X v Ministry of Defence [2012] NIIT 02815

THE INDUSTRIAL TRIBUNALS

CASE REF: 2815/11

CLAIMANT: Mr X

RESPONDENT: Ministry of Defence

DECISION

The decision of the tribunal is that the claimant’s claim of unlawful deduction from wages is well-founded and the tribunal makes a declaration to that effect. The respondent is hereby ordered to repay to the claimant the agreed amount of the deduction, that is £464.97 (gross).

Constitution of Tribunal:

Chairman (Sitting alone): Ms J Turkington

Appearances:

The claimant appeared and was represented at the hearing by Mr J Boeurs, voluntary representative.

The respondent appeared at the hearing and was represented by Ms Rachel Best, Barrister-at-Law, instructed by the Crown Solicitors Office.

THE CLAIM

The claimant brought a claim in respect of alleged unlawful deduction of wages.

THE ISSUES

The issues to be determined by the tribunal were:-

1. The wages properly due to the claimant under his contract of employment and therefore whether the respondent made an unlawful deduction from the claimant’s wages.

THE CONTENTIONS OF THE PARTIES

2. By way of preliminary point, the respondent’s counsel raised an argument that the tribunal did not have jurisdiction to hear the claim. This was based on case law, including the cases of SIP Industrial Products v Swinn 1994 IRLR 323 and Sunderland Polytechnic v Evans 1993 ICR 392. It was argued that the tribunal did not have jurisdiction to determine the lawfulness of a deduction where it was made for the purpose of recovering an over-payment.

3. In relation to this preliminary point, the tribunal ruled that the cases relied on by the respondent’s counsel all dealt with situations where there was a clear and undisputed over-payment of wages and the issue in dispute was the lawfulness of a deduction made to recover such over-payment. This was in contrast to the situation in this case where the dispute was as to whether or not there was any
over-payment. Accordingly, the tribunal held that it was not precluded by these cases from determining the issue in dispute in this case and ruled that the hearing should continue.

4. On behalf of the claimant, it was contended that, upon his transfer to a new post in the course of a re-organisation in or about June/July 2007, there was an agreement in place whereby he would retain the terms and conditions of his previous post, including pay. The claimant contended that he had therefore been paid correctly at all relevant times. He had not been over-paid and the deduction made by the respondent was not and could not have been made for the purpose of recovering an over-payment and was thus unlawful.

5. The respondent’s counsel contended that there was no such agreement. There was certainly no direct evidence of such an agreement. The tribunal should be cautious about concluding that there was such an agreement through drawing inferences. By reason of an error, the claimant had been wrongly paid at the rate applicable to the post held by the claimant prior to 2007. This had resulted in an over-payment and the deduction made by the respondent in or about August 2011 was made for the purpose of recovering this over-payment and therefore not unlawful.

6. Both parties agreed that the sum in dispute, that is the amount of the alleged unlawful deduction, was £464.97.

7. For reasons relating to security, both parties asked the tribunal to anonymise the names of the claimant and witnesses pursuant to the tribunal’s general powers of case management. The tribunal has acceded to this request.

SOURCES OF EVIDENCE

8. The tribunal heard oral evidence from the claimant and from Miss A, Mr P and Mr M on behalf of the respondent. The tribunal also considered a number of documents submitted by the parties and carefully considered the submissions made on behalf of both parties.

FACTS OF THE CASE

Having considered the claim form and response form and having considered the evidence called on behalf of both parties and the relevant documents, the tribunal found the following relevant facts:-

9. The claimant Mr X started his employment with the respondent in November 1987. The claimant retired from the respondent’s employment on 31 October 2011.

10. Over the years, the claimant held a number of different posts. The claimant was eventually promoted to the E1 (non-industrial) grade and held that post for some time.

11. In or about 2007, the respondent in Northern Ireland was under-going a significant re-organisation known as normalisation. In the course of that process, the claimant’s post came under consideration. The claimant’s E1 post was not to be retained in its current form. The claimant wished to remain in employment and did not wish at that time to avail of early retirement/voluntary redundancy.

