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United Kingdom House of Lords Decisions

You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Miles v Wakefield Metropolitan District Council [1987] UKHL 15 (12 March 1987)
URL: http://www.bailii.org/uk/cases/UKHL/1987/15.html
Cite as: [1987] ICR 368, [1987] AC 539, [1987] 2 WLR 795, [1987] UKHL 15, [1987] 1 FTLR 533, [1987] 1 All ER 1089, [1987] IRLR 193
[New search] [Buy ICLR report: [1987] AC 539] [Buy ICLR report: [1987] ICR 368] [Buy ICLR report: [1987] 2 WLR 795] [Help]
Judgment: 12,3.87
HOUSE OF LORDS
MILES
(RESPONDENT)
v.
WAKEFIELD METROPOLITAN DISTRICT COUNCIL
(APPELLANTS)
Lord Bridge
of Harwich
Lord Brandon
of Oakbrook
Lord Bright man
Lord Templeman
Lord Oliver
of Aylmerton
LORD BRIDGE OF HARWICH
My Lords,
I have had the advantage of reading in draft the speeches
of my noble and learned friends Lord Templeman and Lord Oliver
of Aylmerton. I agree, for the reasons they give, that the salary
payable to the respondent ("the plaintiff") by the appellants ("the
council") was not an honorarium for the mere tenure of an office
but had the character of remuneration for work done. The salary
was paid for a working week of 37 hours. The more difficult
question at the heart of this appeal is whether the council were
entitled, in the circumstances, to deduct and withhold a proportion
of the weekly salary corresponding to the three hours of work
required to be done on Saturday mornings during the weeks when
the plaintiff was refusing to perform his duty of celebrating
marriages on Saturdays. This depends, in turn, on whether in the
like circumstances, if there had been a straightforward contract of
employment, the employers would have the right to make such a
deduction independently of any set-off of damages for breach of
contract. By their letter of 8 October 1981 the council made
clear that the partial and imperfect performance of his Saturday
duties which the plaintiff was willing to undertake was not
acceptable. If he was not prepared to celebrate marriages on
Saturdays, which was part of the duty required by his terms of
service, he was not to attend at his office and would not be paid
if he did. I regard this attitude manifested by the council as a
central feature in the dispute, which serves to narrow and define
the question of law falling for decision. If an employee refuses to
perform the full duties which can be required of him under his
contract of service, the employer is entitled to refuse to accept
any partial performance. The position then resulting, during any
relevant period while these conditions obtain, is exactly as if the
employee were refusing to work at all. It follows that the central
question of law can be stated thus: if an employee, entitled to a
- 1 -
weekly salary for a working week of a defined number of hours
refuses to work for the whole or part of a week, is the employer
entitled, without terminating the contract of employment and
without relying on any right to damages for breach of contract, to
withhold the whole or a proportion of part of the week's salary?
My Lords, the penetrating analysis of the authorities
undertaken by my noble and learned friend Lord Oliver of
Aylmerton and the reasoning he bases on that analysis seem to me
to lead convincingly to an affirmative answer to this question. I
do not believe that any wider question relating to the effect on
contractual rights and obligations of industrial action designed to
put pressure on employers falls for consideration. Industrial action
can take many different forms and there are a variety of options
open to an employer confronted by such action. In particular 1
should, for my part, have preferred to express no opinion on
questions arising in the case of an employee who deliberately "goes
slow" or otherwise does his work in a less than satisfactory way,
when the employer nevertheless acquiesces in his continuing to
work the full number of hours required under his contract. There
may be no single, simple principle which can be applied in such
cases irrespective of differences in circumstances. But I find it
difficult to understand the basis on which, in such a case, the
employee in place of remuneration at the contractual rate would
become entitled to a quantum meruit. This would presuppose that
the original contract of employment had in some way been
superseded by a new agreement by which the employee undertook
to work as requested by the employer for remuneration in a
reasonable sum. This seems to me to be contrary to the realities
of the situation.
I would allow the appeal
LORD BRANDON OF OAKBROOK
My Lords,
I have had the advantage of reading in draft the speeches
prepared by my noble and learned friends, Lord Templeman and
Lord Oliver of Aylmerton. I agree that for the reasons which
they give the appeal should be allowed. Like my noble and
learned friend, Lord Oliver of Aylmerton, however, I should prefer
to reserve my opinion on the question whether an employee
engaged in certain kinds of industrial action may be entitled to
claim remuneration on a quantum meruit basis for work actually
done.
LORD BRIGHTMAN
My Lords,
For the reasons so convincingly expressed by my noble and
learned friends Lord Templeman and Lord Oliver of Aylmerton in
- 2 -
their speeches, which I have had the privilege of reading in draft,
I agree that the plaintiff's action was rightly dismissed by the
trial judge. It was rightly dismissed because in an action by an
employee to recover his pay it must be proved or admitted that
the employee worked or was willing to work in accordance with
his contract of employment, or that such service as was given by
the employee, if falling short of his contractual obligations, was
accepted by the employer as a sufficient performance of his
contract. I leave out of account a failure to work or work
efficiently as a result of illness or other unavoidable impediment,
to which special considerations apply.
If an employee offers partial performance, as he does in
some types of industrial conflict falling short of a strike, the
employer has a choice. He may decline to accept the partial
performance that is offered, in which case the employee is
entitled to no remuneration for his unwanted services, even if they
are performed. That is the instant case. Or the employer may
accept the partial performance. If he accepts the partial
performance as if it were performance which satisfied the terms
of the contract, the employer must pay the full wage for the
period of the partial performance because he will have precluded
or estopped himself from asserting that the performance was not
that which the contract required. But what is the position if the
employee offers partial performance and the employer, usually of
necessity, accepts such partial performance, the deficient work
being understood by the employer and intended by the employee to
fall short of the contractual requirements and being accepted by
the employer as such? There are, as it seems to me, two possible
answers. One possible answer is that the employer must pay the
full wage but may recover by action or counterclaim or set-off
damages for breach of contract. The other possible answer is that
the employee is only entitled to so much remuneration as
represents the value of the work he has done, i.e. quantum meruit.
My noble and learned friend Lord Templeman prefers the latter
solution, and so do I. My reason is this. One has to start with
the assumption that the employee sues for his pay; the employer is
only bound to pay the employee that which the employee can
recover by action. The employee cannot recover his contractual
wages because he cannot prove that he has performed or ever
intended to perform his contractual obligations. If wages and work
are interdependent, it is difficult to suppose that an employee who
has voluntarily declined to perform his contractual work can claim
his contractual wages. The employee offers partial performance
with the object of inflicting the maximum damage on the employer
at the minimum inconvenience to himself. If, in breach of his
contract, an employee works with the object of harming his
employer, he can hardly claim that he is working under his
contract and is therefore entitled to his contractual wages. But
nevertheless in the case supposed the employee has provided some
services, albeit less than the contract required, and the employer
has received those (non-contractual) services; therefore the
employer must clearly pay something - not the contractual wages
because the contractual work has deliberately not been performed.
What can he recover? Surely the value of the services which he
gave and which the employer received, i.e. quantum meruit.
My Lords, some of my conclusions travel outside the ambit
of this case. The fact that they are obiter does not deter me
. 3 .
from expressing them. I express my thoughts in the hope that
they may, perhaps, be of some assistance to those who seek a
correct approach to the rights of the parties in the common case
of industrial action which falls short of a withdrawal of labour.
My Lords, I would allow this appeal.
LORD TEMPLEMAN
My Lords,
The respondent plaintiff, is the superintendent registrar of
births, deaths and marriages for the district of Wakefield. The
plaintiff was appointed by the appellant defendants, Wakefield
Metropolitan District Council. The plaintiff is paid a salary by
the council, and he works a 37-hour week. One of the most
important functions of the plaintiff as superintendent registrar is
to conduct civil wedding ceremonies, and the most popular time
for such weddings is Saturday morning when the registry office
provided by the council is open for three hours between nine
o'clock and midday. On instructions from his trade union,
N.A.L.G.O., the plaintiff by way of industrial action, refused to
conduct weddings on Saturday morning. The object of the union
was, by inconveniencing the public, to obtain publicity and support
for the campaign conducted by the union in the interests of its
members for a higher scale of salary to be paid to superintendent
registrars. The plaintiff remained willing to work a 37-hour week
and to work on Saturday but he refused to conduct weddings on
Saturday. By a letter dated 8 October 1981, the council:
"made it clear to the registration officers that whilst ever
they are not prepared to undertake the full range of their
duties on Saturdays they are not required to attend for work
and accordingly will not be paid. If the registrars attend at
their offices on Saturdays that is entirely a matter for
them."
