United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR A THOMPSON And MR B BURGHER (of Counsel) Instructed By: Messrs Abercorn Solicitors Suite 414 258 Belsize Road London NW6 4BT
For the Respondents	MR D PANESAR (of Counsel) Instructed By: Messrs Argles Stoneham Burstows Solicitors 8 Ifield Road West Sussex RH1 7YY


 


MR JUSTICE LINDSAY (PRESIDENT):

1. For some years about 250 of the ground staff employed by the Respondent, Gatwick Handling Ltd, at Gatwick Airport have been working 12 hour shifts (4 on, 4 off) and in the course of each of those shifts have been provided with 2 half-hour meal breaks. Although a cycle of work on the 4 on 4 off shift pattern takes 8 days to complete these members of staff are remunerated by the week on the basis of a 40 hour week (plus a fixed sum for shift pay). Working 48 hours in 8 days is, however, the equivalent of working 42 hours a week. Despite that (and leaving aside any overtime worked in excess of the 4 on 4 off 12 hour shift pattern) the Company has been paying the employees as if for only 40 hours per week. It claims that in each 12 hour shift only one of the 2 half-hour meal breaks was in paid-for time, thus reducing the 42 hours of the Employees' attendance to only 40 hours time required to be paid for. The Employees say there is no basis for allowing only one meal break to be in paid-for time; both should be paid for and, they say, by paying only for 40 hours a week the Company has been making an unauthorised deduction from wages within the meaning of section 13 of the Employment Rights Act 1996.
2. There was a hearing before the Employment Tribunal at London (South) under the Chairmanship of Mr R.W. Rideout over 3 days in April 1999. The Employees' claims under section 13 failed. They now appeal to us.
3. The difference between the parties is as to the terms of employment of the individuals concerned and we shall have to look at those in detail but before we do that we shall first make one observation as to the law and then draw attention to some relevant findings of fact made by the Tribunal.
4. As for the law, the rule that the construction of documents is a question of law is applicable where the parties intend all the terms of their contract (apart from those implied by law) to be contained in one or more documents. It does not apply where the intention of the parties, objectively ascertained, has to be gathered partly from documents but also partly from oral exchanges or conduct. In the latter case the terms of the contract are a question of fact and it is also a question of fact whether the parties intended a document or documents to be the exclusive record of their terms of agreement - see Carmichael -v- National Power plc [2000] IRLR 43 H.L. per Lord Hoffmann at paragraphs 28 and 29. We mention this at the outset because, of course, fact is the province of the Employment Tribunal and we can only deal with error of law.
5. As for relevant findings of fact made by the Tribunal, it accepted that the Employees had not realised they were working 42 hours per week but rather had been told, either on induction courses or by hearsay from colleagues, that 48 hours worked over eight days averaged 40 hours a week over a period of 16 weeks. They had no indication they had worked 42 hours a week until employees of another company at Gatwick, Service Air Ltd, negotiated compensation for the extra hours worked. The management, by contrast, did say that they knew that the 12 hours shift led to an average of 42 hours per week. But at no time were the employees told that a second meal break per shift was unpaid, nor did the employees agree to work unpaid over a second meal break per shift. We shall need to revert to another finding of fact later but that suffices for the moment and we turn to the written terms of the employees' contracts.
6. It is, perhaps, unsurprising, given that the Applicants were some 250 in number and had begun work for the Company at different stages over a period of several years, that there were different forms of contract before the Tribunal. However, for present purposes we believe we can take that of Mr N.J. Gaskins as typical. It was made on 30th October 1986 between the Company and Mr Gaskins. It is some 8 pages of typescript. It purports to have been issued in conjunction with 4 other described documents such as Disciplinary Procedures and the Sickness Scheme. It begins (with our emphasis):-

"1. The document sets out the terms on which the Company has offered to employ the employee, and which the employee has accepted in writing by his signature at the end hereof".

The use of the definite article suggests that the document sets out all the terms not implied by law and that view is bolstered by clauses 3 and 4 which respectively provide that the agreement constitutes a written contract of employment (and not therefore, for example, mere particulars of some terms) and that it is not to be varied otherwise than by notice in writing from the Company to the employee. No such notice was said to have been given. Clauses 6 and 7 provide:-

"6. This contract is subject to the terms of the agreements between the Company and the Transport & General Workers Union relating to weekly paid staff in force at the date hereof.

7. In the event of a conflict between a term of this Contract and the terms of an agreement incorporated by Clause 6, this contract shall prevail over any such term as is in force at the date hereof".

There were then other provisions of a conventional kind and then came section "D. Hours of Employment", as follows:

"17. The hours of employment are forty hours per week. The employee will be issued with a shift pattern on the completion of training. This shift pattern is subject to change by the Company in line with operational requirements at any time during the period of employment.

18. ...........

19. The employee will work reasonable overtime when required. While every effort will be made to give reasonable notice of overtime, no minimum period of notice is guaranteed to provide overtime working.

20. Two meal breaks will be provided during the course of any 12 hour shift. Whilst the Company will offer as much flexibility with regard to meal breaks as possible, any employee not offered a meal break to commence between 1200 hours-1500 hours will be paid an half hour overtime in lieu of the meal break not being offered".

Then under the heading "Remuneration" there were descriptions of the employee's basic salary by the week, with a provision for shift pay. Wages were to be paid weekly in arrear. Overtime was to be paid with the wages for the week following that in which the overtime was worked. Amongst the many other provisions were ones requiring an employee to comply with any reasonable instructions as to appearance and dress either while in the course of employment or whilst wearing the Company uniform and not to consume alcohol whilst on duty or in the Company uniform - clause 48. Clause 57 required the employee to perform his duties with reasonable efficiency and diligence on pain of shortcomings being regarded as misconduct and the Company's disciplinary procedure was stated to form part of the contract.

7. Before we examine whether there was any material provision of any agreement between the Company and the T & GWU to which this written contract was subject within the provisions of clause 6 and 7 supra, there are a number of points to be made.
8. The shift problem was susceptible to change. A man working the 4 on 4 off 12 hour pattern could be changed on reasonable notice in line with operational requirements. Overtime, whilst not guaranteed, was, if required by the Company, in effect mandatory so long as "reasonable" and could be required on very short notice. "During the course of" any 12 hour shift (a phrase which suggests that the meal break would be taken to be within and part of the 12 hours) two meal breaks would be "provided" and not merely available to be taken. No express mention is made of any distinction between one meal break and another. Nothing states that only one is in paid-for time. Mr Panesar for the Company refers to clause 20's provision as to cases where no meal break is "offered" between 1200 hours-1500 hours as a distinction between the 2 breaks but we do not accept it operates as that. In point of language it appears to do no more than compensate for no break being available in the middle of the day and, as Mr Thompson for the Employees points out, there is no corresponding provision as to a meal break during the night 12 hour shift. We were told that employees in the canteen (a canteen pass for each employee was provided for by clause 61) were forbidden to consume alcohol during meal breaks though we did not explore what the position would have been if an employee minded to consume alcohol in his meal break had either not been wearing or had slipped out of Company uniform.
9. Basing himself on the contract as thus far explained Mr Thompson for the Employees advances an argument of engaging simplicity. The Employees are required to attend for work during certain hours in the sense of or as if clocking in at one time and out at another. Not to observe the specified times would be a breach of clause 57. Between clocking in and clocking off the employee is employed, at all events unless there is clear agreed provision to the contrary. The employee will in general during that period be subject to the provisions of the contract; he must comply with instructions as to dress and appearance; he must not consume alcohol, he must behave with reasonable courtesy and devotion to fellow employees (clause 57) and not offend customers on pain of shortcomings being contractual misconduct. In such a way (although the Employees failed to spot this) they were employed for 42 hours a week. True it is that the contract says that the employment is for 40 hours per week but that merely creates an obligation on the Company to provide 40 hours and for the employee to attend for work for 40 hours. It does not preclude employment consensually or in fact going on longer than 40 hours as, if it did, overtime would not be "employment". If, for a time, both employer and employee agree that a particular shift pattern shall be worked which works out at more than 40 hours a week, nothing denies the hours beyond 40 the title of employment. The employee is as much subject to the direction of the Company in those extra hours as he is in the 40. Of course, continues Mr Thompson, it would be possible for the parties to agree that some period between clocking in and clocking off should NOT be regarded as a period of employment or, whilst a period of employment, should be agreed to be unpaid for, but any such provision is likely to require clear express agreement. There is no generally accepted approach to meal breaks, he says, such that they can assuredly be taken to be periods outside employment or outside paid time. The provision about no consumption of alcohol suggests, if anything, that a person taking a meal break would be regarded as on duty. Commonsense, he perhaps could add, would not support a view that alcohol could be consumed during a meal break so long as Company uniform was not worn. In point of law, continues Mr Thompson, meal breaks, as the Tribunal held, may form part of an employee's remunerated working hours - British Bakeries Ltd -v- Hoggans (unreported) EAT 3rd December 1996. In our case the Company plainly did not act on a view that no meal breaks could be regarded as part of the employees' remunerated time as, had that been the case, employees, whilst working the 12 hour shift with the two meal breaks per shift as contractually provided, would have ended up being "employed" and paid for fewer than 40 hours a week, in breach of the Company's contractual minimum figure of 40 hours a week. Given, therefore, that it was not the Company's position that all meal breaks were outside employed remunerated time, then, says Mr Thompson, either all meal breaks in the 12 hours shift were to be within employment and within paid-for time or some express provision was needed to distinguish between the one meal break and the other or at least to specify a clear limit of only one as to be paid for. However, concludes Mr Thompson in this part of the argument, no such express provision is to be found and accordingly, he says, both meal breaks are remunerated and his clients have consistently been working 42 hours yet have been paid for only 40.
10. Reminding ourselves of the inherently unlikely but (on the evidence heard) unchallenged finding that, as we have mentioned, the Employees had not realised they were working 42 hours but were being paid for only 40, and also that the Company never told them that that was the case and, at any rate when the information was given out at induction courses that the 12 hour shift systems represented only 40 hours a week, that the Company might itself have contributed to the view taken by the Employees, we find the Employees' argument thus far very attractive.
11. However, we must go back to clauses 6 and 7 of the Gaskins contract. Is there any agreement falling within clause 6 to which the Gaskins contract is subject and which denies force to Mr Thompson's argument yet without being in conflict with the Gaskins written terms so as to be deprived of effect under clause 7?
12. Mr Panesar first refers to the Minutes of a Meeting on 13th December 1971 at a time when the 12 hour shift was newly introduced or about to be introduced. Under the heading "Hours of Work" (and leaving out parts not material for present purposes) it says:-

"Staff expressed the view that as the new shift system would produce over a 16 week cycle a total of 672 hours as opposed to 16 weeks of 40 hours (640 hours), that the 32 hours excess would be given to the Management in exchange for maintaining the present meal breaks system (paid meal breaks). Management agreed that this was acceptable to them and also that they recognised that there would [be] a necessity for 2 meal breaks during the 12 hour shifts which would not total more than one hour in all. It was recognised that the second meal break was solely due to the staff requesting a 12 hour shift pattern and that this amounted to 2 hours a week extra mealtime which the Company would not expect to pay when working an 8 hour system".

13. We do not regard it as possible to read this provision as an indication of agreement that, so long as the 12 hours shift was worked, employees working it would be paid for only one of 2 meal breaks per shift. That 32 hours were to be "given" to the Management is consistent with it being understood that in those 32 hours the employees would be and behave as "clocked on" and thus be on the premises and susceptible, for example, to being required to work reasonable overtime (under clause 19 as later emerged), wear the uniform (clause 48), not consume alcohol (clause 48) and behave in all the ways required of an employee during employment. Moreover, the "gift" of the 32 hours is in exchange for "maintaining the present meal breaks system (paid meal breaks)". If there had been any intent to switch from every meal break taken being paid for by the Company (the system under the earlier 8 hour shift system) to a system under which only half were, a reference to the present system of paid meal breaks was not competent to express it.
14. The suggestion that the 12 hour system was "solely due to the staff requesting a 12 hour shift system", in the light of later events, is a little disingenuous; under the Gaskins contract the Company could change the shift pattern in line with its operational requirements (clause 17). As it has kept the 12 hour system one can take it that the system is convenient also for its operational requirements.
15. The reference to the Company not expecting to pay an extra mealtime when working an 8 hour system is entirely consistent with the Company saying that if the shift pattern changed back to the 8 hour system it would not then still expect to pay for 2 meal breaks. It does not amount to a refusal to pay for 2 meal breaks under the 12 hour system and, if that had been intended, the words "when working an 8 hour system" could have been omitted.
16. Mr Panesar candidly accepts this 1971 Minute is capable of more than one reading. It is a fair riposte that in an area – contracts of employment – where clarity is desirable and where the alleged meaning supported by the employer is unusual – one meal break is paid, one is not, - such ambiguity should redound against the employer whose standard written terms are in question.
17. However, more fundamental objections exist to the Gaskins contract being subject to the terms of this 1971 Memorandum. It was not an agreement between Gatwick Handling Ltd and the T & GWU. The agreement, if such it was (as opposed to its being merely an agreed step in negotiations) was not with the Union; a T & GWU Official was there merely as "also in attendance". The agreement was made with an "Employees' Side" made up, presumably, of some staff then working at the Airport. Further, the "Employers' Side" was not Gatwick Handling but perhaps Dan-Air Ltd or another contractor. Given the explicit terms of clause 6 in its description of the extraneous terms to which the Gaskins contract would be subject it is not possible to make it subject to terms of agreements of a quite different description.
18. Next Mr Panesar refers to a Memorandum of Agreement between Dan-Air Services Ltd and the T & GWU of January 1972. Again there are difficulties in the way of seeing it as able to qualify the Gaskins contract. Gatwick Handling Ltd was not a party to it. It is expressed to not be legally binding. It speaks of a working week of 40 hours but nothing in it precludes clocked on hours exceeding 40 as being within employment. It provides that shift rosters will be agreed at local level so does not deal expressly with the 12 hour shift system. Meal intervals, it says, shall be the subject of local discussion and arrangements to suit operating conditions. That throws no light on the questions before us. It continues:-

"Should an employee be required to work through his meal interval, an alternative meal interval will be allowed immediately before or after the time of the normal meal interval. Failing this, an employee will be entitled to payment at overtime rates for the time worked during his meal interval".

