United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR J BOWERS (of Counsel) EEF Broadway House Tothill Street London SW1H 9NQ
For the Respondent	MR T KIBLING (of Counsel) Legal Advisor UNISON 1 Mabledon Place London WC1H 9AJ


 


JUDGE PETER CLARK: The Applicant, Mr Bradley, commenced employment with Nottingham County Council (The County Council) on 2 October 1989 as a grounds maintenance worker.

On 1 January 1992 he signed a written contract of employment with the County Council. The material express term of that contract reads:

"3. Main terms of employment.

During your employment with this authority your duties, rates of pay, and conditions of service will be subject to collective agreements negotiated with the trade unions, which are recognised by the authority for collective bargaining purposes. Agreements reached nationally are incorporated after approval by the County Council into your contract of employment and are normally set out in the scheme of conditions of service at the National Joint Council for Local Authorities Services (Manual) Workers."

Following compulsory competitive tendering that part of the County Council's undertaking in which the Applicant was employed, was transferred to the Respondent, Glendale Industries Ltd. Consequently, from 1 August 1995 the Respondent became the Appellant's employer under the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE).

The relevant National Joint Council (NJC) consisting of representatives from local authorities and trade unions recognised by the authorities for the purpose of collective bargaining on behalf of their members, met and agreed a 2.9 per cent pay increase for the relevant workforce on 14 June 1996, backdated to 1 April 1996.

The Respondent refused to implement that increase in favour of the Applicant and, with the assistance of his Trade Union UNISON, he presented a complaint of unlawful deduction from his wages to the Industrial Tribunal on 5 August 1996.

The matter came before a Chairman sitting alone at the Sheffield Industrial Tribunal on 18 February 1997. The Applicant was represented by the UNISON Regional Organiser, Mr Moore and the Respondent by Mr Linskell, a Legal Officer with the Engineering Employers Federation.

Neither party chose to call oral evidence. Both relied on a bundle of documents placed before the Chairman. In addition, certain facts were agreed. We have earlier referred to those agreed facts.

The Parties Submissions Below

Mr Moore simply relied upon the decision of the Employment Appeal Tribunal in BET Catering Services Ltd and Ball (EAT/637/96 Unreported), which he contended was on all fours with the instant case.

Based on the judgment of Lindsay J in that case he argued that the Applicant was entitled to assume, in the absence of anything said to the contrary in advance of the NJC pay deal, that his contract of employment entitled him to the benefit of that pay increase. The NJC Agreements were incorporated into his contract.

Mr Linskell presented a written submission running to 21 paragraphs. He took a number of points. Included among them, we see from paragraph 7 of the Chairman's extended reasons dated 27 February 1997 was reliance on the words of the contract:

"Agreements reached nationally are incorporated after approval by the County Council into your contract of employment. ..."

The submissions in full appear at paragraphs 8(1) and 21 of the written submission.

In this case, no such approval was given by the Respondent, which it was argued stood in the shoes of the County Council, as the Applicant's employer, following the transfer.

The Chairman preferred the case advanced on behalf of the Applicant. He expressed his reasoning in paragraph 12 of his reasons thus:

"I have naturally read the decision of the EAT (and of the Industrial Tribunal) in the Ball case and have without much difficulty come down in favour of the applicant. To my mind, having regard to the terms of Regulations 5 and 6 of the TUPE Regulations I am satisfied that the applicant's contract of employment incorporated the NJC agreements and that those agreements continued to apply to him, certainly until such time as he was given notice that they would no longer do so or until such time as a different agreement as to his terms and conditions was reached. Mr Linskell suggested that the EAT in the Ball case had not heard all the arguments. I would be very surprised indeed if Professor Napier who appeared for the respondent in that case had neglected to put forward any argument that had any hint of merit. Mr Linskell also invited me to add words to the applicant's terms of employment as set out in Clause 3 of his contract or at the very least imply additional words so that the contract better related to the reality of Mr Bradley being currently employed by a private concern. It seems to me that the issue is simpler than that. The respondent took on the applicant "warts and all". It took over from his previous employer which had always without fail in recent years implemented pay deals agreed by the NJC. Mr Bradley was never given a different contract of employment after the transfer. Neither did he receive any fresh statement altering any particulars as to his terms and conditions of employment. The respondent acknowledges that the 1989 contract is still in existence and I frankly cannot see that there is any, or much, merit in the respondent's contentions. I am of the opinion that the respondent was bound to implement the 2.9% pay increase agreed on 14 June 1996 which should have been backdated to 1 April 1996. It was never paid to Mr Bradley and that represents, in my view, an unlawful deduction from his wages under the provisions of Section 13 of the Employment Rights Act 1996."

Accordingly, he made the declaration sought and adjourned the question of financial remedy for agreement or further determination by the Tribunal.

Against that decision the Respondent now appeals.

