THE INDUSTRIAL TRIBUNALS
CASE REF: 818/06
CLAIMANT: Michelle McCafferty
RESPONDENT: Derry City Council
DECISION
The decision of the tribunal is that the claimant's complaint under Article 55 of the Employment Rights (Northern Ireland) Order 1996 is well-founded in that the respondent has made a series of unauthorised deductions from wages due under contract to the claimant. This is the case from 1 April 1999 and thereafter up to the date of this complaint to the tribunal in respect of all hours worked by the claimant between 8.00pm and 6.00am whereby the particular contractual provisions applicable to the claimant's contract of employment provided that such hours (defined as "night work") were to receive an enhancement of remuneration at time and one third.
Constitution of Tribunal:
Chairman: Mr J V Leonard (Sitting Alone)
Appearances:
The claimant was represented by Mr McDermott.
The respondent was represented by Mr P Rodgers, Barrister-at-Law, instructed by J Blair, Solicitor.
REASONS
- Reasons are given in accordance with Rule 30 contained in Schedule 1 to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005, reasons having been reserved at the conclusion of the hearing of the matter. The tribunal heard oral evidence from the claimant and from Mr Adrian Kelly. The tribunal also heard the oral evidence of Mr Seamus Cairns and Mr Robert Bradley of the respondent. The tribunal had before it two agreed bundles of documents, submitted respectively on behalf of the claimant and the respondent, and additional documents were placed before the tribunal in the course of the hearing, by agreement.
- The claimant's claim was contained in a claim form dated 26 June 2006 and received by the Office of the Tribunals on 27 June 2006. The claim was that the respondent had made unlawful deductions from the claimant's salary in respect of "Night Work" allowance and had failed to observe the terms of the statutory Dispute Resolution Regulations. By response dated 7 August 2006, the respondent denied the claimant's claims in their entirety.
- In the course of the hearing it was made clear that the issue which required to be determined by the tribunal was the interpretation of the contractual terms which were applicable to the claimant's employment by the respondent. Accordingly the tribunal proceeded to hear the oral evidence in connection with that issue and to inspect the documentation adduced in evidence by the parties. The alleged unlawful deduction of wages claim related directly to the interpretation to be placed upon the contract terms applicable to the claimant's employment by the respondent.
THE TRIBUNAL'S DETERMINATIONS OF FACT
- On foot of the oral and documentary evidence before it, on the balance of probabilities the tribunal determined the following facts material to the issues:-
(a) In the main, the documentation placed before the tribunal and the evidence of the various witnesses was not contentious save as to issues of interpretation of contract. It was agreed between the parties that the claimant was first employed by the respondent as a receptionist in the respondent's Templemore Sports Complex on or about 19 October 1998. This employment was the subject of a letter of appointment on the part of the respondent to the claimant dated 9 September 1998. That letter stated that the claimant's basic hours of duty would be a minimum of 16 hours per week which might include evening and/or weekend working depending on the needs of the service; the exact working of these hours might be subject to change. The letter of appointment further stated that the appointment was subject to the "Scheme of Conditions of Service of the National Joint Council for Local Government Services", a copy of which would be made available for the claimant's inspection on request at all reasonable times.
(b) The various witnesses clarified to the tribunal that this employment existed in the context of specific Local Government Service Conditions. The tribunal will further refer to the details of these conditions below.
(c) A body known as the "National Joint Council for Local Authorities Administrative, Professional, Technical and Clerical Services" ("NJC") exists to regulate joint action for consideration of salaries, wages and service conditions of employees in Local Government Service. Some years ago NJC published two schemes of Conditions of Service respectively known as "the Purple Book" and "the Green Book". The Green Book applied to manual and technical workers in Local Government Service and the Purple Book was applicable to administrative and clerical staff. As such a member of the respondent's administrative and clerical staff, upon becoming employed by the respondent, the claimant's conditions of service were governed by the applicable NJC Service Conditions. That fact is made clear by the letter of appointment dated 9 September 1998.
