At the Tribunal | |
On 26 February 2014 | |
Before
THE HONOURABLE MR JUSTICE WILKIE
(SITTING ALONE)
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR J N LEONARD (Representative) |
For the Respondent | MR M DUGGAN (of Counsel) Instructed by: London Borough of Bexley Legal Services Civic Offices Broadway Bexleyheath Kent DA6 7LB |
SUMMARY
UNLAWFUL DEDUCTION FROM WAGES
CONTRACT OF EMPLOYMENT – Incorporation into contract
The Employment Tribunal, in a sufficiently reasoned decision, was entitled on the evidence to conclude that:
(i) Payments made to the Appellant, between April 2007 and July 2011, for performing additional duties, were made under the Respondent's "honorarium" scheme.
(ii) They were discretionary payments, the power to pay which existed only for as long as those duties were additional duties.
(iii) That power ceased when, upon a restructuring, the Appellant was assimilated into a new role, which included these duties within the job description for her new role.
(iv) That new role was subject to a job evaluation arising from which the Appellant was entitled to be paid against the relevant pay grade.
(v) Thereafter, a decision by the Respondent to cease paying the honorarium payment did not amount to an unauthorised deduction from wages.
THE HONOURABLE MR JUSTICE WILKIE
Introduction
"in or about 2007, following discussions between the claimant and her manager, it was agreed between the parties that the respondent would pay to the claimant an additional sum to reflect increased duties and responsibilities. Pursuant to that agreement the claimants pay did increase in line with the indication made, … the payment has continued from 2007 until 31st October 2011.
Alternatively, a term to like effect is to be implied in the employment contract based on the conduct of the parties in and subsequent to April 2007."
Accordingly, she sought a determination of a reference, and a declaration, under sections 11(2) and 24 of the ERA 1996 that the complaint of unlawful deduction was well founded and that the Respondent pay the sums unlawfully deducted.
"These payments can be made where an employee undertakes the responsibilities of a higher grade post or undertakes more onerous duties. These are payments that are temporary in nature and maybe withdrawn at the discretion of the respondent. Such payments have never been incorporated as a permanent feature of a contract of employment for any of the respondent's employees. Rather, posts that change or evolve in time maybe be subject to a re-evaluation under the respondent's agreed job evaluation scheme. If this evaluation results in a higher grade then a new statement of particulars would be issued."
"The claimant was awarded an honorarium effective from 15th April 2007. This was awarded to reflect the fact that she had been asked to undertake other duties. This payment was made on a monthly basis and was always recorded as an honorarium on the claimant's pay slips."
The appeal
(1) A Council minute 7/90 was incorporated into staff contracts" (para 7 of the reasons).(2) The Claimant received an honorarium payment from effect from 1 April 2007 (para 8 of the reasons).
(3) The payment was awarded to the Claimant on the grounds that she had been asked by her manager, Mr Murphy to undertake additional duties related to home energy conservation (para 8 of the reasons).
(4) (a) The Claimant's role was the subject of a job evaluation and was evaluated at pay grade B9, and,
(b) this resulted in a change to the Claimant's job title and a revised job description (para 12 of the reasons).
(5) Mr Murphy concluded that the payment was a temporary payment paid at the Respondent's discretion and that it was now being paid in error (para 14 of the reasons).