Thus the council treated the plaintiff as being under a duty to
work three out of his 37 hours on Saturday morning for the
purpose of conducting weddings if required. The plaintiff refused
to conduct weddings on Saturday and the council treated him as
working for only 34 hours. In refusing to conduct weddings on
Saturday, the plaintiff, as he now frankly concedes, acted in
breach of his duties as superintendent registrar. The council
deducted three-thirty-sevenths of the salary of the plaintiff while
he remained unwilling to conduct weddings on Saturday, between
August 1981 and October 1982, when the salary dispute was
settled. The plaintiff now seeks payment of the sums deducted,
amounting to £77<+. Nicholls 3. decided against the plaintiff. The
Court of Appeal by a majority (Parker and Fox L.33.) held that
the plaintiff was entitled to be paid his full salary unless and until
he was dismissed. Eveleigh L.3., dissenting, agreed with Nicholls
3. that the plaintiff was not entitled to be paid for the time he
refused to work in accordance with his duties. The council now
appeal with the leave of the House.
- 4 -
The rights and obligations of the plaintiff derive from the
Registration Service Act 1953. The question is whether upon the
true construction of the Act of 1953 and the terms of the
appointment of the plaintiff, he was entitled to be paid for a
Saturday morning when in pursuit of industrial action he was not
willing to work normally.
By section 45 of the Marriage Act 1949:
"(1) Where a marriage is intended to be solemnized on the
authority of a certificate of a superintendent registrar, the
persons to be married may state in the notice of marriage
that they wish to be married in the office of the
superintendent registrar ... to whom notice of marriage is
given, and where any such notice has been given . . . the
marriage may be solemnized in the said office, with open
doors, in the presence of the superintendent registrar . . .
and in the presence of two witnesses . . ."
Section 1 of the Act of 1953 created the office of
Registrar General for the purposes of the Act of 1949 and the
Births and Deaths Registration Act 1953 which regulate the
reporting and registration of births and deaths and the conduct and
registration of civil marriages. Section 5 of the Act of 1953, as
amended by the Local Government Act 1972, created the office of
superintendent registrar of births, deaths and marriages for every
registration district consisting of or comprised in a non-
metropolitan county or metropolitan district. The Act of 1953, as
amended, and so far as material for present purposes, also
provided:
"6(1) Every superintendent registrar . . . shall be appointed
by the council of the non-metropolitan county or
metropolitan district in which his district ... is situated . .
it
Pursuant to this provision, the council appointed the plaintiff to be
the superintendent registrar for the district of Wakefield.
"6(3) Every superintendent registrar . . . shall be a salaried
officer paid by the council. ... (4) Every superintendent
registrar . . . shall hold office during the pleasure of the
Registrar General."
Thus the plaintiff is paid by the council but can only be dismissed
by the Registrar General.
"13(1) There shall be in force for each non-metropolitan county and metropolitan district a scheme or schemes (in
this Act referred to as 'the local scheme') .... (2)
Provision shall be made by the local scheme for - . . . (e)
fixing . . . the salary and other remuneration, if any, to be
attached to each office . . . ; (f) fixing . . . the conditions
on which an office is to be held, so, however, that nothing
in the scheme shall affect the power of the Registrar
General to remove from office an officer in any case in
which the Registrar General is satisfied that the officer has
been guilty of serious default in the performance of the
duties imposed on him by the Registration Acts or any
regulations made thereunder;"                                                                                 
- 5 -
The plaintiff was a competent and conscientious officer and the
Registrar General did not exercise his power of removal when the
plaintiff, under instructions from his union and no doubt in
agreement with the view that superintendent registrars were
underpaid, took industrial action by declining to conduct weddings
on Saturday.
"(g) applying with any necessary modifications,
adaptation and exceptions the provisions of the
Local Government Act 1929 relating to the
transfer, superannuation and compensation of
officers;"
These officers were in the main employed by local authorities
under contracts of employment.
"(h) conferring on the [proper officer appointed
by the council for the purposes of the Act]
powers with respect to - (i) the fixing of the
hours of attendance of officers; (ii) the
distribution of business between officers; . . ."
Section 13(3) authorised the local scheme to:
"(b) confer on the [proper officer] such general
powers of supervising the administration within
the [county or district] of the provisions of the
Registration Acts as may be specified in the
scheme."
Section 1^ directed that the local scheme be prepared by
each council and approved by the Minister of Health, now the
Secretary of State for Social Services.
The Wakefield registration scheme, duly made by the council
and approved by the Minister, assimilated a superintendent
registrar with an appropriate local government officer in relation
to salary scales, overtime pay, sick leave, travel expenses,
superannuation and other matters. Under the Wakefield scheme,
the plaintiff became entitled to a fixed salary and became bound
to work a 37-hour week. Thus the position of the plaintiff was in
many respects similar to the position of an employee. He was
appointed by the council and paid a salary by the council out of
public money, for a fixed number of hours of work, and he worked
on council premises for the benefit of the public. The main
differences between the position of the plaintiff and the position
of an employee of the council were that the plaintiff could only
be dismissed by the Registrar General and that the plaintiff
performed tasks which were imposed by the central government in
the interests of the nation generally.
Mr. Sedley, who appeared for the plaintiff, submitted and
the majority of the Court of Appeal accepted that significance
was to be attached to the fact that the plaintiff was not a
servant under a contract of employment but the holder of an
office. In the olden days satirised by Dickens and Thackeray a
gentleman appointed to an office, for example, in the Chancery
Registry or in the Department of Circumlocution and Sealing Wax,
- 6 -
carried out his ill-defined duties at his leisure and pleasure.
Trollope explained that a special Act of Parliament was necessary
in order to control the functions and the stipend of the holder of
the office of Warden of Hiram's Hospital. It is unusual for the
holder of an office to take industrial action and the consequences
will depend on the rights and obligations conferred and imposed on
the office-holder by the terms of his appointment. But if an
ambassador and the embassy porter were both on strike then I
would expect both to be liable to lose or both to be entitled to
claim their apportioned remuneration attributable to the period of
the strike. A judge and an usher on strike should arguably be
treated in the same manner. The ambassador might be required to
decode a declaration of war on Sunday, and a judge might devote
his Christmas holidays to the elucidation of legal problems arising
from industrial action, so that it would be necessary to divide
their annual salaries by 365 to define a daily rate applicable to
the period of strike, whereas the weekly, daily or hourly wages of
the porter and the usher provide a different basis for
apportionment, but in principle it is difficult to see why there
should be any difference in treatment. To decide this appeal it
suffices that there is no logical distinction between a
superintendent registrar who is paid a weekly salary for a 37-hour
week and a municipal dustman who is paid a weekly wage for a
37-hour week if both are on strike, both are supported by their
unions and both claim from the council payment in full of their
salary and wages for the duration of the strike. Middle class
morality must not be allowed to place Mr. Dolittle in an inferior
position in this respect.
Mr Sedley contended that the power to dismiss a
superintendent registrar conferred on the Registrar General was a
penalty and the only penalty which could be inflicted on a
superintendent registrar if he committed a breach of his duties.
In my opinion this power was only intended to deal with
trangressions which in the opinion of the Registrar General
rendered a superintendent registrar unfit to continue in office. It
does not follow that all other breaches of duty can be committed
with impunity.
The Act of 1953 and the local scheme do not expressly
authorise a deduction from the salary of a superintendent registrar
if he declines to carry out his duties. It does not follow that the
legislature intended to confer on a superintendent registrar the
right to be paid if he declines to work. The Act of 1953 does not
state the obvious, namely, that a superintendent registrar may be
removed from office if he is guilty of serious default in the
performance of his duties. The Act states that which would
otherwise not be obvious, namely, that the power of removal shall
be exercisable by the Registrar General and not by the council. It
does not follow that the legislature intended to impose on the
council the obligation to pay a superintendent registrar for doing
nothing. If the plaintiff worked more than 37 hours in a week he
was entitled to overtime pay in accordance with the provisions
regarding overtime contained or incorporated in the local scheme.
The council say that if the plaintiff in breach of duty worked less
than 37 hours he is only entitled to be paid for his hours of work.
Mr. Sedley said that by the Act of 1953 the council were
bound to pay the salary of the plaintiff; the council were not
- 7 -
concerned to see whether the plaintiff gave value for money and
were not entitled to benefit from the plaintiff's breach of duty by
retaining any part of his salary. These submissions ignore the fact
that the council is a public authority paying out public money for
the purpose of securing a public service from a public official.