(d) Relevant extracts from the Purple Book, Section 3, Paragraph 38 (material to the issues in this matter) read as follows:-
"
(3) SEPARATE ENTITLEMENTS AND METHOD OF CALCULATION
(a) It is possible for an officer simultaneously to have a separate entitlement to more than one of the allowances set out at sub-paragraph (4) except that an officer shall not be entitled to allowances for night work and shift work and irregular hours working at any one time. Where separate entitlements exist, each payment shall be calculated separately on the basis of the plain time rate: it is a basic principle of this Paragraph of the Scheme that an officer shall not receive a premium payment based on an already enhanced rate.
(b) -
(c) -
(4) ALLOWANCES
(a) -
(b) Night Work
(i) For work at night as part of the normal working week, payment shall be at time and a third for all hours worked between 8.00pm and 6.00am.
(ii) The premium rate for night work is not payable to officers when working irregular hours or employed on shift work.
(c) -
(d) Irregular Hours Working
(i) An irregular hours working allowance shall be payable where as part of the normal working week an officer's hours of duty during Monday to Friday fall outside the period of one and a half hours before and/or one and a half hours after the authority's normal office hours.
(ii) -
(iii) The premium rate for irregular hours working is not payable to officers when working at night or employed on shift work.
(iv) Part-time officers: no payment shall be made to officers employed on a part-time basis. "
(e) These foregoing provisions were applicable to the claimant's service with the respondent from September 1998. The tribunal did note in evidence certain sections from the Green Book which applied to manual workers but which were inapplicable to the claimant. These included a reference to what was known as an "unsocial hours" payment, whereby for standard hours on Mondays to Fridays in the period 8.00pm to 6.00am, day workers not qualifying for the night time rate (time and a third) would be paid a supplement of one fifth of the employer's hourly rate. However, as mentioned, these terms did not apply to the claimant's service conditions.
(f) With a view to the objective of obtaining single status employment conditions, certain discussions took place between various interested parties which resulted in what became known as the "single status agreement" (otherwise "the National Agreement"). That single status agreement, as the tribunal understands it, was initiated in 1997 and resulted in the production of what was referred to the "new Green Book". The tribunal had sight of documentation which was referable to certain transitional provisions; the following is an extract from Part 3, Appendix 1: Transitional Provisions:-
"
2 Working Arrangements
The following paragraphs of the Purple Book and the Manual Handbook remain as part of the new national agreement until 31.03.99
Purple Book – Paragraph 38
Manual Handbook – Section 3 "
That foregoing reference to "Paragraph 38" appears to be a reference to the provisions mentioned at (d) (of this decision) above. Accordingly, these transitional provisions specified that until 31 March 1999, the above-mentioned provisions of paragraph 38 of the Purple Book would continue to apply to persons such as the claimant.
(g) The tribunal was referred specifically to the following extracts from the "new Green Book" :-
"
2 Working Arrangements
2.1 The arrangement of the working week shall be determined by the authority in consultation with the recognised unions with a view to reaching agreement. The working week of individual employees may vary from the standard 37 hours (36 in London) provided that the individual's average over a predetermined period does not exceed the standard working week over the same period.
2.2 Local pay reviews will consider the issue of premium rates under the existing provisions of Part 3 of the National Agreement. In reaching local agreement concerning premium rates Paras 2.3 to 2.5 will apply. Where no local agreement concerning premium rates is reached paras 2.6 and 2.7 will apply.
2.3 -
2.4 -
2.5 -
2.6 Employees, in receipt of basic pay at or below point 28, who are required to work (a) beyond the full-time equivalent hours for the week in question or (b) on Saturday or Sunday or (c) at night or (d) on public holidays or (e) sleeping in duty or (f) other non-standard working arrangements are entitled to compensation as set out in sub-paragraphs (a) to (f) below.
As an alternative, an inclusive rate of pay to recognise these requirements may be negotiated locally in accordance with the arrangements for modifying Part 3 provisions.
(a) Additional Hours
Employees who are required to work additional hours beyond their working week are entitled to receive enhancements on the following basis:
Monday to Saturday Time and a half.
Sundays and Public and Extra Statutory holidays Double time (min 2 hours).