12. It was not in dispute between the parties that from July 2007, the claimant worked in a post categorised as Skill Zone 3 (an industrial post). The dispute between the parties centred on whether there was an agreement that, despite the change in his post, the claimant would remain categorised as E1 grade and would retain the terms and conditions and rate of pay applicable to the E1 post “the alleged agreement”.

13. Very limited direct evidence, either witness testimony or documentary evidence was available to the tribunal on the issue of whether or not there was any such agreement.

14. The tribunal did hear evidence that during the early part of 2007, numerous meetings took place between the respondent and the trade unions regionally in relation to the ongoing re-organisation. Miss A gave evidence that during those meetings, the case of the claimant was discussed. There was great resistance on the part of the Unions to any suggestion that the claimant could be transferred to an industrial post (Skill Zone 3) whilst continuing to be treated as a non-industrial grade (E1). Miss A did not believe that there was any agreement at a regional level to such an arrangement in the case of the claimant. However, she candidly accepted, firstly, that the Unions did not have any veto over decisions by the respondent and, secondly, that she could not have been aware of any local agreements in relation to this. Other than the evidence of Miss A, the tribunal heard no direct evidence either of the existence of the alleged agreement or the absence of the alleged agreement.

15. In seeking to resolve the dispute on this point, the tribunal considered the following relevant evidence:-

(a) A letter dated July 2007 was sent to the claimant headed “Skill Zone 3” informing him that “arrangements have been made for you to transfer to the above post with effect from 5^th July 2007”. The letter also stated that “Your other conditions of service are unchanged”.

(b) After his move to the Skill Zone 3 post, the claimant was required to assist with training the new Band D employee who had taken over from him.

(c) The responsibility for providing instructions in relation to changes of pay lay with local management and/or local human resources.

(d) At the time of the claimant’s move to the Skill Zone 3 post, there was no substantive difference between the pay scales for Skill Zone 3 and that for Grade E1. The scales diverged as a result of national negotiations relating to the respective pay-scales for 2008-2010. At that time, the points on the E1 pay scale became more favourable for the claimant.

(e) The documents in the tribunal bundle included a document headed “Case to Retain [the claimant] in post”. The claimant stated that this had been prepared by the then officer commanding of the relevant base. This was not disputed by the respondent. This document sets out an argument for the claimant to be retained as there was an ongoing business need for his particular skills. It also indicated that it was the intention of the author to “post map” the claimant’s post as a Direct Transfer post. There is a reference to the fact that the claimant was only expected to remain in post for a further 3 years before his retirement. This document also referred to the requirement for the claimant to train the new Grade D. However, the tribunal has given limited weight to the content of this document since the author did not give evidence and was not available for cross-examination.

(f) Mr M, who was then the second in command of the relevant base, wrote a letter dated 2 October 2008 and headed “employment of the claimant” which stated that “after investigation and having spoken to the TU secretary (ie Miss A) I believe that the following was agreed when the claimant was being post mapped.

The claimant is an incumbent Grade E1…………..The claimant is being held against the position of skills zone 3 chief range warden. When he retires a skill zone 3 chief range warden will be recruited”.

(g) A print-out from the respondent’s HR information system printed in August 2008 shows a difference between the claimant’s post which is shown as Skill Zone 3 and the incumbent information which sets out the claimant’s name and his salary and rank as E1.

(h) By contrast, in a print-out printed from the same system in June 2009, the details relating to “incumbent” are blank.

(i) The claimant’s personal record generated in November 2011 shows his post from July 2007 as Skills Zone 3, but it is not clear when the information in this record was inputted or changed. Some of the other information in this record is not accurate.

(j) The application for early retirement for the claimant completed during 2011 showed the claimant as a substantive Skill Zone 3. The copy of this form in the tribunal bundle was completed by the claimant’s line manager and was not signed by him.

(k) Upon receipt of the application for early retirement, the respondent realised that there was a discrepancy between the information set out in this form (ie that the claimant was a substantive Skill Zone 3) and the record of wages paid to the claimant (ie he had been paid as a Grade E1). This discrepancy was then investigated and Mr M was contacted. He indicated that the claimant was employed as a Skill Zone 3.

(l) The respondent then took the view that the claimant had been over-paid and he received a letter dated 17 August 2011 informing him that there been an over-payment of salary which the respondent proposed to recover by way of a set-off against a bonus due to the claimant.

(m) The claimant contacted HR/salaries in response to this letter. He was informed that they simply implemented instructions from management. The claimant’s solicitors wrote to the respondent on 26 October 2011 objecting to the deduction. The respondent replied by letter dated 27 October 2011 indicating that the claimant had been wrongly paid at the rate for the E1 grade rather than Skill Zone 3.

16. The tribunal has carefully reviewed and weighed up all the available evidence which touched on the existence or otherwise of the alleged agreement. In considering this matter, the tribunal took particular note of the letter written by Mr M in October 2008. This letter was written just over one year after the claimant’s move to the Skill Zone 3 post. It was clear that this letter was written with knowledge that the issue of the claimant’s status was controversial and that it was written after consultation with others, particularly Miss A. The letter also specifically states that “the following was agreed.” In this letter, Mr M describes a position which was reflected in the personnel records at that time, namely that there was a distinction between the post held by the claimant which was Skill Zone 3 and the incumbent, that is the claimant, who was grade E1. The fact that the claimant had only 3 years left to his expected date of retirement was mentioned in this letter and the tribunal suspects this was a highly relevant factor in the unusual arrangements implemented in the case of the claimant.

17. On balance, the tribunal has concluded that the preponderance of the available evidence is more consistent with the existence of an arrangement whereby the claimant was to continue to be treated as a Grade E1 even though he held a Skill Zone 3 post. The tribunal therefore finds as a fact that there was such an agreement. The tribunal is satisfied that this agreement covered all other terms and conditions of employment, including pay. It is not necessary for the tribunal to determine whether this arrangement was eventually, but reluctantly, agreed to by the trade unions or whether it was simply tacitly implemented by local management.

STATEMENT OF LAW

18. The tribunal considered the relevant provisions of the Employment Rights (Northern Ireland) Order 1996 and the commentary on the equivalent provisions in Harvey on Industrial Relations and Employment law. By Article 45 (1) of the Order, an employer shall not make a deduction from wages of a worker employed by him unless the deduction is authorised by statute or a relevant provision of the worker’s contract or the worker has previously signified in writing his consent to the making of the deduction. Article 45 (3) states that, where the total amount of wages paid on any occasion by an employer to a worker is less than the total amount of the wages properly payable by him to the worker on that occasion, the amount of the deficiency shall be treated as a deduction made by the employer on that occasion. As Harvey makes clear, the starting-point is therefore that the tribunal must determine the amount of the wages properly due to the worker on the relevant occasion.

19. Article 46 states that Article 45 does not apply to any deduction from a worker’s wages made by his employment where the purpose of the deduction is the reimbursement of the employer in respect of an over payment of wages.

CONCLUSIONS

20. The tribunal began by determining the amount of wages properly due to the claimant at the relevant times. For the reasons explained above, the tribunal has found as a fact that there was an agreement whereby from 2007 onwards, the claimant was to continue to be treated as a Grade E1 even though he held a Skill Zone 3 post. At all relevant times, the claimant received the appropriate pay applicable to the Grade E1 post, that is the wages due to him pursuant to this agreement. The tribunal is therefore satisfied that the claimant received the rate of pay properly and lawfully due to him at all relevant times. The claimant did not receive any over-payment of wages.

21. Accordingly, the deduction from the claimant’s wages made by the respondent in or about August 2011 made for the stated purpose of recovering an over-payment could not have been made for this purpose. This deduction constitutes a deduction from the wages properly due to the claimant on that occasion. The respondent is therefore ordered to repay to the claimant the agreed amount of the deduction, that is £464.97 (gross).

22. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (NI) 1990.

Chairman:

Date and place of hearing: 8 March 2012, Belfast.

Date decision recorded in register and issued to parties:

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	Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> X v Ministry of Defence [2012] NIIT 02815_11IT (19 April 2012) URL: http://www.bailii.org/nie/cases/NIIT/2012/02815_11IT.html Cite as: [2012] NIIT 2815_11IT, [2012] NIIT 02815_11IT

Industrial Tribunals Northern Ireland Decisions