The result of the local scheme and the appointment of the
plaintiff was that the council promised to pay the plaintiff his
weekly salary determined from time to time under the scheme and
the plaintiff promised to devote 37 hours each week to the due
performance of his duties.
Next, Mr. Sedley submitted that the plaintiff was entitled to
be paid for 37 hours if he carried out his duties as a
superintendent registrar (other than his marriage service duties) for
three hours on Saturday and carried out all his duties as a
superintendent registrar for 34 hours between Monday and Friday.
Alternatively, the plaintiff was entitled to be paid for 37 hours if
he carried out his duties for 37 hours between Monday and Friday.
But the plaintiff refused to conduct marriage services on Saturday
because he knew that it was his duty to conduct marriage services
on Saturday and that his refusal would cause serious inconvenience
to the public he was paid to serve. The plaintiff could not
perform his Saturday duty of conducting marriage ceremonies by
carrying out other tasks of a superintendent registrar on that day.
Nor could the plaintiff perform his Saturday duty of conducting
marriage ceremonies on that day by conducting marriage
ceremonies on other days and by working for 37 hours between
Monday and Friday. Between Monday and Friday the plaintiff was
only entitled to work 34 hours. On Saturday the plaintiff was
entitled to work for three hours but only if he was willing to
conduct marriage ceremonies.
Parker L.J. was impressed by the fact that under the Act
of 1953 an additional registrar is paid by fees and certain
superintendent registrars may elect to be paid by fees. Parker
L.J. appears to have assumed that the council were bound to
acquiesce in industrial action by a registrar paid by fees and were
therefore bound to acquiesce in industrial action by a registrar
paid by salary. But if a registrar paid by fees declines to work
on Saturday, he receives no remuneration for that day. The
plaintiff declined to work efficiently on Saturday but claims his
full remuneration attributable to that day. A registrar cannot be
compelled to work but the present dispute concerns the question as
to whether a registrar on strike is entitled to be paid without
working. By their letter dated 8 October 1981, the council made
it clear that a registrar would not be paid for work on Saturday
unless he was prepared to undertake the full range of his
duties.Eveleigh L.J. rightly summed up the position of the plaintiff
as follows [1985] 1 W.L.R. 822, 838, 839:
"the local scheme indicates that a superintendent registrar's
salary is like most other salaries payable for work which he
is required to do according to the terms of his appointment
.... the local scheme is to the effect that the salary is
payable in respect of services rendered and I see nothing in
this case to show that the council is required to pay when
services were not rendered."
- 8 -
If the plaintiff is is no better position for present purposes
than a worker under a contract of employment, he is no worse
position. Mr. Sedley submitted that unless and until an employer
puts an end to a contract of employment by dismissing the worker,
the employer must pay the worker his full contractual wages even
though the worker is on strike. The plaintiff was not dismissed
and was therefore entitled to his full salary.
My Lords, industrial action involves a worker, in conjunction
with all or some of his fellow workers, declining to work or
declining to work efficiently in each case with the object of
harming the employer so that the employer will feel obliged to
increase wages or improve conditions of work or meet the other
requirements put forward by the workers' representatives. The
form of industrial action which consists of declining to work is a
strike. The form of industrial action which consists of declining
to work efficiently has many manifestations including the "go slow"
and the refusal by the plaintiff to carry out some of his functions
on Saturday. In essence, the plaintiff was employed by the public
and his industrial action took the form of declining to work
efficiently on Saturday with the object of inconveniencing the
public and advancing the claim of his union for higher salaries.
Industrial action is an effective method of enhancing the
bargaining power of the workers' representatives. The courts are
not competent to determine and are not concerned to determine
whether a strike or other form of industrial action is justified or
malicious, wise or foolish, provoked or exploited, beneficial or
damaging; history has proved that any such determination is
speculative and liable to be unsound. Any form of industrial
action by a worker is a breach of contract which entitled the
employer at common law to dismiss the worker because no
employer is contractually bound to retain a worker who is
intentionally causing harm to the employer's business.
The Employment Protection (Consolidation) Act 1978
provides that a worker who is lawfully dismissed shall nevertheless
be entitled to prove to an industrial tribunal that he has been
unfairly dismissed and is entitled to reinstatement or compensation.
An individual worker is unfairly dismissed if the only reason for
his dismissal is that he has taken part in industrial action unless
all workers who take part are also dismissed. In practice, the Act
protects a worker against losing his job as a direct consequence of
his industrial action unless the employer goes out of business or is
able to engage a wholly new and different work force. The
legislation does not protect the worker against losing his wages
during a period of industrial action. If the worker were protected
against losing both his job and his wages, nearly every threat of
industrial action would result in the capitulation of the employer.
As a result of the Act, there is little point in an employer
dismissing a worker who is engaged in industrial action which is
expected to end in a negotiated settlement. If Mr. Sedley is
right, however, the worker engaged in industrial action is entitled
to his wages unless and until the employer serves a formal notice
of dismissal which in the vast majority of cases will never affect
the worker. Mr. Sedley concedes that a worker is not entitled to
his wages if the employer serves formal notice of dismissal. Mr.
Sedley, in effect, denies the right of the employer to say,
expressly or by implication, to the worker engaged in industrial
action: "I have no present intention of dismissing you but I will
- 9 -
only pay you wages if you work." A worker who is on strike (as
opposed to a worker who is locked out) does not usually line up
for his pay packet on pay day during a strike. The worker thus
recognises and accepts that whether or not he is dismissed for
industrial action, he is not entitled to be paid if he declines to
work. The worker hopes that the damage inflicted on or feared
by the employer by industrial action will drive the employer to the
bargaining table before the loss of wages suffered by the worker
drives him back to work. In the present case the council
refrained from calling upon the Registrar General to dismiss the
plaintiff but by their letter dated 10 October 1981 announced that
they would only pay for normal work. According to Mr. Sediey,
the law of contract is so formalistic and inflexible that an
employer may not keep a worker in his employ and refuse to pay
him while he is engaged in industrial action. The employer must
either dismiss the worker or pay him in full. Mr. Sediey
submitted that where a worker under a contract of employment
commits a breach of contract by declining to work, the remedies
of the employer are rescission and damages. The employer may
treat the conduct of the worker as repudiation of the contract and
may accept the repudiation; in plain language, the employer may
dismiss the worker. The employer will then cease to be liable to
pay wages and may sue the worker for any additional damages
caused by the breach of contract. Alternatively, the employer
may treat the contract as still subsisting; in that case the
employer will be bound to pay the worker his full wages but may
then sue the worker for unliquidated damages caused by the breach
of contract. The same choice between dismissal and payment
confronts an employer where the worker takes industrial action in
the form of declining to work efficiently. The plaintiff has not
been dismissed; the council must pay his full salary, and the
council can then sue the plaintiff for damages But then,
according to Mr. Sediey, the council have suffered no damages and
will not be able to recover any damages from the plaintiff; the
only effect of the refusal of the plaintiff to conduct wedding
ceremonies on Saturday was that members of the public who
wished to be married on that day at the Wakefield District
Registry were disappointed. If Mr. Sediey is right, the difficulty
about damages applies to most forms of industrial action, so that
in effect an employer must either dismiss a worker or pay his full
wages albeit that the worker is either idle or is working in a
manner calculated to harm the employer. A strike may involve
the employer in a loss of profits but it is impossible to show that
any particular proportion of the loss is attributable to the
industrial action of any individual worker. If a chauffeur goes on
strike for one day, his employer may only suffer the inconvenience
or enjoyment of driving his own car for once. My Lords, an
employer always suffers damage from the industrial action of an
individual worker. The employer suffers the loss of the services
of the worker. The value of those services to the employer
cannot be less than the salary payable for those services,
otherwise most employers would become insolvent.
In the present case, if the council were obliged to pay for
the services of the plaintiff on Saturday morning, the council
would suffer the loss of the money thus paid for services to the
public which the plaintiff declined to perform. A man who pays
something for nothing truly incurs a loss. The value of the lost
services cannot be less than the value attributable to the lost
- 10 -
hours of work. Indeed, the plaintiff embarked on industrial action
because his union believed that the value of his services exceeded
his current salary.