(Part-time employees are entitled to these enhancements only at times and in circumstances in which full-time employees in the establishment would qualify. Otherwise a full working week for full-time employees shall be worked by a part-time employee before these enhancements apply).
3.4 (sic.)
(b) Saturday and Sunday Working
Employees who are required to work on Saturday and/or Sunday as part of their normal working week are entitled to an enhancement.
Saturday Time and a half.
Sunday Time and a half – basic pay above point 11. Double time – basic pay at or below point 11.
(c) Night Work
Employees who work at night as part of their normal working week are entitled to receive an enhancement of time and one third for all hours worked between 8.00pm and 6.00am. "
- By a letter dated 4 October 2004 the claimant wrote to Mr Doherty of the respondent's Personnel Department. She entitled her letter "unsocial hours payments". The letter referred to the claim that the claimant was not in receipt of unsocial hours payments to which she believed she was entitled under the NJC Pay Terms and Conditions. She stated that she was in a work pattern which involved five late nights per week and she asked for the situation to be remedied. The claimant further wrote on 23 February 2005 a letter of reminder to Mr Doherty. Again she used the heading in the letter "unsocial hours payments". The claimant again wrote on 9 January 2006 a letter (referring to "unsocial hours payments") stating that unless the matter was resolved within four weeks she would intend to apply to an industrial tribunal concerning an unlawful deduction from her earnings. The claimant further wrote to the respondent on 27 March 2006 (again entitling her correspondence "unsocial hours payment") stating that she now wished to lodge a formal grievance concerning her entitlement to unsocial hours payments.
- The normal working hours of the respondent for administrative and clerical staff were from 9.00am to 5.15pm. The claimant had started in October 1998 as a part-time worker, working approximately 16 hours per week. The number of hours that she worked then was increased by agreement to some 29 hours per week. Her working pattern varied from one day to the next but involved her working as late as 10.00pm or 10.15pm and commencing as early as 9.00am. Certainly some of the hours worked by the claimant fell beyond 1½ hours after the normal office hours (that being with reference to the definition of "irregular hours working" as is mentioned above).
- The tribunal did not need to determine any other material facts for the purposes of reaching its decision in the case.
THE APPLICABLE LAW
- This was a claim on the part of the claimant in respect of unauthorised wages deductions. The law in respect of this may be stated as follows:-
In Article 3 of the Employment Rights (Northern Ireland) Order 1996 ("the 1996 Order"), a "worker" is defined as meaning: "...an individual who has entered into or works under (or, where the employment has ceased, worked under) – (a) a contract of employment, or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual ".
Article 45 (1) of the 1996 Order provides that: "An employer shall not make a deduction from wages of a worker employed by him unless – (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction".
Article 45(3) of the 1996 Order provides that: "Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion".
Article 55 of the 1996 Order provides that a worker may bring a complaint before a tribunal in respect of deductions in contravention of Article 45. Where a complaint is brought in respect of a series of deductions references to deduction are to the last deduction in the series. Article 56 of the 1996 Order provides that where a tribunal finds a complaint under Article 55 well-founded, it shall make a declaration to that effect and shall order the employer to pay to the worker the amount of any deduction made in contravention of Article 45.
The Court of Appeal in England in the case of Delaney –v- Staples (t/a De Montfort Recruitment) [1991] ICR 331, held that there was no valid distinction to be drawn between a deduction from a sum due, and non-payment of that sum, as far as the relevant statutory provision was concerned.