(6) (a) There was no basis whatsoever for the Claimant to receive the payment after July 2011,
(b) Her duties were set out in the job description
(c) Those were the duties that the Claimant carried out(d) There was no evidence of additional duties outside the scope of that job (para 17 of the reasons).(7)(i) In referring to issues raised by the Claimant the Employment Tribunal found no merit in any of the following:(a) The Claimant was never told the payments were of a temporary nature(b) She was not informed of any review process.(ii) The Claimant knew the payment was an honorarium payment from the outset.(iii) That it depended upon "exceptional circumstances".(iv) That the Claimant could not have had a legitimate expectation of the payment continuing after those circumstances ceased to exist.(v) That there is a case for saying the Claimant should have queried the continued after her appointment to the new job in July 2011 (para 18 of the reasons)
The Employment Tribunal decision
- paragraph 5 briefly sets out her history with the Respondent, the positions she held, the dates she held them and the relevant pay grade (always B9);
- paragraph 6 refers to a decision of the Respondent's sub committee in July 1990 authorising payments of an honoraria in particular circumstances;
- paragraph 7 reads as follows:
"The respondent's conditions of service, which the Tribunal accepted applied to all members of staff, reads as follows:
'Under paragraph 35B of the conditions of service an honorarium may be paid when an officer undertakes part of the duties of a higher graded post for a continuous period of at least 4 weeks. Exceptionally an honorarium may be paid where there is no entitlement to a higher salary but where an officer performs duties outside the scope of his/her post over an extended period (i.e. at least 4 weeks) or where the duties and responsibilities involved are "exceptionally onerous.'"
- paragraph 8 recites that the Claimant received an honorarium payment from 1 April 2007, it records that it was awarded on the recommendation of her line manager on the grounds that she had been asked to undertake additional duties relating to home energy conservation previously undertaken by the home energy manager, who had recently left the authority and whose post had yet to be filled, the post of energy manager was pay grade B11, higher than the Claimant's B9 grade;
- paragraph 9 records that the honorarium was awarded under the authority of a letter from human resources dated 17 April 2007, it sets out that letter in full, it said the honorarium was to reflect the work she was doing to cover the energy manager post, it would cease when the energy manger post was recruited.
- paragraph 10 records a finding that the Claimant, in fact, never undertook any of the duties of the energy manager and that an assistant energy manager was appointed in August 2007 which meant that the work that the honorarium was intended to cover was undertaken by the person occupying that post;
- paragraph 11 records a finding that the honorarium continued to be paid because the Claimant's manager, Mr Murphy, considered that additional duties within the Claimant's responsibility merited the continued payment of the honorarium;
- paragraph 12 records a finding that in July 2011 the Claimant's department was subject to review and restructuring which resulted in a change in her being assimilated into a different role with a revised job description; and job title- Residential Services Manager, She was appointed to that role in July 2011. That job was evaluated at pay grade B9 – the same as her previous post.
- paragraph 13 records a finding as a fact that, although she was appointed to the newly evaluated role, the honorarium payment continued to be paid.
- paragraph 14 records a finding that, in May 2012, Mr Murphy, reviewing budgets, noted the Claimant was still being paid the honorarium; he concluded it was being paid in error and should be withdrawn, he confirmed this to the Claimant who raised objections which the Deputy Director, Mr Bryce Smith, considered, he concluded that the payment was a temporary payment paid at the Respondent's discretion, now being paid in error, and authorised the payment to be stopped with effect from 31 October 2012.
15 - 21.
"I find that the claimant had an entitlement to the honorarium payments from April 2007 – July 2011. Although Mr Murphy had to some extend misrepresented the position regarding the claimant undertaking the energy manager's duties, he nevertheless continued to authorise the payments because of the claimant's additional duties."
"Indeed there is a case for saying that the claimant should herself have queried the continued payment after her appointment to the new job in July 2011."
Ground 1 – The Meek point
"A decision of a tribunal must contain an outline of the story which has given rise to the complaint and a summary of the tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient accounts of the facts and of the reasoning to enable an appellate court to see whether any question of law arises."
Ground 2 – Did the tribunal err in law in concluding that, on the facts found, there was no contractual entitlement to an honorarium?
"I can find no basis for any contractual entitlement to the honorarium payments after July 2011."
"14. Kevin also indicated that this additional salary was intended to be a fix until my salary payment could be more permanently resolved … periodically I raised the issue with Kevin Murphy but the basic message was that it has never been the right time to raise my salary to a higher level."
"The honorarium continued to be paid as there were a number of important initiatives the claimant needed to be involved in including the loan scheme and the contact centre."
