United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M JONES (solicitor) Messrs Underwoods 83/85 Marlowes Hemel Hempstead Hertfordshire HP1 1LF
For the Respondent	MISS J EADY (of Counsel) Messrs Charles Russell 8 - 10 New Fetter Lane London EC4A 1RS


 


MR COMMISSIONER HOWELL QC

1. In this appeal Ms Julie Ann Fox seeks to have set aside as erroneous in point of law the decision of the North London Employment Tribunal set out in extended reasons issued to the parties on 6 September 1999, after hearings and further consideration on four days earlier in that year on 27 and 28 April and 16 and 17 August.
2. The original proceedings before the Employment Tribunal had been brought by Originating Application dated 6 April 1998 in which Ms Fox had complained of three matters connected with what she alleged was her employment with the Respondents, "Quit" who are an anti smoking charity providing advice and in particular telephone help lines for people and organisations who are concerned with giving up smoking.
3. The complaints in the Originating Application, before us in the appeal bundle pages 13 –14, were that she had been given no terms and conditions of her employment; there had been unlawful deductions made from her remuneration and that there had been a breach of natural justice and a lack of consultation on the part of the employers.
4. Allied to that Originating Application had been a separate Originating Application, which is not before us, in which Ms Fox had complained of being unfairly dismissed by the Respondent.
5. The Tribunal's decision dealt with all of the issues under both Originating Applications and held that although she had been an employee of the Respondents and she had not been given a written statement of the particulars of her employment as required by Section 1 of the Employment Rights Act 1996, she had not been unfairly dismissed in the circumstances which led to her leaving the Respondent's organisation.
6. Those findings are not in any way challenged before us today. What is challenged is only one part of the Tribunal's decision referred to in the Appellant's notice of appeal relating to their finding No. (iii) that there had been no unlawful deduction from her wages. To explain how that issue arose before the Tribunal, and how the Tribunal's consideration of the issue comes up before us on appeal, it is necessary to explain a little of the background from the Tribunal's findings as recorded in their extended reasons at pages 4 – 12 of the appeal bundle.
7. Ms Fox had commenced what the Tribunal found to have been "employment" as a volunteer worker with the Respondents on 18 January 1994. She had initially been engaged as a Counsellor, but subsequently became a shift leader which involved her co-ordinating the work of other counsellors as well as doing telephone counselling herself.
8. The initial arrangements between Quit and the volunteers who worked for it were that volunteers who were able to work manning the telephone help lines, did so in shifts of four hours at a time for which they received remuneration. The way in which the work was allocated and the volunteers came in to do it was in some ways akin to what is nowadays known as a "Zero Hours Contract". In other words volunteers who were available to do shifts were offered work as and when it was available, and it was by agreement between them and the Respondent charity when and for how long they came in to work. There was no obligation on the charity to provide a set minimum number of shifts for them to work, and conversely there was no obligation on the volunteers to come in and do shifts when they were offered.
9. Up to the end of 1995, the custom had been that volunteers who worked for two consecutive four-hour shifts on a given date took a (no doubt much needed) half hour break between them, and were entitled to be paid remuneration of £3.50 per half hour break when the double shift was worked.
10. According to the Tribunal's findings, in December 1995 Quit found that to keep its terms for a Help line contract with an outside employer (for which it was then tendering) competitive, it had to cut its costs so far as possible, and this involved having to withdraw the offer of payment for the half hour break between two double shifts when the volunteers worked these. Thus, although there is no dispute that until that date volunteers working double shifts had been entitled as a matter of agreement to be paid the £3.50 for their half hour break, after December 1995 the Respondent made it clear that this was no longer on offer for shifts worked after that date. This had been made clear to the counsellors including Ms Fox.
11. Again according to the findings of the Tribunal which are not in dispute, after December 1995 the volunteer counsellors including Ms Fox did continue to work on the basis of these revised arrangements. Those who worked double shifts, including Ms Fox, did not receive remuneration for the half hour meal break in between the two. As recorded by the Tribunal in their findings in paragraph 9 of their extended reasons, she worked "more or less continuously for four and a half years" on the shift basis we have described, including the period after the usual break payments were no longer on offer.
12. Towards the end of 1997 or the start of 1998, problems arose between Ms Fox and the Respondents. As the Tribunal recorded in paragraph 26 of their extended reasons she complained that she had not been offered sufficient shifts as shift leader, and had written a memorandum which she had circulated to other shift leaders and staff in which she made allegations concerning the Respondent's organisation. Those allegations were taken seriously by the Respondents and Ms Fox was suspended. The reasons for this action are not necessary to go into here as they do not form any part of the appeal before us but they appear to have involved suggestions that she had been insubordinate and had breached professional ethics in the way that she had circulated this memorandum. It further came to light that Ms Fox had not completed a training programme which the Respondents required all their volunteers to undergo if they were to continue with them. When this was put to her, (as the Tribunal recorded) although she knew from the outset that ongoing training was essential to her work, she refused to complete the training and obtain the certificate which was a requirement for all volunteers with this organisation.
13. Her suspension on 24 April 1998 was followed by her departure from work as a volunteer with Quit and she received payment up until May 1998. After that she ceased to have any relationship with them.
14. As I have said, the circumstances of her departure were the subject of an unfair dismissal complaint to the Tribunal, which they held to be unfounded. That finding is not challenged on the appeal to us. The only issues which we have to consider arise out of the Tribunal's finding that there had been no unlawful deduction from Ms Fox's wages, as she had alleged in the Originating Application. The nub of that allegation was that the Respondents had improperly deducted the amount of £3.50 for the meal break, on each occasion when she had worked a double shift from December 1995 until her engagement with the Respondents came to an end in the Spring of 1998, a period of some two and a quarter years.
15. That was alleged to be contrary to the provisions of Section 13 of the Employment Rights Act 1996: the present form in which the old legislation dating from the Truck Acts now appears, prohibiting employers from making deductions from the wages of their workers unless certain conditions as to authorisation are met.
16. The Tribunal's findings and conclusions on this issue are set in paragraphs 22 – 24 of their extended reasons which its convenient to quote in full: -