The representatives, further, cited the following cases:-
Duke -v- Reliance Systems Limited [1982] IRLR 347 (EAT)
Butler & Ors -v- Belfast City Council (IT 02989/96)
McDaid v Derry City Council (IT 809/02)
Griffiths & Anor –v- Salisbury District Council [2004] EWCA Civ. 162
THE TRIBUNAL'S DETERMINATION
- In this case the tribunal has heard and noted the arguments of the respective parties and has taken careful note of the evidence regarding the claimant's contractual terms and regarding the claimant's working pattern. The arguments of the respective parties are fairly easily summarised. For the claimant, the claimant's representative has drawn the tribunal's attention to the fact that the claimant was employed in 1998 and that the NJC Terms and Conditions as these prevailed in October 1998 were applicable to this employment. The single status agreement had come into effect in 1997. The provisions of paragraph 38(4)(b) (in respect of "Night Work") of the Purple Book had been superseded by the single status agreement provisions in respect of the new Green Book 2.6(c) in respect of "Night Work". The claimant's argument was that under those latter provisions the claimant was deemed to be working at night as part of her normal working week and was thus entitled to receive a pay enhancement of time and one third for all hours worked between 8.00pm and 6.00am. That contractual entitlement had not been met on the part of the respondent. That constituted an unauthorised deduction from the claimant's wages. That unauthorised deduction has subsisted over a considerable period of time. The tribunal was urged to look at the interpretation of the contract in the context of the intent and purpose of the single status agreement.
- For the respondent, the respondent's representative's submissions drew to the tribunal's attention the fact that the claimant's claim as initially framed was for "unsocial hours payments"; that was the expression used in the claimant's correspondence lodging her formal grievance complaint and in the earlier correspondence. Then in formulating the claimant's claim before the tribunal, that claim had been amended to a claim that the claimant was contractually entitled to payment of "night work allowance". That type of claim would have been a claim under Section 38(4)(b) of the Purple Book, in the respondent's view. Further to that, the claim now appeared to have further changed to become a freestanding claim for entitlement under the terms of the new Green Book. That was the third transition in the claimant's claim. The difficulty for the claimant was that the tribunal was tasked to consider a wages deductions case and nothing other than that.
- The respondent's representative's submissions continued: the tribunal had to consider two distinct phases. Firstly, there was the phase from October 1998, when the claimant first commenced employment, up to 31 March 1999. The transitional provisions which were before the tribunal clearly and without any doubt were applicable to the claimant's employment at that time. These clearly stated that paragraph 38 of the Purple Book continued to apply during this time. In this case the definition of "irregular hours working" contained in the Purple Book would have been applicable to the specific relevant hours worked by the claimant at that time. This was therefore applicable to any hours worked by the claimant beyond one and a half hours after the respondent's normal office hours had expired.
- If the claimant was entitled to anything (which was denied) her only entitlement could have been under the "irregular hours working" provisions. The "night work" definition was expressly framed so to exclude that being payable to officers when working irregular hours. However, no "irregular hours" claim had been made in this case. The formal claim made was for "night work" as far as the originating claim form to the tribunal was concerned. The difficulty that the claimant faced in an "irregular hours" payment claim was that no payment could be made to officers employed on a part-time basis, according to the Purple Book. All of this was clearly the case according to the contract conditions applicable to the claimant's service up to 31 March 1999. There could be no other possible interpretation of the contract.
- Beyond 31 March 1999, when the express transitional provisions expired, the tribunal was required to look at the situation in respect of local agreements and also to consider the matter of custom and practice. Whilst the intention of the transitional provisions was evidently that the arrangement was to be superseded from 1 April 1999 onwards, there was no local agreement reached in respect of clerical and administrative staff. That differed to the situation of manual and technical staff where there was such a local agreement. In that situation the provisions of the Purple Book continued to apply. If one therefore looked at paragraph 2.2 taken from the extract from the new Green Book before the tribunal, that stated that local pay reviews would consider the issue of premium rates. The tribunal then had to refer itself to paragraph 2.6 of the new Green Book, specifically to paragraph 2.6(c) in respect of "night work". Where no local agreement had been reached the tribunal ought properly to consider the facts and the matter of custom and practice. That ought to lead the tribunal to the conclusion that that particular provision in the new Green Book did not apply.
- In that regard the tribunal was referred by the respondent's representative to the case of Duke -v- Reliance Systems Limited [1982] IRLR 347 (EAT) which it was contended was authority for the proposition that a policy adopted by management unilaterally cannot become a term of the employee's contracts on the ground that it is an established custom and practice unless it is shown that the policy is being drawn to the attention of the employees or has been followed without exception for a substantial period. Accordingly, Paragraph 2.6 (c) did not apply and thus the respondent's representative urged the tribunal to find that the claimant's claim for unauthorised deductions was not made out.