Those two additional duties were specifically mentioned by the Claimant in contemporaneous documentation (an email of 18 July 2012) and in a document which she prepared for the Tribunal identifying the additional responsibilities which she had undertaken.
Ground 3 - Perversity
"Such an appeal ought only to succeed where an overwhelming case is made out that the Employment Tribunal reached a decision which no reasonable Tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has "grave doubts" about the decision of the Employment Tribunal, it must proceed with great care."
Paragraph 7 of the decision does not contain such a finding. The Tribunal concluded that the conditions of service, within which paragraph 35B was included, applied to all members of staff. There is nothing perverse in that conclusion.
(2) The Claimant received an honorarium payment from effect from 1 April 2007 (para 8 of the reasons).The finding of fact in paragraph 8 that the Claimant received an honorarium payment with effect from 1 April 2007 was not perverse but accurate. The payment was said to be by way of honorarium and each payment was described as an honorarium. The Tribunal did not, thereby, pre-empt its consideration of the question whether, whatever it was called it, was in fact and law a contractual payment rather than a discretionary payment. It addressed that issue at paragraphs 15, 16 and 17 of the decision. The correctness of the conclusion to which the Tribunal came, as a matter of law, in those paragraphs is dealt with above.
(3) The payment was awarded to the Claimant on the grounds that she had been asked by her manager, Mr Murphy to undertake additional duties related to home energy conservation (para 8 of the reasons).The finding of fact in paragraph 8 - that it was awarded on the recommendation of Mr Murphy on the ground that she had been asked to undertake additional duties relating to home energy conservation previously undertaken by the energy manager - was, as a matter of fact, correct. It was common ground in the evidence that this was the reason that Mr Murphy put forward to human resources which resulted in their processing the honorarium payments in April 2007 and is reflected in the letter from HR to that effect. The Tribunal went on to make the findings in paragraphs 10 and 11 that, in fact, the Claimant never undertook any such duties and that the honorarium continued to be paid, authorised by Mr Murphy, on the basis that the additional duties, within the Claimant's responsibility, merited continued payment of the honorarium. It also found as a fact that Mr Murphy had, to an extent, misrepresented the situation (para 16). Thus the finding of fact said to be perverse in paragraph 8 was accurately made, based on the evidence and was not perverse.
(4) (a) The Claimant's role was the subject of a job evaluation and was evaluated at pay grade B9, and,
(b) this resulted in a change to the Claimant's job title and a revised job description (para 12 of the reasons).
The statements of fact in paragraph 12 of the reasons were accurate and based on the evidence. The Claimant raised an issue with the Respondent as to how the job evaluation had been conducted. This is recorded by the Tribunal in paragraph 18 of the decision. However, the Claimant had never asserted that any problems with the job evaluation were part of her Tribunal claim. On the contrary, she asserted, in her email of 22/10/12, that she maintained that her job had not been properly evaluated, but that was a red herring when addressing the true nature of the disputed payment. Thus, there was nothing perverse in the Tribunal's recording of the facts in paragraph 12 of the reasons.
(5) Mr Murphy concluded that the payment was a temporary payment paid at the Respondent's discretion and that it was now being paid in error (para 14 of the reasons).
The Tribunal's finding of fact in paragraph 14, in relation to the sequence of events in May 2012 and subsequent, which resulted in a decision made finally by Mr Bryce-Smith that the honorarium payments should cease, reflects the evidence given by Mr Murphy in paragraph 12 of his witness statement. The Claimant, at paragraph 29 of her witness statement, confirmed that Mr Murphy told her that the honorarium money was to be withdrawn. She records that as a result of a request from Mr Bryce-Smith. The question whether the initiative came from Mr Murphy or Mr Bryce-Smith was one upon which the evidence of the Claimant and Mr Murphy differed. The Tribunal, finding consistent with Mr Murphy's version, did so based on evidence. It is not, on any view, an issue of any significance. The important matter was that, ultimately, it was the decision of Mr Bryce-Smith to withdraw the honorarium following upon the Claimant raising objections and there being discussions about it, by email exchange and in meetings. The finding of fact is not perverse, and, even if it were wrong, it is not on a matter of any significance.