"22. We then considered whether there had been an unlawful deduction from Ms Fox's wages when, in December 1995, a payment of £3.50 for a half hour's break was withdrawn from part-time employees. There was no dispute that employees working a double shift were entitled to a break. We considered the evidence of the Respondent's witnesses that, during this period, the Respondent was, for the first time, tendering for a contract. They had to be cost effective. They chose to be cost effective by means of removing the half hour's break payment. They could have chosen other means but this was one of the means that they chose.

23. We accept the evidence of Mr S P Crone, director of services, that he had discussed with Ms Fox and with other shift leaders the necessity of withdrawing this benefit. We accept his evidence that the counsellors accepted the necessity for this. They may not have done so with relish but they accepted the necessity to make savings and, if the Respondent had not won the tender, then they would all have been out of work. Clearly, it was more cost effective to them to have accepted the reduction of payment by means of the removal of the £3.50 for the half hour break than to have lost their position in total. We heard Ms fox's evidence that she did not object to this at the time. She had advice from the Citizen's Advice Bureau. This does not appear to have been the correct advice that she could not complain of an unlawful deduction from her wages until she had completed two years' service. She was advised to go through the internal procedures. She maintained that there do not appear to have been any formal grievance procedures at this time but there were certainly informal procedures. Ms Fox chose not to proceed with these informal procedures. Ms Fox maintained that, when she was initially informed of the withdrawal of this benefit, she had complained to Mr Crone. Mr Crone denied this. It is difficult to know at this stage whom to believe as memories fade. However, there is no doubt that she did continue to work with these deductions being made until the termination of her employment.

24. We find that Ms Fox affirmed the change in her working conditions. We do not find that there has been an unlawful deduction from her wages."

