THE
HONOURABLE LADY SMITH
Introduction
1.
Dr Morgan was a hospital doctor in training, employed by Greater
Glasgow Health Board. He complained to an Employment Tribunal sitting at
Glasgow (Employment Judge SFR Patrick) that he had suffered an unlawful
deduction from wages when his non-pensionable pay supplement was halved. His
complaint was not upheld and he now appeals to this Tribunal.
2.
I will, for convenience, continue to refer to parties as Claimant and Respondent.
3.
The Claimant was represented by Mr B Morgan, solicitor, before the
Tribunal and before me. The Respondents were represented by Mr I Truscott
QC before the Tribunal and before me.
Background
4.
The Claimant began working as a Specialty Registrar in Psychotherapy for
the Respondents on 6 August 2008, training with a view to becoming a
consultant psychotherapist. The training period was three years. Separate
contracts were issued for each year of training.
5.
Four terms were used in his contracts which are important. One was
‘rotation’. It is defined in the standard NHS Terms and Conditions (2007) as
follows:
“21. …a rotation is a series of posts or placements forming part
of a training programme which might be in any training grade. Such a rotation
may involve the trainee having a series of different employing authorities and
contracts, but will not involve a new appointment panel.”
6.
The second was “placement” which, although not specifically defined was
agreed by parties to refer to the placing, each year, of a doctor in training
according to the decision of NHS Education for Scotland (“NES”) as to where the
doctor was to work that year and in what post. NES notify health board
employers such as the Respondents of trainee doctors’ placements for the
following year. Placements usually begin in August.
7.
The third term was ‘post’ which is not specifically defined in the
relevant contractual documentation but parties appeared to agree that it
referred to the job or role that the doctor is appointed to perform within his
placement. Since a placement may involve only one post, the terms ‘placement’
and ‘post’ are often used interchangeably.
8.
‘Bands’ and ‘banding’ are also referred to in the Claimant’s contracts.
They relate to pay for out of hours work. All that need be noted for the
purposes of the present case is (a) that doctors such as the Claimant are paid
a base salary plus a non pensionable supplement; and (b) that the pay band
specified in a doctor’s contract determines the amount of the supplement, which
is expressed as a percentage of base salary.
9.
The movement from one placement to the next is not automatic. As a
doctor is reaching the end of a placement, he is assessed and must have reached
a satisfactory level before he can move to the next level of training. He
could, if his performance has been unsatisfactory, be held back or even not
offered a further contract. Thus, when a doctor in training is, at the end of
one placement, offered a fresh placement, it is indicative of him having met
the assessment criteria which enable him to move on to the next level of
training.
10.
The Claimant’s contract for the year 5 August 2009 to 3 August
2010 (year two of his training) stated that he was appointed as Specialty
Registrar in Psychotherapy based at Gartnavel Royal Hospital and:
“3…
(b)
You will receive a base salary…as detailed in Table 1, Appendix of the Terms
and Conditions of Service.
(c)
A non-pensionable supplement at the following payband will be payable in
accordance with paragraph 22 of the Terms and Conditions of Service - 1B. (For
rotations, banding supplements may differ for each individual post).
(d)
Banding supplements may be altered...(Pay protection will apply in accordance
with paragraph 21 of the Terms and Conditions of Service).
Pay
4
(a) Your base salary will be £29,411 per annum, paid monthly and will progress
by annual increments to £46,246 per annum in accordance with the national
agreed salary scale for your grade (pay award pending). These rates may be
amended from time to time by National Agreement.
…
(b)
You will receive, in addition to your standard salary, a supplement at the rate
of 40% of your standard salary for duty contracted at the band set out in
Paragraph 3(d) above, which will be payable monthly. The rates may be amended
from time to time by national agreement.”
11.
That contract had an express date of termination of 3 August 2010.
12.
The Claimant was issued with a fresh contract for the year 4 August 2010 to 2 August 2011 for the third year of his training in psychotherapy. It
stated that he was, again, appointed as Specialty Registrar in Psychotherapy
based at Gartnavel Royal Hospital. (I was advised that he in fact worked at
the Western Infirmary in both 2009/10 and 2010/11 but nothing seems to turn on
that). Clause 3(b) was in the same terms as 3(b) above. Clause 3(c) was in
the same terms as the previous clause 3(c) except the pay band was stated to be
1C, which was a lower band than 1B. Clause 4(a) was in the same terms as
above but stated that his base salary would be higher, at £29,705 per annum
with incremental progression to £46,708 per annum. Clause 4(b) was in the same
terms except that the supplement was stated to be 20%.
