United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P SMITH (Representative) Tower Hamlets Law Centre 341 Commercial Road London E1 2PS
For the Respondents	NO APPEARANCE BY OR REPRESENTATION ON BEHALF OF THE RESPONDENTS


 


JUDGE J HULL QC: This is an appeal to us with leave of our own Tribunal by Mr Derek Bergman. He is a gentleman of 36, who is employed as a porter and kitchen assistant by a housing association with premises in London, The Look Ahead Housing Association Ltd. We learn from the decision of the Industrial Tribunal that that is a housing association which specialises in providing accommodation and food for people who, by way of payment, provide their Housing Benefits to the association. Needless to say, it is not very well paid employment.

Mr Bergman was interviewed at Dock Street, where apparently he was employed in April 1995 and on 19 May 1995 he entered into a contract of employment, which is with our papers, and at page 23 of our papers there is a provision:

"Any variation in the terms of this contract will be brought about following a reasonable period of notice. Variations in contractual terms will be introduced following consultations with staff and their representative and notified in writing to all employees"

And he signed that. So on the face of it, it is not a case of the written terms of employment being "wrong"; but what he was told, both by the advertisement for the job he says, and at the job interview, was that there would be meals, a meal in the morning and a meal in the evening, at least, which of course in this employment was important to him and he took his employment on the faith of those assurances. In fact, unknown to him when he joined, the housing association was as a matter of policy anxious to withdraw meals. The meals varied from hostel to hostel and the Association were apparently, as a matter of principle, not satisfied that they ought to be providing remuneration in kind, or payments in kind of this sort, out of Housing Benefit which was paid by their various clients and residents.

There was a memorandum about withdrawal on 16 June which is with our papers at page 16 and which was apparently displayed, it was on the heading of the housing association. It set out that the proposal of withdrawal of meals had been agreed at a meeting of 31 May 1995, very shortly after Mr Bergman had joined and then there were management proposals, because this had not been agreed, for compensation for those who were deprived of this perquisite and those proposals were set out in the memorandum. So what happened about that? There was a meeting of the joint negotiating committee and that is at page 14, on 20 September 1995. The representatives of the Trade Union, UNISON, were there. Then there are initials which convey to us that a Mr George Munson representing the Dock Street staff was there. There were other representatives from other hostels and there were the representatives of management and the minutes set out an agreement:

"STAFF MEALS WITHDRAWAL

Staff Side confirmed that they would accept the proposed compensation." [but that only related to the employees who were in post before 31 March 1994].

So of course Mr Bergman did not, under this agreement, receive any compensation in respect of the withdrawal of the meals. He complained to the Industrial Tribunal under the Wages Act 1986 when his meals were withdrawn that, as he took it, a deduction had been made from his wages and his application is based on this; that although there had been a notice put up about this matter he had not been given personal notice in writing and it is quite clear that the Act requires either a variation in writing of the contract of employment, or notice in writing, for any deduction to be lawful; that is what Parliament has said.

The Industrial Tribunal set out the facts to which I have referred. It seems fairly clear to us that the Tribunal accepted that Mr Bergman, in perfectly good faith, had been assured that he would get his meals and so understood and that was the basis on which, although there was no reference in the contract to it, he had started his employment.

They then say:

"That document [his contract of employment] did however provide that variations in contractual terms would be introduced following consultation with staff and their representatives and notified in writing to all employees."

Then they set out why the employers had taken the attitude and the steps which they had.

"The procedures provided for regular staff meetings between the Respondent, the Union and the staff representatives who represented non-unionised employees of whom the Applicant, at that time, was one."

He has, in fact, joined the Union since. Then the Tribunal went on:

"At a meeting of the Company the Union and the staff representatives in September 1995 it was agreed that any entitlement to meals be discontinued and that compensation of £229 as a one-off payment be paid to all employees who had been in post for 12 months prior to April 1995. The Applicant was therefore deprived of the meals and received no compensation."

He complained about the loss and joined the Union. The Tribunal conclude:

"We now come to our conclusions in the matter. When the Applicant joined the Respondent he did not immediately become a member of the Union. A decision as to whether or not to join the Union was left to the individual. The Union agreement was not incorporated in the written particulars of the main terms. Those terms did however provide for variations provided that they were taken through the consultation process. That is exactly what happened and we do not accept that the Applicant only became aware of the disentitlement to meals after the final decision had been taken. We accept that the matter had been passing through the consultation process since the year before he joined the Respondent and that he had or should have had full notice of what was happening. His claim is consequently dismissed."

The appeal to us is on the very narrow point that this was an unlawful deduction under the Wages Act for the reasons which I have already indicated, which have been put to us by Mr Smith, who represents Mr Bergman today. In other words, that notwithstanding that the contractual provision for consultation had been satisfied, if this was a deduction it had to be made lawfully and that involved a variation in writing of the contract, or else notification personally to Mr Bergman, not simply a notice on the notice board. That proposition of law is undoubtedly correct, it seems to us, but what Mr Smith's submission overlooks is that in the Wages Act there is provision in Section 7(4) as to the meaning of "wages".

In Section 7 of the Wages Act 1986 it is provided in subsection (1):

"(1) In this Part 'wages', in relation to a worker, means any sums payable to the worker by his employer in connection with his employment, including -

(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise."

There are indications that that means money rather than perquisites in kind, but the matter is put beyond doubt, not left open to argument, because Parliament says in subsection (4):

"(4) For the purposes of this Part any monetary value attaching to any payment or benefit in kind furnished to a worker by his employer shall not be treated as wages of the worker except in the case of any voucher, stamp or similar document which is -

(a) of a fixed value expressed in monetary terms, and

(b) capable of being exchanged for money, goods or services."

That is exactly what these meals were not. They were not represented, for example, by a meal voucher which could be exchanged for cash and therefore they are not to be treated as wages. The Act says so. The meals are not to be treated as wages, nor is their value to be treated as wages.

It seems to us therefore that the technical objection to what has happened under the Wages Act must fail on contractual grounds. For the reasons given, findings of fact by the Industrial Tribunal, it must fail.

It also appears to us that the Industrial Tribunal were not guilty of any error of law in omitting to consider the point under the Wages Act and the provisions of Section 7 (as it was) and their decision being one of fact is one which cannot possibly be appealed to us. For that and other reasons which were indicated in argument, but we need not go into them any further, we think that this appeal cannot succeed and we must therefore dismiss it.