We do not see this as an indication of a regime under which one of two meal breaks is not to be paid for; it seems to us neutral on the point. If a man, otherwise entitled to sit on his thumbs for his half-hour meal break, is required to work instead, the fact that he is, for that half-hour, to be paid at overtime rates does not throw light on whether he would otherwise have been unpaid for that half-hour or paid at only the ordinary rate.

19. The January 1972 Memorandum had a number of appendices one of which, under the heading of "Holiday Entitlement" refers to "the discussion held at a meeting on the 13th December 1971". So far from indicating that the written Minutes of the Meeting of 13th December 1971 were carried en bloc into the Memorandum of Agreement of January 1972 the reference is, if anything, to the contrary effect. The 1971 arrangements are spoken of merely as a "discussion" and, had the 1972 Memorandum of Agreement been intended to incorporate the whole of the 1971 arrangements then the reference to the 1971 Arrangements would surely have been found otherwise than in an appendix merely on the subject of holidays.
20. Despite Mr Panesar's argument we are left with nothing to which, within clause 6 of the Gaskins contract, that contract is subject. Yet looking only to the terms of the Gaskins' contract, for the reasons we have given, we find Mr Thompson's argument attractive. There is nothing left to deter us from accepting it, save for only one finding of the Tribunal, purporting to be a finding of fact. The Tribunal in its paragraph 18 held that:-

".... the Tribunal accepts, as a matter of fact, that there was a collective agreement made in 1971 that in return for providing the 12 hour shift pattern which had been requested by staff at that time the second meal break, made necessary by the length of working time, would not be paid".

There is no suggestion that any of those present on 13th December 1971 gave evidence or that by any other route there was evidence that the 1971 Memorandum did not record the totality of anything then agreed, nor that it was intended that it should not do so. The Tribunal's conclusion, so far as one can tell, was arrived at as a matter of construction of the 1971 document and nothing but that. It was arrived at, in other words, as a matter not of fact but of law. As such we are entitled to disagree with it; for the reasons we have given we see the 1971 Memorandum as consistent with there then being no prospectively binding agreement that one of the two meal breaks would be unpaid. But let us suppose we are wrong as to that; there is still no path by which the 1971 Memorandum can be incorporated into each Gaskins-type contract unless either the Company and the employee in question so agreed or the 1971 Memorandum fell within the incorporating terms of clause 6 of the Gaskins contract. There was no evidence of the former and we have shown how the latter is not the case. Whilst the Courts are often very willing to allow collective arrangements into individual contracts, when there is, in each individual contract, an express provision the terms of which are clear and specific about to what other provisions the individual contract is to be subject, the Court cannot rewrite the contract to incorporate that which the express terms would not permit to be incorporated. In our judgment the Tribunal erred in law by doing just that. It is not as if it was open to the Tribunal to hold as a fact that this employee or that had not intended his particular "Gaskins" contract not to be that exclusive record of the terms of his agreement which its own language suggested it was. There is no indication of evidence having been given to that effect and, to the contrary so far as concerns the 1971 Minutes and the 1972 Memorandum, all the applicants gave evidence they knew nothing of the 1972 Agreement.

21. Accordingly we cannot confer on the Tribunal's paragraph 18 cited above the unassailable title of a finding of fact based on evidence heard. It was not. We are free to and do depart from it. We are thus also free to accept and do accept Mr Thompson's argument as we have described it. In our view the total amount of wages paid, based, as it was, on 40 hours worked, was less than the amount properly payable, which should have reflected 42 hours worked. Under section 13 (3) of the Act the difference is to be treated as a deduction. Such deductions were at no stage authorised by a "relevant provision" within section 13 (2). Gatwick Handling Ltd thus infringed section 13 (1). We accordingly allow the appeal and set aside the decision of the Tribunal.
22. As for the practical consequences of that, the Tribunal, of course, never had to deal with them. If terms cannot be agreed then the matter will need to be remitted to the same Tribunal to compute the consequences in the light of the view we have taken of the law. We shall postpone the formal remission for 28 days to ensure the parties are afforded time to negotiate. If there is a further hearing it should be preceded by a directions hearing at which the Tribunal can rule upon whether, at the remitted hearing, there can or needs to be any, and if so what, further evidence.