- The tribunal carefully considered these arguments and considered the application and the proper interpretation to be placed upon the contract terms mentioned in argument. The claimant had been employed first in 1998 on foot of conditions which expressly incorporated "The Scheme of Conditions of Service of the National Joint Council for Local Government Services". These would have been the conditions applicable in September of 1998. Considering all of the evidence available to the tribunal, the tribunal had no hesitation in reaching the conclusion that the relevant Purple Book terms and conditions were applicable at that time. Notwithstanding the apparent existence of the single status agreement prior to that time, the express transitional provisions provided without doubt that the relevant Purple Book conditions would continue to apply until 31 March 1999. That was so specifically with reference to paragraph 38.
- Whilst the claimant certainly had initially framed her grievance as being a grievance in respect of "unsocial hours payments", by the time the formal claim was placed before the tribunal this had been framed as a claim for "night work allowance". With reference to the Purple Book conditions (paragraph 38) there was no express claim at that point for "irregular hours working" but rather a claim was lodged with the tribunal for "night work", that is to say the type of matter covered under paragraph 38(4)(b) of the Purple Book conditions. However that is stated in the conditions as not being applicable to officers when working "irregular hours". Turning then to the definition of "irregular hours working" (paragraph 38(4)(d) of the Purple Book conditions), the claimant's working pattern does seem to fall in part comfortably within that definition.
- The tribunal therefore accepts the respondent's argument that if the claimant had been otherwise qualified and entitled to anything (but subject to what follows below) she would have been entitled to an "irregular hours" working payment but not to a "night working" payment. The latter would be expressly excluded by her falling within the "irregular hours" working definition. As has been explained to the tribunal by the respondent's witnesses, Mr Cairns and Mr Bradley, the respondent's interpretation of these contractual provisions was that the effect of paragraph 38(4)(b) of the Purple Book conditions, taken together with paragraph 38(4)(d), meant that the claimant was, in the opinion of the respondent, entitled to neither an allowance for "night work" nor for "irregular hours" working. Accordingly she was paid for hours worked at the rate of plain time. The tribunal accepts that the respondent was correct in that approach from the commencement of the employment up to 31 March 1999.
- What then is the contractual position after the expiry date mentioned in these transitional provisions, 31 March 1999? The claimant's representative in argument did not accept the conclusion to which the tribunal has now come in respect of the contractual position up to 31 March 1999. The claimant's representative's suggestion has been that the single status agreement applied from the outset of the claimant's employment and certainly has continued in effect after 31 March 1999. In contrast to that, the respondent's representative has very helpfully and fairly mentioned to the tribunal (notwithstanding that there was no express reference made in submissions on the part of the claimant's representative to the specific provisions contained in the new Green Book extracts at paragraphs 2.2 and 2.6), that nonetheless the representative was obliged expressly to refer the tribunal to these provisions and to indicate that both paragraphs 2.2 and 2.6 were potentially applicable to the claimant's situation.
- The argument on behalf of the respondent was that if the tribunal was against the respondent in the strict interpretation of these contractual provisions, then there was an argument based on "custom and practice" and the case of Duke -v- Reliance Systems Limited was cited by the representative in support of that. Leaving aside, for the moment, that latter argument on the respondent's part, the tribunal has had regard to the provisions of paragraph 2.2 in the extract from the new Green Book. That extract contains the following:-
"Where no local agreement concerning premium rates is reached paras 2.6 and 2.7 will apply."
It is common case between the parties that there had been no local agreement in respect of the respondent's clerical and administrative workers at the time the claimant's originating claim was lodged. Paragraph 2.2 is therefore stating that paragraph 2.6 will apply in these circumstances.
- Paragraph 2.6(c) refers to "night work" and contains a provision that employees who work at night as part of their normal working week are entitled to receive a pay enhancement of time and one third for all hours worked between 8.00pm and 6.00am. These provisions are quite clear. In the absence of a local agreement if the claimant can be deemed to be working "at night" as part of her "normal working week" the foregoing provision entitles her to receive an enhancement of time and one third for any hours worked beyond 8.00pm (her latest working time normally being 10.00pm or 10.15pm).