13.
The NHS Terms and Conditions to which both contracts refer contain the
following provisions:
“21a. Full time practitioners in the training grades receive a
base salary... An additional supplement will be paid according to one of the
pay bands, in accordance with the assessment of their post as described in
paragraph 22 below, at the rates set out in Appendix 1.
…
Principles of Pay Protection
f. The principle of pay protection applies to practitioners in
all bands for the duration of the post/placement or within a rotation subject
to the conditions set out in sub- paragraphs 21.h to m.
g. Pay protection applies to the base salary on the scale plus
the supplement in payment at the time the post or placement is rebanded…
Pay Protection in New Deal Compliant Posts
h. Where a practitioner reaches agreement with his or her
employing authority on a new or revised contract on or after 1 December 2000, the practitioner’s post shall be re-assessed in accordance with
paragraphs 19 to 23, effective from the date of the change. For so long as it
is more favourable, and so long as the practitioner remains in the same post,
the practitioner shall retain the overall salary applicable to the band he or
she was placed in immediately before the change...”
14.
When the Claimant received his contract for the year August 2010 to
August 2011, he complained that it did not afford him pay protection as it
ought to have done. He emailed the Respondents on 12 July 2010 and asked for an assurance that pay protection would apply to his salary from August 2010
onwards. In a further email dated 26 August 2010, he asserted that he was entitled to pay protection “at Band 1B” because he had continued in the post he
started in August 2009. The Claimant did not sign that contract. He did,
however, work as a third year Specialty Registrar training in psychotherapy,
from 4 August 2010 to 3 August 2011.
15.
The Respondents did not provide the assurance sought and the Claimant,
accordingly, presented a complaint of unlawful deduction from wages to the
employment Tribunal.
16.
The Claimant did not sign the new contract but he did carry on working
for the Respondents at Gartnavel Hospital as a Specialty Registrar in
Psychotherapy.
Tribunal’s Judgment and Reasons
17.
Before the Tribunal, the Claimant’s argument was that (a) he had not
accepted the new contract issued for the year beginning 4 August 2010 – he had
continued to work under the contract which was dated 3 August 2009; and (b)
that if he was working under the new contract the effect of the pay protection
provisions was that they applied because he was still working in the same post.
18.
The Respondent’s response was that the August 2009 contract did not
still apply; it was a fixed term contract which had terminated. It could,
conversely, be implied from the Claimant’s actings that he had accepted the
second contract albeit subject to a reservation regarding the matter of
banding. Further, the 2010 contract involved a fresh placement and a fresh
post. The Claimant was not in the same post as the previous year. Pay
protection did not, accordingly, apply.
19.
The Employment Judge rejected the Claimant’s claim founding,
principally, on his interpretation of clause 21f. He was satisfied that pay protection only applied until the end of each placement. At
paragraph 30, he explains:
“30. The wording of paragraph 21f is somewhat confusing. On my understanding of the relationship between the post or placement in
which a junior doctor is working and the rotation under which he is training
the word “or” in the paragraph makes no sense. I suspect it should not be
there and the only way to make sense of the paragraph is to treat it as pro
non scripto. That is now I consider it appropriate to interpret it. The
question then arises whether the expression “post/placement” allows of the
interpretation which would support the claimant’s case. I do not think it
does. I do not find the term “post/placement” a particularly appropriate term
to have been used in a document such as the Terms and Conditions of Service.
It may have been used interchangeably. I noted that Mr Tracey in his
evidence referred, for example, to the fact that it is only on the NES
confirming future “posts” that doctors are offered a new contract. I would have
expected him to use the term “placements” in the context of what NES confirm to
the Boards prior to the doctors being offered new contracts. I find it
significant that paragraph 21f does not apply the principle of pay protection
“for the duration of the post or the placement”. I do not read the expression
“post/placement” as meaning that in the circumstances which applied to the
claimant one can focus on the post and divorce it from the placement. The fact
is that the claimant was given a placement for the final year of his training
which happened to be in the same post as that which he occupied in the
placement he had for the penultimate year. While that placement accorded with
his own wishes it was still a placement instigated in the usual way by NES. It
was as a result of the NES confirming the placement for the claimant on 7 July 2010 of the contract covering the final year of his training. The placement is the
key thing. In August 2010 one placement came to an end for the claimant and
another came into being, albeit that both entailed his working in the same in
the same hospital. I interpret paragraph 21f as extending the benefit of pay protection to the claimant only until the end of the placement current when the
revision to the banding was made.”