17. Mr Marc Jones who appeared on Ms Fox's behalf before us sought to challenge the Tribunal's findings as incorporated in those conclusions on three grounds set out in his firm's notice of appeal as amplified in his address to us. First he said that as it was common ground that Ms Fox had at no stage been given written particulars of the terms of her engagement with the Respondents, either before or after the change in December 1995, the Tribunal had erred and misdirected themselves in failing to apply the provisions of Section 13 of the Employment Rights Act 1996, which prohibit unauthorised deductions from an employees wages except on conditions which he said were not satisfied here. Secondly he submitted that the Tribunal's determination that the Applicant had in effect affirmed the removal of the right to this £3.50 break payment was inadequately expressed, and involved what he described as a "non sequitur." Thirdly, developing from that second submission he said the Tribunal's statement of reasons had failed to record findings of fact and an explanation of their reasons with sufficient clarity to satisfy the well known test in Meek –v- City of Birmingham [1987] IRLR 250 that a Tribunal must give sufficient reasons to explain to the parties the conclusions they have reached, so as to enable them to understand who has won and who has lost on a particular issue and why.
18. Miss Eady, who appeared for the Respondents before us, challenged Mr Jones' submissions under all of these heads. Her submission was that the Tribunal had not been guilty of any misdirection in the way they had applied the potential issues arising under Section 13 of the Employment Rights Act, because it was plain from the facts they found and the evidence before them that there had been no deduction from wages in this case. This was simply a case where the agreed contractual wages had been altered from December 1995 onwards by agreement; albeit as the Tribunal put it, without any particular relish on the part of the counsellors, but nevertheless by agreement. The starting point for any consideration of whether there had been an unlawful deduction contrary to Section 13, was to consider what were the contractual wages actually payable for the relevant period. On the basis of the agreement which the Tribunal found to have been reached, these did not include any entitlement to the £3.50, where a counsellor happened to work a double shift at any time after December 1995. Further she said that this way of looking at the matter and the Tribunal's reasons for reaching the factual conclusions they did appeared with clarity from the passage from the Tribunal's statement of reasons that I have just read, so that no question of any error of law arose.
19. We accept Ms Eady's submissions. We are not satisfied that any error of law on the part of the Tribunal has been shown by what was put before us by Mr Jones. His point on what he said was misdirection by the Tribunal about Section 13 appeared to us to be based on a fallacy about the way Section 13 actually works.
20. Section 13(1) prohibits an employer from making a deduction from "wages" of a worker employed by him, unless the deduction is required or authorised to be made by statutory provision or by a relevant provision of the worker's contract. As Mr Jones pointed out, entirely rightly, where a deduction to which that sub-section applies is sought to be made, it is only authorised if what is described in Section 13(2) "as a relevant provision" in writing permits it. But Ms Eady appeared to us to be right in arguing that questions of whether a particular deduction was authorised, and questions whether a relevant provision in writing had been either agreed to by the employee or furnished to him in terms to satisfy the later provisions of Section 13, only arise if a primary and more important question (in the context of this case) has been answered in favour of the claimant. That is that what is sought to be done involves a deduction from "wages" at all; and as Ms Eady pointed out, really what one ought to do is to start off by looking to see what "wages" actually means in the context of the particular case. The answer to that is to be found in Section 27 of the same Act, where there is a lengthy definition the material part of which for the present purpose reads as follows: -

Sub section (1):-

"In this Part "wages" in relation to a worker, means any sums payable to the worker in connection with his employment, including any fee, bonus, commission, holiday pay or other endowment referable to his employment…"

21. The primary question that has to be asked is whether the reduction in remuneration which took place in December 1995 by the removal of the entitlement to £3.50 for the half hour break between two double shifts, altered the amount of the "wages" to which volunteers who accepted shifts after December 1995 were entitled for this purpose.
22. We were referred to the judgment of this Tribunal in Bruce –v- Wiggins Teape [1994] IRLR 536, and although Mr Jones sought to rely on this in support of his own case, it appears to us to demonstrate the separate questions that have to be answered and indeed the fallacy in the argument he put before us under this head very clearly. In paragraphs 14-15 Mummery J, as he then was, said

"14. For these reasons we are of the view that no valid distinction is to be drawn for the purposes of the 1986 Act, [as it then was,] between on the one hand a deduction from wages and on the other hand a reduction in wages. The issue is whether for whatever reason, apart from an error in computation, the worker is paid less than the amount of wages probably payable to him.

15. The crucial question is therefore what was the amount of wages "properly payable" to the workers on the facts found by the Industrial Tribunal. The conclusion on this point is clear. Wiggins Teape agreed to pay the enhanced rate of over-time to personnel including the workers on the rolling night shift. They in fact paid the enhanced rate for almost four years. The workers had never agreed to a reduction in the enhanced rate. After the decision was taken to reduce the enhanced rate the workers continued to work under protest. There was no finding by the Tribunal that the workers, by continuing to work accepted a reduction or other variations in the amount of wages payable to them for over time. …The workers simply continued to work under protest. There was no acceptance by them of a change in wages."

23. As the sentences we have emphasised show, the facts in that case, and the context against which the remark that a deduction from wages and a deduction in wages were to be equated for the purposes of what is now Section 13 was made, were that there had been a unilateral proposal by the employer to impose the deduction or reduction which had never, as a matter of fact, been agreed by the workers concerned. Until the question of whether what is paid is less than agreed is answered in favour of the worker, it appears to us that Ms Eady is quite correct in arguing that the more detailed questions under Section 13 itself can never arise. Accordingly we are not satisfied that there was any misdirection on the part of the Tribunal in this case in focusing its attention, as it clearly did, on the question of whether the £3.50 reduction in the overall remuneration for employees working double shifts had been agreed between the employees and the Respondents or not after December 1995. Everything therefore depends on the Tribunals findings of fact in this case. Where a Tribunal finds on the facts that there has been no (to use a neutral expression) shortfall in the wages properly due, there can be no question of an unlawful reduction or deduction contrary to Section 13.
24. The Tribunal's findings of fact, as recorded in paragraphs 22 –24 which we have already quoted, appear to us to demonstrate that they had exactly this point in mind, as one would expect, since Mummery J's judgment and the principles involved are well known. They appear to us also to demonstrate that the Tribunal were correctly directing their minds to the question of whether there had been an agreed reduction in the contractual entitlement for the employees who chose to work shifts after December 1995, or not.
25. On the facts, the Tribunal appear to us equally clearly to have been holding that although the counsellors including Ms Fox were unhappy about the necessity for the reduction in overall remuneration that was involved in no longer paying for the meal breaks, they in fact accepted it. That was what the Tribunal expressly found in paragraph 23 which also appears to us to embody a finding that Ms Fox was among the counsellors who accepted expressly that this amount would no longer be payable for shifts worked after December 1995. Furthermore, we also accept Ms Eady's submission that if there was any doubt about that, the Tribunal made and recorded a further finding of fact, justified on the evidence, that by continuing to work without apparent further protest for a further two and a quarter years after December 1995, and accepting payment that did not include the £3.50 for the half hour meal break when she worked double shifts, Ms Fox had affirmed the change in her working conditions; and could not then complain that there had been any breach of contract on the part of the employers in failing to pay her the wages to which she was entitled under the agreement between her and them.
26. Mr Jones sought to persuade us that the reference in paragraph 23 of the Tribunal's stated reasons to Ms Fox having said that she had initially made a complaint to Mr Crone about the withdrawal of the benefit invalidated the conclusion they otherwise appear plainly to have drawn that she had albeit reluctantly, accepted it. We do not agree with that. The Tribunal referred to her having given evidence of this, which was disputed by Mr Crone the person she said she had spoken; to but whether or not that is accepted as a matter of fact as having taken place at the early stage, it appears to us quite clear that the Tribunal were accepting Mr Crone's evidence as to the discussions that had taken place. These had involved Ms Fox, and as they found there had in fact been acceptance of the part of the counsellors concerned that there should no longer be remuneration for the half hour breaks in question. After a delay of so long as two and a quarter years that appears to us to have been a wholly reasonable conclusion for the Tribunal to have drawn on the evidence, and we accordingly have not been persuaded that there was any lack of clarity or error on the part of the Tribunal in the way they dealt with the facts or the factual conclusions they recorded in those paragraphs.
27. Mr Jones further said that there had been a lack of clarity in that the Tribunal had failed overtly to make any express mention of the provisions of Section 13 in their Statement of reasons; but as we have concluded for the reasons already given, no issues in fact arose on any "deduction" under Section 13, in view of the Tribunal's factual findings as to the change in the entitlement of the Appellant to "wages" at all material times after December 1995. Thus we have not been persuaded that there is even an arguable ground for setting their decision aside on that issue. On that basis, there being no other arguable grounds for holding the Tribunal's decision erroneous in point of law, we now unanimously dismiss the appeal.