- The tribunal has some difficulty in accepting the respondent's submission that the fact of there being no local agreement in existence would render paragraph 2.6(c) in some manner inapplicable. That difficulty is for the reason that the provisions of paragraph 2.6(c) are made expressly applicable to a situation where there is indeed no local agreement (see paragraph 2.2). In the absence of any other persuasive argument to the contrary, paragraph 2.6(c) would appear to be applicable to the claimant's contractual employment terms after 31 March 1999. In her originating claim the claimant has made a claim for a "night work allowance" and that is exactly what the foregoing provision seems to encompass.
- The tribunal then has had regard to the respondent's argument, notwithstanding the foregoing, that the tribunal should disregard these provisions on account of "custom and practice". The tribunal has taken note of the case cited by the respondent's representative, Duke -v- Reliance Systems Limited, and the principle upheld by the Employment Appeals Tribunal in that case that a policy adopted by management unilaterally cannot become a term of the employee's contracts unless it is shown that the policy has been drawn to the attention of the employees or has been followed without exception for a substantial period. The Duke case concerned the issue of the implication of a term with reference to retirement age into contracts where no term was expressly stated. The Employment Appeals Tribunal applied the dicta in that case to the facts of that particular case and to the matter of the firm's retirement policy.
- In this case, there was a clear and express agreement reached between the negotiating parties which resulted in the production of the new Green Book. The extract from the new Green Book placed before the tribunal is clear and is unambiguous as to effect once the expiry of the transitional provisions has occurred. The tribunal was not appraised of any express extension to the transitional provisions. It therefore must be concluded that the expressly-stated transitional provisions were always intended to expire, and indeed did expire, upon 31 March 1999. What then?
- Whilst the respondent (whether on account of ignorance or intention the tribunal is unclear) might have effectively disregarded the provisions of the new Green Book contained in paragraph 2.6(c) regarding "night work", the disregarding of express contractual provisions which are clearly intended to apply once transitional arrangements have ceased cannot, in the tribunal's view, give rise to any custom and practice argument here which can be invoked in aid of the respondent. From hearing the evidence of the claimant, the tribunal is satisfied that the claimant had little detailed knowledge of matters of contract and was reliant upon the respondent affording to her remuneration based upon a proper interpretation of the applicable contract conditions. Once, it appears, any early ignorance of the matter was replaced by a comprehension on the claimant's part that the respondent might have been wrong in the interpretation of the contract, the claimant made quite clear her position in correspondence with the respondent and then she followed that up with a formal grievance and, thereafter, with this claim to the tribunal. In the absence of anything further, the tribunal regards the provisions of the new Green Book which became operative after 31 March 1999, as being applicable to the claimant's contract. Therefore the provisions of the new Green Book at paragraph 2.6(c) regarding "night work" are imported into and are made applicable to the claimant's contract of service.
- At the outset of the matter and during the course of the hearing it was made clear to the tribunal that what was required by the parties was for the tribunal to give a judgement upon the status of the claimant's contractual terms. It was not required that the tribunal was, at this stage in matters, to deal with any issue of computing any monies which, once that initial judgement had been made, might thereafter be found to be due by the respondent to the claimant.
- That being so, the tribunal's decision is that the claimant's complaint under Article 55 of the 1996 Order is well-founded in that the respondent has made what would amount to a series of unauthorised deductions from wages due under contract to the claimant on foot of the provisions of paragraph 2.6(c) of the new Green Book conditions. This is the case from 1 April 1999 and thereafter up to the date of the claimant's claim to this tribunal in respect of all hours worked by the claimant between 8.00pm and 6.00am whereby the particular contractual provision in question provided that such hours (defined as "night work") were to receive an enhancement of remuneration at time and one third. At this point the tribunal has insufficient information upon which to base any order required to be made under Article 55 of the 1996 Order. If the parties now require this, the tribunal will further sit to hear evidence and to determine the matter of an appropriate order under that Article.
Chairman:
Date and place of hearing: 22 and 23 August 2007, Londonderry.
Date decision recorded in register and issued to parties:
