United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr S Gorton (of Counsel) Messrs Thompsons Solicitors Richmond House 1 Rumford Place Liverpool L3 9SW
For the Respondent	Mr T Kenward (of Counsel) The Solicitors Liverpool City Council PO Box 88 Municipal Buildings Dale Street Liverpool L69 2DH


 


JUDGE PETER CLARK: On 24 March 1986, the Appellant Mr Williams commenced employment with the Respondent Council as a craftsman gardener. On the same day he received a written statement of particulars of this terms and conditions of employment. Those particulars referred to the fact that his terms and conditions were covered by existing collective agreements negotiated and agreed between certain recognised unions and the Council, and that from time to time variations to those terms and conditions would result from further negotiated Collective Agreements. Although not a written contract of employment per se it is common ground that the relevant Collective Agreements, to which we shall refer, were incorporated into the Appellant's contract of employment.

In February 1990 the Appellant was on grade 5 and paid accordingly. In March 1992 the Council and the relevant recognised union, the GMB entered into a collective agreement relating to the Council's Ground Maintenance staff, including the Appellant.

Clause 5 of that agreement provided:

"5. CONSOLIDATION OF GRADES

In order to overcome the demarcation problems between the four grades of Gardener, the grades will be consolidated on Grade 3. This grade will include all the Ground Maintenance operations detailed in the attached job description."

and then later:

"All the present Grade 5 Gardeners will have their grade protected until they leave or retire."

The grades were 1, 2, 3 and 5. Following that agreement the Appellant continued to be paid at the old grade 5 rate. In the job description which formed part of the collective agreement his job title was Gardener Grade 3.

In March 1993 the recognised unions, including the GMB, and the Council entered into a pay protection agreement. Clause 6 of that agreement provided for full pay protection for four years for an employee displaced from his job who accepted alternative employment within the Council in a less well paid job, and Clause 6.4 expressly provided that where any previous pay protection arrangements have provided more beneficial terms, these would continue to operate for the relevant period on an individual basis.

On 10 March 1996, the Council resolved to terminate pay protection which had hitherto applied to its employees.

On 29 March 1996, without agreement with the GMB union, the Council wrote to the Appellant and others giving notice of termination of his existing contract of employment with effect from 30 June 1996. In the same letter the Council offered a new contract on the same terms as before, subject to the following changes:

"(a) the pay protection that you are currently receiving, i.e. the payment which equates to the difference between the contractual earnings in your present post and the basic contractual pay (plus any bonus) in your former post, will reduce to a sum equal to 50% of the total protected payment. This remain payment will continue to be received by you until 30 June 1997, when it will be removed entirely. At this time, the salary or earnings level will be the same as the prevailing "rate for the job"

(b) The Protection of Earnings clause in your present contract of employment which is referred to in paragraph 6 of the Protection of Employment Agreement will no longer apply."

By an Originating Application presented to the Liverpool Industrial Tribunal on 25 September 1996 the Appellant complained of unfair dismissal and unlawful deductions from his wages. The particulars of his complaint read as follows:

"I have received pay protection as a term of my contract of employment. My employment was terminated and I contend that this was an unfair dismissal. I commenced employment on a new contract under protest, and I am suffering loss because pay protection is no longer paid at the full rate. It will be withdrawn completely in 1997.

Alternatively, the pay protection arrangements remained as a term of my contract after the purported variation in July 1996. The sum has not been paid at the correct level. This represents an unlawful deduction from my pay for the purposes of the Wages Act."

On 2nd to 4th September the Liverpool Industrial Tribunal held a hearing on a preliminary issue, identified by the Tribunal in paragraph 2 of their extended reasons as:

"whether the letter dated 29 March 1996, which terminated the contracts of employment of all applicants, had the effect of terminating their right to pay protection."

By its decision with extended reasons dated 18 September 1997 the Tribunal held that the March 1996 letter had the effect of terminating the Appellant's right to pay protection. Against that decision the Appellant now appeals.