(6) (a) There was no basis whatsoever for the Claimant to receive the payment after July 2011,
(b) Her duties were set out in the job description
(c) Those were the duties that the Claimant carried out(d) There was no evidence of additional duties outside the scope of that job (para 17 of the reasons).Each of the statements set out in paragraph 17 was correct on the evidence before the Tribunal. The issue between the Claimant and the Respondent was that the "honorarium" payments had, from the outset, been contractual payments to which she was entitled for performing additional duties in the job she was then performing and that, as long as she continued to perform those duties, which she did, she was entitled to receive that payment, even after her job title and job description had changed. In that event she would, it was argued at the appeal, at least have been entitled to "payment protection" upon the re-evaluation of her duties arising from the restructuring, assimilation and re-evaluation exercise by virtue of contractual nature of the payments to which she had become entitled as a matter of contract. The Respondent's case was that the payment made, for additional duties performed, was an honorarium paid pursuant to the paragraph 35B scheme. It was discretionary and the power to pay it only continued for as long as those duties were performed as "additional" duties. Upon restructuring and assimilation into a different role and upon re-evaluation of that new job at the B9 grade, the honorarium scheme conditions no longer applied, so any entitlement or expectation to have a discretion exercised in her favour, under that scheme, ceased. As explained above, the issue whether her new job had been correctly evaluated at grade B9 to reflect her work was a different issue from the one the Tribunal was deciding and was accepted as such by the Claimant. The Claimant's case was never put on the basis that a fresh case for payment under the honorarium scheme had arisen in respect of her new role. Rather, her case was always about the status of the payments from April 2007. The findings in paragraph 17 were not perverse, given the Tribunal's conclusion that the payments made were under the honorarium scheme for the Claimant's additional duties from 2007 onwards.
(7) (i) In referring to issues raised by the Claimant the Employment Tribunal found no merit in any of the following:
(a) The Claimant was never told the payments were of a temporary nature(b) She was not informed of any review process.(ii) The Claimant knew the payment was an honorarium payment from the outset.(iii) That it depended upon "exceptional circumstances".(iv) That the Claimant could not have had a legitimate expectation of the payment continuing after those circumstances ceased to exist.(v) That there is a case for saying the Claimant should have queried the continued after her appointment to the new job in July 2011 (para 18 of the reasons)
a. that the Appellant was never told the payments were of a temporary nature or,b. that it was subject to review or,
c. that she knew that it was an honorarium payment from the outset which,
d. depended on "exceptional circumstances" and,
e. that she had no legitimate expectation that it would continue after those circumstances ceased to exist.
a. On her own evidence she knew from the outset that the payment was a "fix" until her salary payment could be more permanently resolved, but it was never the right time to do so. In March 2011 when the question of stopping the payment arose, her evidence was that Mr Murphy said she should have enjoyed it while it lasted and accept that it was going.b. She was aware of the process of restructuring and had discussed with Mr Bryce- Smith the fact that it may be that her increased responsibilities would be reflected in the grading to be applied at the end of that process. In addition, as the Tribunal found on the evidence, once that restructuring, assimilation and recasting of her job description had been completed, her entire role was governed by the new job description which had been evaluated at grade B9. Whilst the Appellant had criticisms of that outcome, her case was that the quality of the job evaluation was a red herring; the issue was the legal nature of the "honorarium" payments from 2007.c. and d. The findings of fact that the payments were made under the honorarium scheme, depended on exceptional circumstances - performing additional duties - and,e. she had no legitimate expectation that they would continue when those circumstances ceased, were, each of them, conclusions to which the Tribunal was entitled to come on the evidence.
Conclusion