Yovonie v East Sussex Healthcare NHS Trust (Equal Pay Act) [2016] UKEAT 0240_15

HER HONOUR JUDGE EADY QC

Introduction

1. I refer to the parties as the Claimant and the Respondent, as below. This is the Full Hearing of the Claimant’s appeal against a Judgment of the London (South) Employment Tribunal (Employment Judge Martin sitting with members; “the ET”), sent out to the parties on 17 June 2015. The matter was allowed to proceed to a Full Hearing by Singh J after an Appellant-only Preliminary Hearing on one ground of appeal only, specifically:

“… the employment tribunal erred in law in that:

(1) It misdirected itself under, Part 5 Chapter 3 of “Equality of Terms”, s66(1)-(4); s67 Equality Clause; Part 9 s130(4)(a)(b); (5)(a)(b); Part 10 s142 of the Equality Act 2010 [“EqA”], and Part II and Part IX of the Employment Rights Act 1996 [“ERA”] (wrong legal test). The employment tribunal wrongly proceeded by treating the respondent’s unilateral variation to my pay as “an error.” The tribunal ought to have considered the appropriate laws of unlawful deductions from my wages and a fundamental breach of the pay terms of my contract.”

2. In permitting this ground of appeal to proceed Singh J observed:

“… it was not clear to me, even after reading the written submissions on behalf of the Respondent, what exactly happened by way of pay in this case; whether what happened was in breach of the contract of employment; and, even if it was, whether it has any material bearing on the issues that were before the ET, in particular the equal pay claim. …”

The Issue Before the ET

3. As the ET records at paragraph 4 of its Written Reasons, the relevant liability issue before it, so far as this appeal is concerned, was as follows:

“4. Race Discrimination, Sex Discrimination (Equal Pay) and Unauthorised Deduction from Wages

4.1. The Claimant is of black African ethnic origin. It is her case that when she commenced employment she was paid £25,584 pa under the Whitely Council as a band G nurse. She was subsequently assessed under Agenda for Change, with a score of 497, in a scale that ran from 466 to 530. From 12 December 2005 she was entitled to be graded and paid as a Band 7 Team Leader in the middle point of the scale, as she believes her comparators were. She was only paid at the bottom of the scale receiving only £23,826 in the 2005-6 tax year. She relies on Jim Wheeler for the purposes of her Equal Pay Claim.

…

4.3. The underpayments arising from the above facts are a series of unauthorised deductions. She was subject to further unauthorised deductions in only being paid ½ pay during her notice period, contrary to Part IX Employment Rights Act 1996. It is the Respondent’s case that she was paid at the appropriate point on the pay scale.”

4. As is apparent, the issue was identified under a subheading that included a reference to race discrimination. That said, the statutory references in the ground of appeal permitted to proceed make no reference to provisions relating to race discrimination, and I had not understood it to be a matter pursued on appeal. More generally, it is the Respondent’s case that the issues identified before the ET did not comprehend the issue raised on this appeal.

The Background Facts and the ET’s Conclusions

5. The Claimant commenced employment with the Respondent on 6 September 2005, on a term-time contract working 25 hours per week, albeit her salary was annualised and paid monthly. As the ET found, she was appointed as a G Grade nurse on salary point 27 and was paid £24,629 per annum, the lowest pay point on the G Grade pay scale; that placement being consistent with the Whitley terms and conditions then applicable to the Claimant. At that time, however, the Respondent - consistent with NHS policy - was moving towards full implementation of new pay and grading arrangements under Agenda for Change. The Claimant’s contract of employment referred to this and how it would affect her in due course. Effectively - after jobs had been matched and slotted into the new pay and grading structure - pay would be amended and, to the extent it had taken time to implement the change, any arrears made good. Local Agenda for Change guidance provided that new starters to the NHS should start at the bottom of the scale. Although Whitley policy allowed that previous service as a bank nurse might count in deciding a new employee’s pay level, the Claimant had only ten months’ relevant bank nurse experience, which was insufficient under the policy.

6. All that said, the Claimant’s initial contact of employment specified that her salary was £25,584 per annum, although she was in fact only paid £24,629. The amount she was in fact paid was - on the ET’s findings - consistent with Whitley terms and conditions, but there was a discrepancy between the amount paid and the sum stated in her contractual documentation.

7. Upon implementation of Agenda for Change the Claimant’s role was matched to a Band 7 role under the new structure. In terms of pay assimilation, it was provided:

“where basic pay before assimilation is between the new minimum and the maximum of the new pay band, staff will assimilate to the next equal or higher pay point in the new pay band.” (ET Reasons, paragraph 22)

8. Working on the basis that the Claimant was on a salary of £24,629, she was placed on the next highest pay point on the Band 7 Agenda for Change pay scale, increasing her salary to £25,628. The reference to an initial salary of £25,584 in the Claimant’s contract was, as the Respondent stated, simply an error. In any event, it made no difference to the implementation of Agenda for Change: the next highest pay point would still have been £25,628. Once the Claimant’s pay was changed to that level and any backdating had taken place - which the Respondent said had occurred by March 2006 - there was no continuing discrepancy. In any event, the Claimant did not complain she was receiving too little; by accepting her salary, she was (the ET found) impliedly agreeing to it. Upon being told the outcome of the job matching exercise in December 2005, she neither appealed nor complained about this or about her salary going forward. Thereafter, consistent with Agenda for Change terms, she moved up one incremental point per year until September 2013 when she reached the top of her pay band.