The Appeal

In support of the appeal Mr Bowers took two points, the first of which is a pure question of construction of a contract of employment. He submits, with the simplicity which characterised Mr Moore's submission on behalf of the Applicant below, that upon a proper construction the relevant contractual provision did not operate so as to automatically incorporate into the contract of employment the fruits of collective bargaining effected through the NJC bargaining machinery, here a 2.9 per cent increase. Such incorporation was expressly subject to the approval of the employer, now the Respondent, and such approval was not forthcoming. Accordingly, the Applicant had no contractual entitlement to the 1996 pay increase. There was no unlawful deduction. The complaint ought to have been dismissed.

We should next refer to the decision of the Employment Appeal Tribunal in BET Catering Services. That case concerned a number of cooks or dinner ladies employed originally by the London Borough of Richmond (Richmond). Each employee had a written contract of employment which had, against the side note "Conditions of Service", an expression such as "NJC for LAs - Manual Workers". That cryptic legend was a reference to the terms and conditions from time to time published and from time to time varied by the National Joint Council for Local Authorities Services for Manual Workers, the same NJC as in the present case.

The Industrial Tribunal recorded the following as an agreed fact at paragraph 1(3) of its reasons in the BET case:

"(3) The Applicant's terms and conditions of employment with the London Borough of Richmond incorporated the National Joint Council for Local Authorities Services (Manual Workers) Terms and Conditions ... under a joint employer-union bargaining agreement affecting Local Authority manual workers nationally."

It follows that the case proceeded on the agreed basis that the employees' terms and conditions of employment with Richmond incorporated the NJC Terms and Conditions. The collectively agreed variations to the standard Terms and Conditions were automatically incorporated into the individual contracts of employment.

In due course, on 1 January 1994, Richmond contracted out its catering services to BET. That was a relevant transfer within the meaning of TUPE.

On 1 September 1994 the NJC promulgated terms of an increase in pay. The question which arose was whether that increase was properly payable to the employees, so that BET's failure to pay the increase constituted an unlawful deduction from wages. The Industrial Tribunal held that it was and it did.

On appeal it was argued on behalf of BET that the expression "NJC for LAs (Manual Workers)" had to be construed in the factual matrix in which the contract was set: Adams v British Airways Plc [1996] IRLR 574, per Sir Thomas Bingham, MR, paragraph 21. Counsel for BET submitted that whatever the effect of those words may have been before the transfer, it was not necessarily the same afterwards. That submission was rejected, unsurprisingly, by the EAT (Transcript 14 G). In those circumstances the appeal was dismissed.

For the Applicant in this appeal, Mr Kibling, who also appeared for the employees in BET, accepts that BET is not on all fours with the instant case, as was submitted by Mr Moore below. The factual distinction lies in the addition of the words "after approval by the County Council" in Clause 3 of Mr Bradley's contract of employment.

Mr Kibling sought to advance a new construction of Clause 3, not put forward on behalf of the Applicant below. It is this: Whereas, following the transfer, the Respondent, Glendale must be substituted for the 'Authority' referred to in the first line of Clause 3; no such substitution for "the County Council" should be made in line 3.

On that construction, payment of the NJC pay increase was due from the Respondent after approval by Nottinghamshire County Council.

That submission has a number of difficulties. First, the point was not taken below; secondly, if it is to have a significant effect on the outcome of the complaint it would be necessary for the Industrial Tribunal to make a finding of fact that Nottinghamshire County Council did approve the 1996 NJC pay agreement. It is clear to us that no such finding was made by the Chairman on a fair reading of his reasons and, in particular at paragraph 12, nor would one expect such a finding where the construction point was not taken and no evidence was led. It is not a matter which emerges from the bundle of documents before the Chairman and is not contained within the agreed facts. In these circumstances he accepts that under the principle in Kumchyk v Derby City Council [1978] ICR 1116 and following cases, we cannot properly entertain this new point on appeal.

We think that must be right, but even were we to entertain it we should reject it. It is plain as a matter of construction of the contract as a whole that the expressions "Authority" and "County Council" are used interchangeably to refer to the employer; that employer was originally Nottinghamshire County Council and following the transfer, it became the Respondent, Glendale.

Having considered his position during the course of argument, Mr Kibling indicated that he no longer wished to resist paragraph 6(1) of the Notice of Appeal; that is, the construction of Clause 3 of the contract of employment advanced by Mr Bowers. We will not allow an appeal by consent against a reasoned decision of an Industrial Tribunal without first satisfying ourselves that the decision discloses an error of law: J Sainsbury Plc v Moger [1994] ICR 800.

We are so satisfied. This case is distinguishable on its facts from that of BET. Past practice by the County Council of approving NJC pay increases cannot displace the express term of the contract. Clause 3 means what it says; an NJC pay increase will be incorporated after approval by the employer, formerly the County Council, now the Respondent. The Respondent did not approve the award, hence the increase was not incorporated into the Applicant's contract of employment.

Finally, Mr Kibling asked us to remit the case for a re-hearing so that the new construction point may be taken, and further evidence called. We shall not do so. The Applicant should not be permitted "a second bite of the cherry" in order to lead evidence and take a point which could have been done the first time around. In any event, it is in our judgment a bad point.

Accordingly we shall allow the appeal and substitute an order that the complaint of unlawful deduction from wages be dismissed.

An application for costs on behalf of the Respondent is refused.