Mr. Sedley's next contention is that unless a worker is
dimissed he is nevertheless entitled to his full wages on the due
date in each week, although the employer can recover damages in
proceedings which will eventually result in a judgment. But if the
damages suffered by the employer are the wages for the lost
hours, it would be purposeless to require the employer to pay the
wages and then to recover a like amount by way of damages. If
10,000 workers earn £100 a week and go on strike for a week, no
logical system of law will compel the employer to pay out Elm.
at the end of the week, and then to issue 10,000 writs against
10,000 defendants to recover £100 from each.
For the past two years teachers have been engaged in
sporadic strike action, usually on one day in a week. If Mr.
Sedley is right, educational authorities must pay for strike days
unless after each day's strike they issue dismissal notices. To
show that the educational authorities have no intention of ruining
the educational system by insisting on dismissal, the dismissal
notice must presumably be accompanied by a reinstatement
notice. This would finally submerge the teaching profession in
paper.
The consequences of Mr. Sedley's submissions demonstrate
that his analysis of a contract of employment is deficient. It
cannot be right that an employer should be compelled to pay
something for nothing whether he dismisses or retains a worker.
In a contract of employment wages and work go together. The
employer pays for work and the worker works for his wages. If
the employer declines to pay, the worker need not work. If the
worker declines to work, the employer need not pay. In an action
by a worker to recover his pay he must allege and be ready to
prove that he worked or was willing to work. Different
considerations apply to a failure to work by sickness or other
circumstances which may be governed by express or implied terms
or by custom. In the present case the plaintiff disentitled himself
for his salary for Saturday morning because he declined to work on
Saturday morning in accordance with his duty.
Where industrial action takes the form of working
inefficiently, the employer may decline to accept any work and
the worker will not then be entitled to wages.
I agree with my noble and learned friend Lord Bridge of
Harwich that industrial action can take many forms and that the
legal consequences of industrial action will depend on the rights
and obligations of the worker, the effect of the industrial action
on the employer and the response of the employer. For my part
however I take the provisional view that on principle a worker
who, in conjunction with his fellow workers declines to work
efficiently with the object of harming his employer is no more
entitled to his wages under the contract than if he declined to
work at all. The worker whose industrial action takes the form of
'going slow' inflicts intended damage which may be incalculable
and non-apportionable but the employer, in order to avoid greater
damage, is obliged to accept the reduced work the worker is
- 11 -
willing to perform. In those circumstances, the worker cannot
claim that he is entitled to his wages under the contract because
he is deliberately working in a manner designed to harm the
employer. But the worker will be entitled to be paid on a
quantum meruit basis for the amount and value of the reduced
work performed and accepted. In the present case, the council by
their letter dated 18 October 1981 refused to accept any work
from the plaintiff unless he worked normally and discharged all his
duties. The plaintiff offered to work inefficiently on Saturday but
could not compel the council to accept that offer, and upon their
refusal to accept that offer, he ceased to be entitled to be paid
for Saturday. My present view is that a worker who embarks on
any form of industrial action designed to harm his employer gives
up his right to wages under his contract of employment, in the
hope that the industrial action will be successful in procuring
higher wages in the future, and possibly in the hope that
negotiations which end the industrial dispute will provide for some
payment for the period of the industrial action.
Industrial action is largely a 20th century development
introduced with success by the Bermondsey matchworkers at about
the turn of the century. Industrial action is unique in that in
order to be effective the action must involve a repudiatory breach
of contract designed to harm the employer. Most of the 50-odd
authorities cited in the course of this appeal were ancient and
irrelevant. There are, however, some authorities which concern or
have some relevance to claims and defences arising out of
industrial action.
The authorities disclose that a breach of some contracts
affords the injured party the remedy of abatement, and that in
many other circumstances a right to damages may be set off
against a duty to pay.
The remedy of abatement applies to a contract for goods
where the vendor agrees to supply 15 bottles of wine for £30 and
only supplies 12 bottles. In that case the purchaser is entitled to
pay £24 for the bottles received. That principle is apt to apply
equally to a contract of employment where the worker agrees to
work for 15 hours for £30 and only works for 12 hours so that the
employer is entitled to pay £24 for the hours worked.
In Mondel v. Steel (1841) 8 M. <5c W. 858, 871-872, Parke B.
said:
"all these cases of goods sold and delivered with a warranty,
and work and labour, as well as the case of goods agreed to
be supplied according to a contract ... it is competent for
the defendant, in all of those, not to set off, by a
proceeding in the nature of a cross-action, the amount of
damages which he has sustained by breach of the contract,
but simply to defend himself by showing how much less the
subject matter of the action was worth, by reason of the
breach of contract; and to the extent that he obtains, or is
capable of obtaining, an abatement of price on that account,
he must be considered as having received satisfaction for
the breach of contract ..."
- 12 -
In Hanley v. Pease & Partners Ltd. [1915] 1 K.B. 698, where
a worker absented himself without leave for one day, the employer
suspended him from work the following day, and, as the worker
was ready and willing to work on the following day, he was held
entitled to be paid for the following day. It does not appear that
the worker was paid for the day's absence when he was not ready
and willing to work or that he claimed for that day's pay.
In National Coal Board v. Galley [1958] 1 W.L.R. 16,
workers in an industrial dispute refused to work on Saturday. The
board suffered a loss of profit due to the impossibility of working
the Saturday shift. The board were not entitled, as against each
worker, to recover a proportion of the loss of profit. Pearce L.J.
delivering the judgment of the court said, at p. 29: "we do not
think it can be said that any damage has been proved against him
beyond the cost of a substitute, say £3 18s.2d." The cost of a
substitute will not be less than the value placed by the contract
on the services of the worker.
In Hanak v. Green [1958] 2 Q.B. 9, 18, Morris L.3. in a
judgment approved by Lord Diplock in Modern Engineering (Bristol)
Ltd. v. Gilbert-Ash (Northern) Ltd. [1974J A.C. 689, 717, referred
to the right of equitable set-off by a defendant who possessed a
liquidated or unliquidated claim arising out of the same contract,
citing, as an example, at p. 20, Morgan & Son Ltd. v. S. Martin
Johnson & Co. Ltd. [1949] 1 K.B. 107. In that case the plaintiffs
claimed a sum payable for storing the defendants' vehicles, and
the defendants were held to be entitled to plead an equitable set-
off in respect of damages for one of the vehicles which had been
stolen as a result of the negligence of the plaintiffs.
In Modern Engineering (Bristol) Ltd. v. Gilbert-Ash
(Northern) Ltd., at p. 717, Lord Diplock said that the remedy of
abatement:
"is a remedy which the common law provides for breaches
of warranty in contracts for sale of goods and for work and
labour. It is restricted to contracts of these types ....
It is independent of the doctrine of 'equitable set-off
developed by the Court of Chancery to afford such relief in
appropriate cases to parties to other types of contracts . .
ii
In McClenaghan v. Bank of New Zealand [1978] 2 N.Z.L.R.
529, Chilwell 1. held that bank employers were in breach of the
New Zealand Wages Protection Act 1964 which provided by section
4(1): "the entire amount of wages payable to any worker shall be
paid to the worker in money when they become payable."
The bank employees went on strike for two days. The bank
employers deducted two subsequent days* pay and were held to be
in breach of the Act of 1964. Chilwell J. said, at p. 536, that
the employer banks had a claim for damages for breach and if the
Act had not stood in the way they would have had a set-off for
those damages but that the banks had not sought damages nor an
amendment to the pleadings to let it in, nor had they established
any damage. The learned judge remarked that to work 12 days
out of 14 was substantial performance if the contract were
regarded as entire. But delivery of 12 bottles out of 14, though
- 13 -
in some respects substantial performance, does not oblige the
purchaser to pay for the two missing bottles.
In an unreported decision of Lord Cowie in the Outer House
of the Court of Session, Laurie v. British Steel Corporation, 23
February 197S, workers took industrial action by declining to work
normally. They were suspended, their wages were not paid during
the period of suspension, and Lord Cowie held that they were not
entitled to recover the amounts deducted. It was argued that the
only remedies of British Steel were to rescind the contract, with
or without a claim for damages, or simply to claim damages which
they had not proved. Lord Cowie held that a contract of
employment gave rise to mutual obligations, and that if one party
failed to fulfil his obligations, he could not call on the other party
to fulfil his.
In Henthorn v. Central Electricity Generating Board [1980]
I.R.L.R. 361, workmen employed by the C.E.G.B. took part in an
unofficial "work to rule." The C.E.G.B. were of the opinion that
the workmen were not performing their contracts of employment
and refused to pay the men for the days on which they were
working to rule. Lawton L.3., with whose judgment Bridge and
Shaw L.33. agreed, held that in order to recover, the workmen
must allege and prove that they were ready and willing to perform
their part under the contract of employment.