In prosecuting this appeal Mr Gorton directs his challenge principally to the Tribunal's construction of the 1990 Agreement, and in particular Clause 5 thereof. The Tribunal deal with that matter at paragraph 9.2 of their reasons, where, having referred to the wording of Clause 5 of the 1990 Agreement they say this:

"In the light of the words of paragraph five quoted above the use of the word grade in the sentence next quoted

"All the present Grade 5 Gardeners will have their grade protected until they leave or retire."

must be related to pay not grade. To construe paragraph five otherwise would be to defeat the whole purpose of the agreement which was to create one gardener grade, namely grade three, for which there was a single job description entitled Gardener Grade three, which is an amalgam of the previous job descriptions of grades 1, 2, 3, and 5.

In these circumstances we have concluded that the applicant was regraded to grade three, and received pay protection, from March 1990. The 1990 agreement was signed by Mr Lowes on behalf of Mr Williams, he is therefore deemed to have notice of his change of grade."

Mr Gorton takes three points. First, that under the 1990 Agreement the Appellant remained on Grade 5. Accordingly he did not enjoy pay protection for the purposes of the change in the terms and conditions of employment effected by the March 1996 letter. Secondly, he submits in the alternative that the March 1996 letter only terminated pay protection emanating from a change of post. Here, the Appellant never changed post in 1990. He remained a gardener, doing the same work as before. Thirdly he relies on the provision in clause 5 of the 1990 Agreement that all the present Grade 5 Gardeners will have their grade protected until they leave or retire. That provision, he submits, survived the changes effected by the new contract offered, and by performance accepted by the Appellant in the March 1996 letter.

In support of those arguments he submitted that the use of the word, "grade" in the 1990 Agreement is not to be equated with pay. The 1990 Agreement makes no reference to pay protection. His main point is that the changes and the March 1996 letter are directed solely to the pay protection expressly provided for in the 1993 Agreement, and that is designed to cover staff who are re-deployed and then take up a different, less well paid post. Their old pay rates are protected by the 1993 Agreement.

We accept that the proper construction of the contract of employment, and in particular the collectively agreed terms expressly incorporated therein, is essentially a question of law. In carrying out the construction exercise we bear in mind that we are construing the terms of a collective agreement, reached between employer and trade union, not a legally drafted document. In that respect I have the benefit of two highly experienced industrial colleagues who have applied that industrial experience in construing the intentions of the parties from the words of the collective agreements and the new contract terms.

In our judgment the Tribunal's construction was correct and will be upheld. It is abundantly clear to us that in 1990 the Appellant's post was changed from that of Grade 5 Gardener to a Grade 3 Gardener. The argument that he remained a Grade 5 Gardener is untenable in light of the wording of Clause 5 and the job description annexed to the 1990 Agreement which then became part of the Appellant's terms and condition of employment by incorporation, regardless of whether he had specific notice of it. In return for the flexibility which the new consolidated grade gave to the employer, the old Grade 5 post-holders' pay rates were protected. We construe the passage in Clause 5 which reads:

"All the present Grade 5 Gardens will have their grade protected."

as meaning simply that their rate of pay and any other relevant benefits would be protected.

We are reinforced in that construction by the way in which team leaders are dealt with in the 1990 Agreement; they remained Grade 5 plus 10%. That was the only post to remain Grade 5. The Appellant was not a team leader.

Moving to the letter of 29 March 1996, that had the effect of terminating the old contract and offering a new contract on different terms. It was not a unilateral variation of the old contract. The question is, what is the effect of those new terms? We cannot accept Mr Gorton's submission that both paragraphs (a) and (b) of the letter related solely to the 1993 Re-deployment Agreement or its predecessors limited to the effects of re-deployment. It is clear to us that paragraph (a) of the letter is directed to those then receiving pay protection and on our construction of the 1990 Agreement that included the Appellant. Paragraph (b) simply deletes the right to protection of earnings under Clause 6 of the 1993 Agreement for future re-deployees who would otherwise in future be entitled to rely on its protection.

It follows that we shall dismiss this appeal.