer to get on with the disciplinary procedure, (although we observe it was an inducement which the employers in this particular case quite dramatically failed to rise to) and secondly the complication of working out in practice what would happen where there may be a mixing of disciplinary procedure and sickness absence procedures and questions as to whether a person can return to work. One can imagine the quagmire.

We would add a third one which is this - we at this time, and we suspect the Respondents also, are looking back with hindsight. An employer who has dismissed someone, with hindsight, may well feel that it is irksome to have to pay someone for a period of suspension, when otherwise they would not have had to pay, because of the sickness allowance provisions. But here, the employer is not working from hindsight, the employer is seeking to set up the circumstances in which to conduct in a clear-cut and unchallengeable way, a proper disciplinary procedure which can be rigidly adhered to, without interruption or intervention or damage, for instance by an employee suddenly claiming that she is entitled to come back to work, when they want to keep the parties apart. From that point of view, it is no doubt a useful device for a period of days, which was probably envisaged by the disciplinary procedure, rather than the months that these Respondents took to get on with the hearing.

The next ground upon which it is suggested a term should be implied is that:

"11.(b) A contract should be construed as a whole and in construing the term relating to suspension the IT failed to have regard to the terms setting out Ms Evans' sick pay entitlement;"

We disagree. We find that the two were perfectly consistent. I have already referred to the question of full pay and its definition in the two clauses. If we were to take any heed of that argument in the context of this case, we would be being asked to say that the sickness allowance provisions which mean that a person does not get paid a sickness allowance, should be broadened to mean that the employee does not get paid under any other provision. That is clearly not what the contract says.

We then go on to the third argument for implication, which is that:

"11.(c) Where two terms in a contract are inconsistent then if they cannot be harmonised, the earlier prevails over the latter: the term relating to sick pay preceded the term relating to suspension in the contract of employment."

There is nothing inconsistent in those two terms. If an employer has an employee that is off sick for four months, he pays full pay; if he/she continues a further four months it is half-pay; if she continues thereafter, the sickness allowance is reduced to nil. If a disciplinary procedure arises, then under that procedure the employee receives full pay. That summarises the provisions of both the sickness allowance provisions and any provision which provides for suspension with full pay. There is nothing inconsistent or ambiguous in that and no need to harmonise discordant provisions which are not discordant.

What happened in this case is that on 24 November 1993 it is clear that the Respondents wrote a letter to someone who was not receiving any sickness allowance, including the terms "you are suspended from your duties". It may be that that letter was not the fulfilment of the disciplinary procedures arrangements for suspension with full pay. It may be that it was not a letter written in accordance with the provisions of clause 30. If it was not written in accordance with the provisions of the disciplinary procedure, it was written in breach of contract, because there is no power to suspend without pay, particularly if it is done by the Personnel Manager. In those circumstances, the suspension it seems to us, that took place in this case, must be regarded as having taken place in accordance with the disciplinary procedure, because it was as part of the disciplinary procedure that the Applicant was dismissed. Accordingly, we can see no escape from the conclusion that any suspension in accordance with the disciplinary procedure as drawn, is with full pay and therefore we find that the Industrial Tribunal were perfectly correct in their conclusion, that the Applicant was entitled to recover full pay for the period of her absence.

If the Respondents feel that that is irksome, they could perhaps reflect that they could have dealt with the matter without suspension, or they could have dealt with the matter more quickly. But if they were to honour their contracts, or, to use the words of Mrs Evans who said she was "brought up to believe that a contract means what it says", then they are bound by it.

There is a final canon of contractual interpretation, which used to have the Latin tag of "contra proferentem" attached to it: the party that provides the wording of a contract, in the event of an ambiguity, should have it construed against them. This is a long, detailed, legalistic and carefully drawn contract. We can see no reason why the Respondent should not be held to it. This appeal is dismissed.

What is the position about money? Out of abundance of caution, the parties helpfully took the steps to agree the amount outstanding in mathematical terms, subject to the question of liability. Accordingly we make no further order about that. That stands as a debt.