*n Welbourn v. Australian Postal Commission [1984] V.R.
257, postal workers refused to perform certain work which had
been banned by their union. The postal authorities did not order
the workers to cease performance of the balance of their work
and did not dismiss them, but indicated that the workers would not
be permitted to leave the post office and that leaving the post
office or not attending in future would be regarded as a serious
dereliction of duty. Fullagar 3. held that in those circumstances
the post office were not entitled to withhold pay for the period
during which each worker refused to carry out banned work. Of
course, where an employer insists that a worker engaged in
industrial action shall nevertheless attend, and the worker does
attend, it is impossible for the employer to maintain that the
worker is not entitled to be paid for his attendance. In the
present case, however, the council made it clear that if Mr. Miles
was not prepared to conduct wedding ceremonies on Saturday, he
was neither required nor entitled to attend at the registry office.
*n Sim v. Rotherham Metropolitan Borough Council [1986] 3
W.L.R. 851, where a teacher in breach of contract refused to work
during his "free hours," Scott 3. held that the principle of
equitable set-off applied to contracts of employment and that the
local authority employers were entitled to make deduction from
the teacher's salary by way of equitable set-off of amounts
calculated to represent the financial loss suffered by those
authorities. In that case the amounts of the deductions were
accepted by the teacher as reasonable. In the present case, since
the deduction made by the council is less than the value placed
upon the services of the plaintiff by his union in their industrial
dispute for higher salaries, the deduction can hardly be
unreasonable.
_ 14 .
I
Two of the authorities (Laurie v. British Steel Corporation
and Henthorn v. Central Electricity Generating Board) held that a
contract of employment does not entitle a worker to wages but
entitles him to claim wages for work which he carries out or is
willing to carry out pursuant to the contract. Some authorities
(National Coal Board v. Galley and Sim v. Rotherham Metropolitan
Borough Council, and other cases) proceed on the footing that a
contract of employment entitles a worker to wages and that a
refusal to work only founds a claim for damages by the employer.
Whether a refusal to work prevents a claim by the worker or
affords a defence to the employer, workers taking industrial action
have not recovered their wages save in two cases. The first case,
McClenaghan v. Bank of New Zealand [1978] 2 N.Z.L.R. 528, was
decided on the construction of a New Zealand statute with which
your Lordships are not concerned, and the obiter remarks of the
judge concerning the position at common law do not commend
themselves to me. In the second case, Welbourn v. Australian
Postal Commission [1984] V.R. 257, the employers were obliged to
pay wages because they insisted that the workers attend for work
and the workers complied. In my opinion, wages are remuneration
which must be earned; in a claim for wages under a contract of
employment, the worker must assert that he worked or was willing
to work. The principle is elegently expressed in the speech
prepared by my noble and learned friend, Lord Oliver of
Ayimerton, and is supported by the additional authorities to which
he refers. When a worker in breach of contract declines to work
in accordance with the contract, but claims payment for his
wages, it is unnecessary to consider the law relating to damages
and unnecessary for the employer to rely on the defences of
abatement or equitable set-off. The employer may or may not
sustain and be able to prove and recover damages by reason of the
breach of contract for each worker. But so far as wages are
concerned, the worker can only claim them if he is willing to
work. The plaintiff is in no better position than a worker under a
contract of employment in declining to work in accordance with
the duties of his office.
I would allow the appeal and dismiss the action.
LORD OLIVER OF AYLMERTON
My Lords,
The factual background from which this appeal arises has
already been set out in the speech delivered by my noble and
learned friend, Lord Templeman, which I have had the advantage
of reading in draft. The appeal raises, essentially, three questions.
First, on the true construction of the relevant legislation and of
the local scheme made thereunder, is the salary of a
superintendent registrar of births, deaths and marriages an
honorarium attached to mere tenure of the office, regardless of
whether the officer-holder chooses to perform all or any of the
duties attached to it (as the majority in the Court of Appeal
held), or is it in the nature of remuneration for work done (as was
the view of Eveleigh L.3. in his dissenting judgment in the Court
of Appeal and of Nicholls 3. in the court of first instance)?
- 15 -
Secondly, if the true nature of the plaintiff's salary is
remuneration for work done and thus to be equiparated to the
salary or wages of an employee under a contract of employment,
would the appellant council, in the circumstances of this case,
have been entitled to withhold all or part of the salary in respect
of a period in which the plaintiff declined to carry out the duties
of his office if he had in fact been employed by the council to
carry out those duties? Thirdly, it having been conceded in the
council's written case that the evidence before Nicholls J. could
not support a contention that the plaintiff was in fact employed
by the council under a contract of employment, is it permissible,
as Eveleigh L.J. and Nicholls J. concluded, to apply to the
statutory relationship between them arising from the holding by
the plaintiff of his office as superintendent registrar the analogy
of a contractual employment and, if so, what is the consequence
of so doing?
As to the first of these questions, there appear to me to be
a number of indications pointing to the conclusion that the salary
was intended to be the reward for the work done in carrying out
the duties of the office and not simply an honorarium for its mere
tenure. Prior to the Local Government Act 1929, a registration
officer's remuneration was derived from the fees which were
payable to him for carrying out his functions. If he failed to
perform a particular function on a particular occasion he was not
paid for it. By section 22(1) of the Act of 1929 it was provided
that upon any vacancy occurring after the appointed day in the
office of a registration officer, the office should become a
salaried office and, by subsection (2) of the same section, existing
registration officers were given the option of becoming salaried
officers. The "salary or remuneration to be attached to any
salaried office" was to be determined by the responsible council
(section 22(4)(a)). After the Registration Service Act 1953 all
registration officers became salaried. It is difficult to see any
reason why the legislature should have intended to substitute for a
system of remuneration which originally depended entirely upon the
volume of work done an honorarium entirely unrelated to the work
done and payable for the mere holding of the office regardless of
whether or not the holder carried out the duties of the office.
There is no provision of the Act of 1929 or of the Act of 1953
which compulsively leads to this conclusion as a matter of
construction. On the contrary, the more natural construction of
the "salary and other remuneration" which is to be fixed by the
local authority under section 13(2)(e) of the Act of 1953 is that
these words connote a financial reward for services rendered.
Again, section 13(2)(f) imposes on the local authority the duty to
fix the conditions upon which the office of a superintendent
registrar is held - a duty which, whilst it may not establish a
contractual nexus between the authority and the appointee,
certainly assimilates his position to that of an employee, an
assimilation which is strengthened by the power of supervision
conferred on the proper officer of the local authority by section
13(2)(h). Moreover, as was pointed out by Eveleigh L.J. in his
dissenting judgment in the Court of Appeal, the salary fixed by
the local authority under paragraph 5 of the local scheme is
directly related to the number of hours required for the proper
performance of the duties of the office. For my part, therefore, I
am persuaded that the true nature of the salary for which
statutory provision is made by section 13 of the Act is that it is
- 16 -
a remuneration for work done and not simply an honorarium for
the tenure of office.
My Lords, it does not of course follow from this that a
failure on the part of the office-holder to perform the duties of
his office necessarily entitles the local authority to withhold
payment of the whole or part of his remuneration, but if that is
to be justified at all the determination of the nature of the salary
is a first and essential step. If the authority would have no right
at common law to withhold any part of the salary were it payable
pursuant to a contract of employment, there is certainly nothing in
the Act of 1953 which would give the local authority any higher
right than that possessed by an employer. Mr. Sedley, on behalf
of the plaintiff, has drawn attention to a number of authorities in
support of the proposition that an employer under a contract of
employment has no such right. He submits that, in a case where
an employee is in breach of the terms of his employment, the
employer has only two options. He may, if the failure to carry
out contractual duties is sufficiently serious, treat it as a
repudiatory breach of contract and accept the repudiation, thus
bringing the contract to an end and excusing himself from further
performance of his own obligation to pay the contractual wage or
salary. Alternatively, he may affirm the contract and sue for
damages for the breach which has occurred. That claim is one
which, if he is sued by the employee for wages, he can exert by
means of a counterclaim or set-off, so that effectively he can, in
practice, make a deduction from the employee's wages. If he
does, however, he must be prepared to justify the deduction by
reference to the damage which he has suffered. That the options
in case of breach of contract are thus restricted is, Mr. Sedley
submits, clearly established by decisions of this House in, for
instance, Suisse Atlantique Societe d'Armement Maritime S.A. v.