20.
The Employment Judge also considered that his interpretation was
supported by the fact that the banding supplement did not relate to the nature
of a doctor’s work but to the extent to which he was required to carry out work
outwith normal hours. If banding was altered downwards, that was because there
was a reduction in the extent to which out of hours work was required. It
would plainly be unfair if a doctor such as the Claimant, whose fresh placement
appointed him to the same post as he had had in the previous placement,
retained the previous year’s banding irrespective of any re-banding which had
occurred, when a colleague who was new to that post, had the lower pay band.
The Appeal
Submissions for the Claimant
21.
Mr Morgan referred to the facts (as referred to above), which were, he
said, not in dispute.
22.
His first submission can perhaps best be summarised as being a “same
post” argument. It was confined to a consideration of paragraph 21f of the NHS Terms and Conditions. He submitted that “post” was a reference to the particular job
which was, in this case “Specialty Registrar” and “placement” was a reference
to the fact that every year of a rotation, the doctor would have a different
placement. He stated that subparagraphs h to m did not apply to the Claimant’s
case and therefore made the somewhat surprising submission that the part of 21f from “subject to…” to the end, should be ignored. It seemed surprising because a plain reading
of the clause shows that the “subject to..” section is an intrinsic part of the
provision and ignoring it is obviously liable to lead a distortion of meaning.
23.
He submitted that paragraph 21f was not confusing. He found it
extremely straightforward. The Employment Judge had concluded that what
mattered was the placement but that was perverse. 21f was absolutely clear and the principle of pay protection applied to the Claimant.
24.
Mr Morgan referred to the case of Dr M Whitehouse v North Bristol
NHS Trust [2006] UKEAT/06/1007 (a) for the reference in it to
that part of the speech of Lord Hoffman in Investors Compensation
Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 where
he refers to:
“(5) The ‘rule’ of contractual interpretation whereby words
should be given their ‘natural and ordinary meaning’….”
and (b) for the observations of HHJ
Serota QC about pay protection in junior doctors’ contracts, at paragraph 34
that:
“34. The object of the system of pay protection, was I have
noted, to mitigate the potential hardship that might be suffered by a Doctor
who budgeted on the basis of his expected income in the expectation that he
would receive not less than the amount payable for each post in the rotation at
the time the rotation is agreed.”
25.
Mr Morgan referred to a passage in paragraph 19 of the Tribunal’s judgment
as demonstrating that the Employment Judge had accepted that the Claimant had,
in the year beginning August 2010 continued to work for the Respondents in the
same post; that passage is, however, the Employment Judge’s note of Mr Morgan’s
submission, not a statement of his own conclusions. Mr Morgan had,
unfortunately, failed to appreciate that.
26.
Mr Morgan also referred to the penultimate sentence of paragraph 30 of
the Employment Judge’s reasons and submitted that the Employment Judge had
failed to appreciate that the Claimant’s pay was protected not by his contract
but by the NHS Terms and Conditions which he seemed to regard as separate and
distinct. As for the Employment Judge’s other considerations regarding the
disparate circumstances as between junior doctors in the same post that could
ensue, it was not, he said, a matter of fairness.
27.
At one point in his submissions, Mr Morgan conceded that had the Claimant
moved to a different hospital in the year 2010/11, he could not have claimed
pay protection. At another point, he indicated that he would accept that the
import of clause 21f could be seen to be that whenever a doctor left a post,
left a placement or left a rotation, pay protection would be lost. Whilst, on
one view, that concession undermined his argument – his focus was only on post
and he did not suggest that the Claimant had not left his 2009/10 placement –
he did not seem to see it that way.
28.
Mr Morgan had a fallback submission of “same rotation”. If the Claimant
was not in the same post in the year 2010/11 then he was still in the same
rotation so, under 21f, pay protection applied.
29.
Mr Morgan’s second submission was that in the year 2010/11 the Claimant
was still working under the contract issued in August 2009. That was because
he had not signed the fresh contract. He had taken issue with his pay banding;
he accepted that that was all that was at issue between parties. The Respondents
were, he submitted, allowing the old contract to continue; the Claimant
believed that that was the contract he was working under. He had thought that
he was working under band 1B not 1C.
30.
Overall, the position was that the Claimant had been given a placement
in year three which happened to be in the same post. That totally supported
his argument. He was entitled to put that argument forward.
Submissions for the Respondent
31.
Mr Truscott QC submitted that the appeal should be dismissed. There was
nothing in the submissions for the Claimant that came within a whisper of being
a point of law.
32.
The onus was on the Claimant to demonstrate entitlement, this being a
claim under section 13 of the Employment Rights Act 1996 (see: New
Century Cleaning Ltd v Church [2000] IRLR 27). Mr Truscott also
referred to a passage in the judgment of the EAT in the case of Great
Ormond Street Hospital for Children NHS Trust for Children v Quasim
UKEAT/0793/04/RN which the Employment Judge had set out in full in that part
the judgment recording his argument before the Tribunal:
“19…questions of this nature are primarily questions for the Tribunal
dealing with the case to determine. It is a matter of construction and
analysis of the facts of the offer made and accepted in each individual case
whether a particular practitioner has been appointed to a post in circumstances
where band changes are subject to the pay protection under clause 21 of the
Whitley agreement or not.”
33.
Mr Morgan did not take issue with the relevance of either of these
authorities.
34.
Mr Truscott submitted that the Tribunal had accepted that the general
aim of re-banding was to take account of reduction in hours of work required
and that there was no question but that the re-banding exercise was properly
carried out. The Tribunal had found that rotations contain placements, that
placements are made by NES (not by an individual health board such as the Respondents)
and that posts were jobs at particular hospitals. The Claimant was in a three
year rotation. There had been no commitment at the start of the rotation to
keeping the Claimant on the same band.
35.
This case concerned the fresh contract that began in August 2010. The
previous year’s contract had not been open ended. The failure of the Claimant
to sign the fresh contract was not material. He had worked under it. None of
the terms were at issue apart from banding. The Claimant had benefited from
undergoing a third year training contract on which he could rely and to which
he could refer.
36.
Regarding the NHS Terms and Conditions, the Claimant’s contract referred
to and incorporated them. Pay protection flowed from his contract. He had
received pay protection accordingly, between the beginning of 2010 and August
2010, notwithstanding re-banding having occurred at the start of the year. The
Claimant’s problem was simply his perceived entitlement of a continuation of
pay protection but it was an entitlement that he did not have.
37.
Mr Truscott referred to clause 21f. There was no proper basis on which the part of it that began “subject to…” could be ignored. The term
“Duration of post/placement” was straightforward. The sentence became more
difficult when the words “or within a rotation” were turned to since there was
no doubt that every post/placement would be within a rotation. However, if the
conditions to which the clause were subject were considered, such as 21h, it
was plain that it was not intended that pay protection would continue to apply
when a doctor began a new post. He was not seeking to disagree with the
Employment Judge’s analysis; there was, though, another way of looking at
matters and the answer was still the same – the Claimant was not entitled to
the pay protection he claimed. The fixed term contract for 2009/10 had
terminated. That being so, the Claimant had begun not only a new placement but
had entered a new post – albeit one involving the same job.
38.
Mr Truscott submitted that the Employment Judge’s analysis was well
reasoned and thoughtful. He was also correct about the practical consequences,
as discussed at paragraph 31. Banding was about payment for extra hours
and it could not be fair for the Claimant to continue to be paid for band 1B
hours when he was not working them in his third year.
Expenses
39.
Mr Truscott made a motion that in the event of the appeal being
dismissed, expenses be awarded to the Respondents. The appeal was misconceived
(EAT Rules 1993 as amended, rule 34A(1)). The Claimant’s
argument on appeal was based on a paragraph of the NHS Terms and Conditions
which was subject to other paragraphs but he had abandoned any submission that
they were relevant. The whole appeal was a misconception. The Claimant’s
argument that he was working under the contract for the year 2009/2010 ignored
the fact that that contract had an express termination date of 3 August 2010. Moreover, the appeal wholly lacked any analysis of the Employment Judge’s
reasoning and despite the assertion that his decision was perverse, did not
demonstrate how or why that was said to be so. There was no reference to any
authorities on perversity. The appeal was based on the Claimant’s own firm view
of his entitlement, nothing more. That was not a responsible basis on which to
have appealed.
40.
Mr Truscott indicated that the Respondent’s expenses which were mainly
counsel’s fees, would amount to about £5,000. They would be in a position to
lodge an account if required to do so.
41.
For the Claimant, Mr Morgan opposed the motion relating to expenses.
The appeal had not, he said, been misconceived. He had, he said, put forward a
strong argument, strenuously and properly.
Discussion and Decision
42.
There is no merit in this appeal. Mr Morgan’s submissions did not begin
to explain how the Employment Judge was said to have erred in law in the
interpretation of clause 21f which he reached after having heard evidence - on
matters which were wholly uncontested- regarding the relevant factual matrix.
As a matter of law, there are times that it is open to a judge interpreting a
contract to depart from the strict or literal wording. If Mr Morgan had read
on in the passage from Investors Compensation Scheme which
he read out when making his submissions, he would have seen that
Lord Hoffman added that the rule to which he was referring:
“...reflects the commonsense proposition that we do not easily
accept that people have made linguistic mistakes, particularly in formal
documents. On the other hand, if one would nevertheless conclude from the
background that something must have gone wrong with the language, the law does
not requires judges to attribute to the parties an intention which they plainly
could not have had. Lord Diplock made this point more vigorously when he said
in Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3All
ER 229 at 233, [1985] AC 191 at 201:
‘...if detailed semantic and syntactical analysis of words
in a commercial contract is going to lead to a conclusion that flouts business
common sense, it must be made to yield to business common sense.’”
43.
Here, on the facts, rotations contained posts and placements
(expressions which the Employment Judge found to have been used interchangeably
at times), there was plainly an intention (evident not only from the terms of 21f but also from the terms of 21h) that pay protection should not extend beyond a post or placement,
and to regard the words “or rotation” as allowing that to happen would have driven
a coach and four through that clear contractual intention. As a matter of law,
there is nothing wrong with the Employment Judge’s approach, given that factual
matrix.
44.
Turning to the argument that the Claimant remained in the same post, the
Employment Judge did not accept that that was, on a proper analysis of the
facts, correct, for the reasons which he thoughtfully and carefully explains.
Mr Morgan pointed to no proposition of law on this matter except, perhaps, his
statement that the Claimant had pay protection not from his contract but from
the NHS Terms and Conditions (which may have been an attempt to get around the
difficulty with which the fact of fresh yearly contracts faced him). As an
argument it does not, however, get off the ground. The pay protection
provisions of the NHS Terms and Conditions were expressly incorporated into the
Claimant’s contracts. As for the remarks that the Claimant thought he was
still working under the year 2 contract, I note that no such case is made out
in the Notice of Appeal and there are no findings in fact to that effect. More
importantly, even if he had thought that, it would not of itself, be
demonstrative of the Respondents having agreed, notwithstanding the express
terms of the year 2 contract, that it had not ended in August 2010 but had
continued to govern the parties’ relationship. There was no material either
before me or before the Tribunal indicative of any such approach on their part.
45.
I have, accordingly, no difficulty in accepting that nothing in Mr
Morgan’s submissions came close to demonstrating error of law on the part of
the Employment Judge.
46.
As to the matter of expenses, in these circumstances, I am readily
persuaded that the appeal was misconceived. Mr Truscott’s submissions were well
founded in that regard. It is, therefore, open to me to make an award of
expenses.
Disposal
47.
In these circumstances, I will pronounce an order dismissing the appeal
and ordering:
a) that the Respondents, within fourteen days
of the seal date hereof, lodge with this Tribunal and intimate to the Claimant
and his representative any account or schedule of expenses incurred on which
they wish to rely in support of their motion for expenses;
b) that
the Claimant, within fourteen days thereafter
i. lodge with this Tribunal and intimate to the
Respondents any written representations he seeks to make in respect of that
account or schedule; and
ii. if he wishes this Tribunal to have regard to
his means or ability to pay, an affidavit giving particulars accompanied by
copies of any documents on which he seeks to rely in that regard.
c) that
the Respondents, within fourteen days of any such affidavit, lodge with this
Tribunal and intimate to the Claimant any representations they seek to make in
respect of it or any documents accompanying it.