N.V. Rotterdamsche Kolen Centrale [1967] 1 A.C. 361, and Photo
Production Ltd. v. Securicor Transport Ltd. [1980] AC 827. The
same principle equally applies, Mr. Sedley submits, to contracts of
employment. Thus in Sim v. Rotherham Metropolitan Borough
Council [1986] 3 W.L.R. 851, where a teacher had declined to
perform part of his duties but the employing authority had
affirmed the contract and continued to accept his services, a
deduction from the employee's wages was justified only by
reference to a set-off of the employer's claim for damages for
breach of contract. In the instant case what is said is that, even
if the entitlement of the plaintiff to salary under the statute is
analogous to the contractual right of an employee, the council
cannot justify the withholding of salary by reference to either
option. The council cannot accept the refusal of the plaintiff to
carry out his statutory duties as a repudiation disentitling him to
claim the salary because, ex hypothesi, there is no contract with
the council which can be repudiated. Further and in any event,
the plaintiff continued to perform the other duties of his office
and certainly no claim has been made by the council that he is
not entitled to any salary at all. Equally, the alternative option is
closed to the council because it is unable either to show any
damage which it has suffered - such damage as there was as a
result of the inconvenience caused having been damage to the
general public and not to the appellant - nor to demonstrate any
juristic basis for a counterclaim for damages by the appellant
arising otherwise than from a breach of contract.
- 17 -
i
My Lords, I see much force in these arguments and were it
not for the principles to which I am about to refer I would, for
my part, feel bound to reach the same conclusion as that reached
by the majority of the Court of Appeal. But the critical point in
this case and the point which, in my judgment, answers Mr.
Sedley's contentions is that the action which was tried by Nicholis
3. and which gave rise to this appeal was an action in which the
plaintiff claimed certain sums as due to him by way of salary and
in which, therefore, he assumed the burden of pleading and proving
each essential allegation necessary to establish his entitlement.
Although, speaking for myself, I question whether the mere fact
that the plaintiff was appointed to his office under the provisions
of the Act of 1953 necessarily precludes the existence of a
parallel contract between him and the council for the carrying out
of his statutory duties, it has been accepted for the purposes of
the present appeal that no contractual nexus exists between him
and the council. Nevertheless, the nature of his remuneration and
the terms of his tenure of office are so closely analagous to those
of a contract of employment that any claim by him to salary
payable pursuant to the statutory provisions and the local scheme
made thereunder ought, in my judgment, to be approached in the
same way as a claim to salary or wages under such a contract.
The relationship between the council and the plaintiff has all the
incidents which one would expect from a contract of employment
save that the power of dismissal is vested in the Registrar General
and not in the appointing authority which has the responsibility for
paying the plaintiff, providing him with premises, and regulating
his hours and conditions of work. If, as a matter of law, he were
employed by the council I do not, for my part, see any difficulty
in finding a juristic basis for the retention of salary which the-
council has made. The simple fact would be that the council had
suffered damage to the extent that it was liable to pay for what
was, in effect, a period of voluntary absence from work and I see
no particular difficulty in quantifying that damage, since the
employee could hardly contend successfully that that of which his
employer had been deprived by his absence (i.e. his services) was
worth less than the sum which he was claiming to be paid for
them. And, in my judgment, on the facts of the case, the proper
inference to be drawn is that the plaintiff was refusing to work on
Saturdays and was thus, in effect, voluntarily absent on that day.
It is true that he attended the office on Saturday but it was, at
the outset, made clear to him by the council, whose proper officer
had under the statute the task of supervising the administration of
the Registration Acts and fixing the hours of attendance, that if
he was not prepared to carry out his proper function of conducting
weddings his attendance at the office on Saturdays was not
required and would not be recognised as a performance of his
duties. Thus, applying the contractual analogy, the plaintiff's
position was no different from that of an employee voluntarily
absenting himself from work. The question to be asked, therefore,
is not so much "has the employer a right to withhold from an
employee who voluntarily absents himself from work wages for the
period in which he is absent?" but "is the employee entitled to sue
for and recover from his employer wages in respect of a period
during which he has made it perfectly clear that he is not ready
and willing to perform his own contractual obligations?" To put it
another way, is it sufficient for the employee simply to plead a
contract for his employment over a given period or must he, in
order to substantiate his claim, aver and prove something more
- 18 -
than the mere formation of the contract? Mr. Sedley has
submitted that to deny to the plaintiff his claim for salary in
respect of the period not worked would be to contradict a long
line of authority establishing the employee's right to wages for
periods of involuntary absence due to sickness. Speaking for
myself, I have found this a useful analogy, for there is, I think, to
be found in those cases the answer to the question posed above.
The line of cases referred to was reviewed by Scott L.3. in
Marrison v. Bell [1939] 2 K.B. 187, and they all stem from and
follow the decision in Cuckson v. Stones (1858) 1 E. <5c E. 248,
where the distinction is clearly drawn between voluntary and
involuntary non-performance by a servant of the duties of his
employment. The plaintiff in that case had pleaded a contract of
employment at a wage of £2 lOs.Od per week and that (pp. 249-
250):
"'although all things have happened and been performed in
order to entitle the plaintiff to the performance of the said
promise of the defendant, yet the defendant . . . refused to
pay the said plaintiff the said sum of £2 lOs.Od per week
for divers, to wit 13, weeks.'"
To that the defendant pleaded in his fourth plea (p. 250):
'"to so much of the first count as relates to the claim
therein for wages: that the plaintiff was not, during any
part of the time for and in respect of which such wages are
by that count claimed, ready and willing or able to render,
and did not in fact during any part of such time render, the
agreed or any service."
The plaintiff demurred to the fourth plea and issue was joined.
Cockburn CJ. at the trial directed a verdict for the plaintiff with
leave to move to enter a verdict for the defendant, or for a non-
suit. The defendant then obtained a rule to show cause why the
verdict should not be set aside and the verdict entered for the
defendant (p. 251)
"'on the ground that, upon the evidence, the plaintiff was
not entitled to a verdict upon the fourth plea; and that the
plaintiff is not entitled to recover the weekly wages for the
time during which he has not performed the service."'
The demurrer was directed to come on for argument with the rule.
The judgment of the court as to the demurrer to the fourth plea
was delivered by Lord Campbell C.3. It is instructive and, so far
as material was as follows (pp. 255-256):
"We are of opinion that this plea is good. It is pleaded
only to the claim for wages; and it avers 'that the plaintiff
was not, during any part of the time for and in respect of
which such wages are by that count claimed, ready and
willing or able to render, and did not in fact during any
part of such time render, the agreed or any service.' We
think the gist of the plea is that the plaintiff, during the
time in question, was not ready and willing to render, and
did not render, any service, in the sense that he voluntarily
and wilfully refused or omitted to serve. If so, we think he
could not claim the wages to be paid to him in
- 19 -
consideration of his service. It was objected that his breach
of the contract would only be the subject of a cross-action.
But the alleged breach of the contract on his part seems to
go to the whole consideration for the wages: we must treat
the demurrer as if the action were brought for the wages
only: and, to avoid circuity of action, it may well be
considered that this action should be barred, so as to
prevent an unjust advantage in this action, and to put an
end to further litigation, rather than that the plaintiff
should be allowed to recover wages when he had refused to
serve, and that another action should afterwards be brought
against him to recover back the amount.
On the rule as to entering the verdict on the fourth plea (p.
256).
Whether, when issue is joined on such a plea, the want of
ability to do the act proves, in point of law, a want of
readiness and willingness, depends upon whether the want of
ability is necessarily a breach of the contract to perform a
condition precedent, or the consideration for the promise
sued upon. In an action for not accepting goods purchased,
issue being joined on a plea that the plaintiff was not ready
and willing to deliver them, the defendant would be entitled
to a verdict, on proof that the plaintiff never was in
possession of the goods he undertook to deliver. But,
looking to the nature of the contract sued upon in this
action, we think that the want of ability to serve for a
week would not, of necessity, be an answer to a claim for a
week's wages, if in truth the plaintiff was ready and willing
to serve had he been able to do so, and was only prevented
from serving during the week by the visitation of God, the
contract to serve never having been determined."
Thus the distinction between voluntary and involuntary inability is
clearly brought out. It has been the council's contention before
this House and was, as I read his judgment, also the contention
before Nicholls J. that the council's obligation to pay salary and
the plaintiff's willingness at least to perform his contractual duties
were interdependent. That certainly derives support from the case
cited. But the matter does not end there. I entirely accept that
in the case of the ordinary contract of employment there is no
entitlement in the employer to withhold wages for bad work (save
in the case of special stipulation to that effect) or, without
treating a breach of contract by the employee as a repudiation, to
accept such services as the employee is prepared to render under
his contract and deduct from his remuneration self-assessed
damages for such work as he fails to perform or fails to perform
properly. Whether in such a case the employer is entitled to any
set-off in respect of damage which he may have suffered is a
matter which must depend upon the facts of each individual case.
But where the employee declines to work at all for a particular
period - and I have already said that, in my judgment, this case
has to be approached on the basis that the plaintiff was simply
withholding his services on Saturdays - then, subject to the
question of whether the wages or salary payable are apportionable
on a periodic basis, I see no ground upon which the employee who
declines to perform that condition upon which payment depends
can successfully sue for the remuneration which is dependent upon
- 20 -
its performance. An employee, for instance, who is rightly
dimissed from his employment can recover salary which has
become due and payable at the date of his dimissal but cannot
recover sums becoming due and payable at some later date and on
the condition that he has performed his contractual duties down to
that date (see Boston Deep Sea Fishing and Ice Co. v. Ansell
(1888) 39 ChD 339, 364, £er_ Bowen L.3.).
My noble and learned friend Lord Templeman has referred in
the course of his speech to the unreported Scottish case of Laurie
v. British Steel Corporation, 23 February 1978. This is a good
example of the practical interdependence of the employee's
willingness to perform on the one hand and the employer's
obligation to pay wages on the other. That too was a case where
employees had absented themselves from work but had nevertheless
taken upon themselves the burden of averring and proving their
entitlement to wages for the period of absence.         The
interdependence of the obligations on both sides is aptly
summarised in the following extract from the opinion of Lord
Cowie in the Outer House of the Court of Session:
"counsel [for the pursuers] pointed out that no rescission of
the pursuers' contracts of employment had taken place, and
so the defenders were not entitled to refuse to fulfil their
obligations. For the defenders it was argued that they were
not seeking a remedy against the pursuers for breach of
contract. Their position was, that these being contracts of
employment they gave rise to mutual obligations and if one
party failed to fulfil his obligations, he could not call on
the other party to fulfil his. That was all that had
happened here. The defenders maintained that the pursuers
had failed to fulfil their obligation to work during a specific
period; this was a breach of their contracts of employment
and so they could not call on the defenders to fulfil their
obligations to pay their salaries during the relevant period."
After referring to Tumbull v. McLean & Co. (1874) 1 R. 730 and
Alexander Graham & Co. v. United Turkey Red Co. Ltd., 1922
S.C. 533, Lord Cowie continued:
"The feature of all these cases referred to in Graham was,
of course, that the contracts had, in each case, terminated,
whereas in the present case the contracts of employment
continued and the defenders simply refused to fulful their
obligation to pay the pursuers' salaries during a specific
period of the currency of the contracts. In spite of this
apparent specialty, however, I do not see why the general
principle should not still apply. That general principle
embodies the fundamental rule that if one party does not
fulfil his part of the mutual contract he cannot turn round
and demand performance by the other of his part of the
contract .... It seems to me that assuming that the
pursuers were in material breach of their contracts in June
1976, there were certain remedies open to the defenders,
and they could have exercised them if they so desired. It
does not follow, however, that because the defenders did not
exercise their remedies, the pursuers had the right to
demand performance of the defenders' part of the contract
when they had not carried out their own part. In principle
- 21 -
it does not seem to me to matter that the defenders have
not taken the formal step of rescinding the contract. If the
pursuers have not carried out their obligations, they cannot
sue for performance by the defenders of their obligations.
No reference is made in any of the cases to the necessity
of rescinding the contract, before putting forward the
defence that the other party cannot sue for performance
because he has not fulfilled his own obligations. In my
opinion it is not necessary to do so, and in these
circumstances, if the defenders can establish a material
breach of contract by pursuers in June 1976, the latter
would have no right of action to enforce payment by the
defenders of their salaries or indeed to obtain the declarator
sought."
The "general principle" referred to was stated thus in
Turnbull v. McLean & Co., at p. 738:
"With us . . . all the conditions of a mutual contract are
dependent on their counterparts, as a general rule, when
they are of the substance of or material to the subject
matter of the contract itself."
The same approach appears from the opinion of Lord Salvesen in
Alexander Graham & Co. v. United Turkey Red Co. Ltd., at p.
546. There was, it appears, nothing particularly novel in this so
far as the law of Scotland is concerned. The same principle
appears as long ago as 1861 in Johnston v. Robertson (1861) 23 D.
646, Lord Justice-Clerk Inglis observed, at p. 656:
"in a mutual contract, where one party seeks performance
of the stipulations in his favour, he must show that he has
given or tendered performance of his part of the contract.
Every action on a mutual contract implies that the pursuer
either has performed, or is willing to perform, his part of
the contract; and it is, therefore, always open to the
defender to say that under the contract a right arises also
to him to demand performance of the contract before the
pursuer can insist in his action."
The same principle has been applied in England. In Henthorn v.
Central Electricity Generating Board [1980] I.R.L.R. 361, the
plaintiffs were two employees at a power station. They engaged
in the practice known as "working to rule." The facts are not
entirely clear but the point which arose for decision was
essentially one of pleading. In the case of the plaintiff Henthorn,
his claim indicated that he had presented himself for work but
that the employer had declined to accept his services. In the case
of the plaintiff, Taylor, the pleading was less clear and indicated
that he had in fact been admitted for the purpose of working and
that his services had been accepted. To both claims the employer
pleaded simply that the plaintiffs were taking unofficial industrial
action in breach of their contracts of employment and on that
ground resisted the plaintiffs' claim for wages for the days upon
which the industrial action had taken place. The claims having
been referred to arbitration under section 92 of the County Courts
Act 1959, the arbitrator treated the employer's pleading as a
confession and avoidance and made an award in favour of the
plaintiffs on the basis that the burden was on the employer to
- 22 -
show that they had not been willing to work on the days for which
the wages were claimed. The matter came before the Court of
Appeal on an appeal from the refusal of the judge to set aside the
award. The appeal was allowed and the award set aside. Lawton
L.J., in delivering the leading judgment, said, at pp. 362-363, that
the arbitrator
"seems to have assumed that because the defendants were
admitting that the plaintiffs were employed by them and
were alleging that they had not done their job as they
should have done it, they were assuming a burden of proof.
In other words, he was approaching the problem on the basis
that the particulars of defence constituted a confession and
an avoidance. I am satisfied that the defendants' pleading
was not such a plea. When a plaintiff claims that he is
entitled to be paid money under a contract which he alleges
the defendant has broken he must prove that he was ready
and willing to perform the contract. That, in my judgment,
is a rule of the common law as is shown by the precedents
of pleadings in Bullen & Leake, Precedents of Pleadings, 3rd
ed. (1868) .... Mr. Henthorn, in his particulars of claim,
was following what was in the third edition of Bullen &
Leake, Precedents of Pleadings, because he was saying that
he was ready and willing to work and presented himself for
work.
There have, of course, been many changes in the law since
the publication of the third edition of Bullen & Leake,
Precedents of Pleadings, but the burden of proof in contract
cases of this kind has not been shifted by any of the
statutory changes in procedure which have been made in the
last 100 years ... .It follows, so it seems to me, that ail
the defendants were doing was to put in issue, by their
particulars of defence, the question whether the plaintiffs
were ready and willing to perform their contracts of
employment, and on the authorities to which I have
referred, the burden of proof rested on the plaintiffs. It
follows that when Judge Davies took the view, as he did,
that it was for the defendants to establish their allegation
that the plaintiffs were not ready and willing to perform
their contracts, he misdirected himself on the very
fundamentals of the case."
Another case in which wages were claimed for what was,
effectively, a period of absence from work was Cresswell v. Board
of Inland Revenue [1984] 1 C.R. 508. In that case, employees of
the Board of Inland Revenue refused their employers' lawful
instructions to operate a computerised system. Their contracts of
employment contained powers of suspension, but the board made it
clear that it was not relying upon this. Equally it did not accept
the employees' refusal as a repudiation. It simply indicated that
the employees would not be permitted to work so long as they
refused its lawful instructions and that it would not pay for the
manual services which the employees were willing to tender but
which the board, acting within its rights under the contract, was
not prepared to accept as a performance of the employees'
obligation. Walton 3. dismissed the plaintiffs' claim and it is
worth quoting from his judgment, where the principle is thus
pithily expressed, at p. 522:
- 23 -
"On this part of the case, which, if the plaintiffs were
correct, would mean that the revenue would have to go on
paying them all during the time they were refusing to carry
out the perfectly lawful requirements of their employer,
[counsel for the revenue] rested his case on the very simple
ground that, so far as an employer and an employee are
concerned, the promises of pay and work are mutually
dependent. No work (or, at any rate, readiness to perform
whatever work it is the employee ought to be willing to
perform if physically able to do so) - no pay. This is such
an obvious principle, founded on the simplest consideration
of what the plaintiff would have to prove in any action for
recovery of pay in respect of any period where he was
deliberately absent from work of his own accord, that direct
authority is slight - slight, but sufficient. See for example
Denmark Productions Ltd. v. Boscobel Productions Ltd.
[1969] 1 Q.B., per Winn L.J., at pp. 713f-732f; Secretary of
State for Employment v. ASLEF (No. 2) [1972] 2 Q.B. 455,
per Lord Denning M.R., at pp. 491f-492e; and in particular
an unreported case from Scotland, Laurie v. British Steel
Corporation, 23 February 1978-a decision of Lord Cowie."
Thus it is Mr. Irvine's submission on behalf of the council
that there is no necessity to engage in a tortuous process of
seeing whether the council can establish by way of set-off some
valid counterclaim for damages quantified so as to equal or exceed
the amount of the plaintiff's claim. The plaintiff, he submits,
fails at an earlier stage because he simply is not able to aver and
prove that he was ready and willing to perform the services which
formed the consideration for the payment claimed and on the
performance of which it depended. His claim simply fails for
want of proof of an essential allegation. The essential question is
whether what Mr. Irvine has termed the theory of interdependent
obligation is consistent with the authorities relied upon by Mr.
Sedley in support of his proposition that, short of accepting the
employee's breach as a repudiation determining the contract
altogether, there is no way in which an employer can resist a
claim for the full contractual remuneration other than the
establishment of a counterclaim for damages.
My Lords, I confess that I have not found the question an
easy one to answer but in the end I am persuaded by Mr. Irvine's
submissions. A plaintiff in an action for remuneration under a
contract of employment must, in my judgment, assume the initial
burden of averring and proving his readiness and willingness to
render the services required by the contract (subject, no doubt, to
any implied term exonerating him from inability to perform due,
for instance, to illness). I do not, for my part, find this
inconsistent with the cases to which Mr. Sedley has drawn
attention and which preclude the employer from accepting the
services tendered whilst at the same time seeking to penalise the
employee for some other breach of his contractual obligations.
For instance, Hanley v. Pease & Partners Ltd. [1915] 1 K.B. 698
was a case in which the employer unsuccessfully sought to
withhold from his employee, as a punishment for absence on a
previous day on which he had not worked, wages for a day on
which the employee had worked. It is interesting to note that
there does not appear to have been any dispute that that employee
was not entitled to be paid for the day on which he was absent.
- 24 -
I
Healey v. Societe Anonyme Francaise Rubastic [1917] 1 K.B. 946 -
a decision approved by this House in Ramsden v. David Sharratt
and Sons Ltd. (1930) 35 Com.Cas. 314 - was a case not of absence
but of misconduct. The claim there was for salary in respect of a
period properly worked by the employee prior to his dismissal
which he was held entitled to recover. Williams v. North's
Navigation Collieries (1889) Ltd. [1906] AC 136 was another case
concerned with a claim to deduct from wages due for a period
properly worked a sum due in respect of a previous period of
absence. The decision, in any event, turned upon the provisions of
the Truck Act 1831 (1 & 2 Wm. 4, c. 37). Sim v. Rotherham
Metropolitan Borough Council [1986] 3 W.L.R. 851 contains a lucid
analysis by Scott 3. but was not concerned with the point argued
by Mr. Irvine. It was not itself an action for wages but was an
action for a declaration that the employer had no right to make
any deduction from the employee's wages for the non- performance
of certain of the employee's duties, the services of the employee
having been continued and accepted by the employer. The
deduction was there justified by the employer's cross-claim for
damages for breach of contract, there being no dispute about
quantum. Two cases particularly relied upon by Mr. Sedley were
McClenaghan v. Bank of New Zealand [1978] 2 N.Z.L.R. 528 and
Welbourn v. Australian Postal Commission [1984] V.R. 257. The
former was concerned with the withholding by the employer of
wages in respect of a period during which the employee had
worked in accordance with his contract which was sought to be
justified on the ground of a breach of contract in a previous
period. There was no cross-claim by the employer for damages
and, in any event, the decision turned on the provisions of the
New Zealand Wages Protection Act 1964. In Welbourn, the
employee had presented himself for duty but indicated his
unwillingness to perform certain functions.         The employer
nevertheless accepted the services tendered, but at the same time
sought to withhold the payment of wages. The employer in that
case, having not only accepted the benefit of the services offered
but insisted upon the employee staying at the place of work to
perform them, was hardly in a position to refute that the
employee was ready and willing to perform contractual services
which the employer was prepared to accept. But in any event the
decision ultimately turned on the specific provisions of the
Australian Postal Services Act 1975. I do not for my part find
that any of these cases touches the point which, as I read his
judgment, ultimately formed the basis for Nicholls J.'s decision and
which, in my judgment, concludes this appeal in the council's
favour. It may well be that different considerations apply where
an employer claims to withhold remuneration under a subsisting
contract on the ground of past misconduct or where the employer
has, by accepting and directing the employee's services, or
precluded himself from denying that the employee was ready and
willing to perform (albeit possibly incompletely) the services which
his contract obliged him to render. But for the reasons which I
have endeavoured to expound I do not consider that the instant
case is in pari materia and I prefer to reserve any comment about
such a case until it arises.
As I have already indicated, the position of the plaintiff is
very closely analogous to that of an employee employed by the
council under a contract of service and embraces substantially all
the incidents normally associated with such an employment save
- 25 -
i
that the power of dismissal lies elsewhere than in the paymaster.
In the context of a claim against the paymaster for remuneration
for his services, where the question is "has the plaintiff earned the
salary which he claims?", the analogy appears to me to be exact
and in my judgment the burden which the plaintiff has to assume
in order to succeed in a claim for his statutory remuneration is no
different from that required of an employee. I would, for my part
therefore, answer the third question postulated above in the
affirmative. Applying the contractual analogy, the plaintiff
cannot, for the reasons which I have given, successfully claim that
he was at the material time ready and willing to perform the
work which he was properly required to do on Saturdays and his
action for the remuneration attributable to that work must fail. I
would also prefer to reserve my opinion with regard to the
question whether there may not be circumstances in which an
employee engaged in industrial action might be entitled to claim
remuneration on a quantum meruit basis for work actually done.
- 26 -
Miles (Respondent)
v.
Wakefield Metropolitan District Council (Appellants)
JUDGMENT
Die Jovis 12° Martii 1987
Upon Report from the Appellate Committee to whom was
referred the Cause Miles against Wakefield Metropolitan
District Council, That the Committee had heard Counsel on
Tuesday the 3rd, Wednesday the 4th and Thursday the 5th days
of June 1986, as on Tuesday the 9th and Wednesday the 10th
days of December 1986, upon the Petition and Appeal of
Wakefield Metropolitan District Council, of Town Hall,
Wakefield, praying that the matter of the Order set forth in
the Schedule thereto, namely an Order of Her Majesty's Court
of Appeal of 8th February 1985, might be reviewed before Her
Majesty the Queen in Her Court of Parliament and that the said
Order might be reversed, varied or altered or that the
Petitioners might have such other relief in the premises as to
Her Majesty the Queen in Her Court of Parliament might seem
meet; as upon the Case of Henry Gladstone Miles lodged in
answer to the said Appeal; and due consideration had this day
of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and
Temporal in the Court of Parliament of Her Majesty the Queen
assembled, That the said Order of Her Majesty's Court of
Appeal of the 8th day of February 1985 complained of in the
said Appeal be, and the same is hereby, Reversed and that the
Order of Mr. Justice Nrcholls of the 9th day of November 1983
be, and the same is hereby Restored: And it is further
Ordered, That the Respondent do pay or cause to be paid to the
said Appellants the Costs incurred by them in the Court of
Appeal and also the Costs incurred by them in respect of the
said Appeal to this House, the amount of such last-mentioned
Costs to be certified by the Clerk of the Parliaments if not
agreed between the parties: And it is also further Ordered,
That the Cause be, and the same is hereby, remitted back to
the Chancery Division of the High Court of Justice to do
therein as shall be just and consistent with this Judgment.
Cler:
Parliamentor:
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