9. The ET also made findings about the Claimant’s employment with the Respondent relevant to other claims before it which do not concern me at this stage. Suffice to say, the Claimant’s employment ended on 21 May 2014 when she was dismissed on capability grounds.

10. On the Claimant’s complaints relevant to this appeal, the ET accepted the Respondent’s evidence that she was correctly placed within Band 7 on the implementation of Agenda for Change: although there was a mistake in her contract under Whitley terms, that had no detrimental effect on her pay point under Agenda for Change. In terms of the comparator for the Claimant’s equal pay claim - Mr Wheeler - whilst he was engaged on like work and was on a higher pay point than the Claimant, that was because he had nine years’ previous NHS experience and had additional responsibilities and experience: there were genuine material factors justifying the disparity in pay. The ET made similar findings relating to the race discrimination comparators: any difference in pay was justified. None of those findings are challenged by the sole ground of appeal before me. The ET noted that the Claimant also considered she should have been on a higher grade because she had obtained a Masters degree during 2013, but there was nothing in Agenda for Change to allow an increase in pay point for additional qualifications. As for her claim that she was underpaid during her notice period, the Claimant had led no evidence to make good that complaint, which was also dismissed.

The Appeal and Submissions

11. I have set out above the sole ground of appeal before me and it is important I keep that in mind as the Claimant has sought to resurrect points rejected by the ET, which were not permitted to proceed.

The Claimant’s Submissions

12. The Claimant contends she accepted a contract with the Respondent with a starting salary level of £25,584 per annum, to be paid pro rata. When she received any less than this, she says she complained and she has taken me to an email exchange to corroborate that, albeit it is not a finding made by the ET. She says she was reassured at that time that things would be rectified on implementation of Agenda for Change. She further says that, on preparing for the ET hearing, she saw a document disclosed by the Respondent that had originally referred to her appointment as being at salary mid-point, but that had been struck through, and in manuscript, there had been added “Point 1, £25,584”. The Claimant says that makes good her case that the Respondent breached its contractual obligation to pay her at mid-point.

13. The Claimant also relies on her skills, experience and career history as compared to her comparators, including those relied on for her race discrimination claim, as justifying her argument that she should have been more highly placed on the Band 7 pay scale on assimilation under Agenda for Change. She says the Respondent’s error was in treating her as a new starter when it knew that was not the case and the ET, in turn, had been wrong to accept the Respondent’s contentions on this. By putting her on the very lowest entry point, that fed into her pay level under Agenda for Change, and that was the real explanation for the difference between her and her comparators: they had not been treated as new starters and their qualifications and experience were taken into account in a way that hers were not. The Claimant should in fact have started on Agenda for Change terms. She should not have been treated as a new starter; account should have been taken of her previous experience and qualifications, which would properly have put her on a pay level of over £40,000 per annum.

The Respondent’s Case

14. The Respondent contended that the issue of the mistake in the Claimant’s starting salary (amounting to an unlawful variation, unauthorised deduction or fundamental breach of contract) never formed part of her pleaded case before the ET, and did not feature in the list of issues. The Claimant should not be permitted to raise these points for the first time on appeal.

15. In any event, the ET did not err in law. The contractual mistake issue was expressly addressed: the ET found the Respondent had applied the correct starting salary, which was accepted by the Claimant and made no difference as to where she was placed on the scale for the purposes of Agenda for Change. There was no unauthorised deduction of wages: the Claimant was placed on the correct starting salary point under Whitley and the correct pay point under Agenda for Change. In any event, any claim would have been out of time.

The Relevant Legislative Provisions

16. It is worth first setting out the legislative provisions referenced in the ground of appeal, as that helps to identify the claims that the Claimant says were impacted upon by what she calls a unilateral breach of contract (but which the Respondent characterises as a mistake).

17. She refers to the Equality Act 2010 (“the EqA”) Part 5, Chapter 3, which is concerned with sex discrimination in respect of contractual terms and conditions (“equality of terms”). Section 66 sets out the equality clause to be implied into the terms of employment; section 67 sets out the equality rule to be implied into an occupational pension scheme. Reference is also made to Part 9 EqA, which is concerned with enforcement. Subsections 130(4)(a) and (b) deal with time limits in equality of terms cases; specifically, concealment cases - where the employer deliberately concealed a relevant matter from the employee, who did not know and could not with reasonable diligence discover that fact until after the time limit. Part 10, section 142 deals with unenforceable terms (attempts to contract out of rights provided by the EqA).

18. The Claimant further refers to Part II Employment Rights Act 1996 (“the ERA”), which concerns the protection of wages and includes the right not to suffer unauthorised deductions. Then, Part X ERA, which deals with termination of employment and references the right of an employee to minimum notice.

19. For completeness, although not referenced by the ground of appeal, I also refer to section 23 ERA, which lays down a three month time limit for an unauthorised deductions claim; providing that where a series of deductions is relied on, time will run from the date of the last deduction or payment in the series.

Discussion and Conclusions

20. The first issue that arises is whether any of the matters raised by this ground of appeal were in fact included as issues before the ET.

21. As regards her claim of equal pay (equality of terms), the Claimant’s case before the ET related to her basic salary. I am unable to see that any complaint under section 67 (relating to occupational pension schemes) was thereby identified. Moreover, the Claimant was not relying on a mistake in her pay but on her contention that she was entitled to be paid at the middle point of the scale because that was the level at which her comparators were paid (and, for the equal pay claim, only the male comparator Mr Wheeler was identified). I would, therefore, be inclined to agree with the Respondent: the equal pay case before the ET was not put on any basis that could arise from the ground of appeal before me. The mistake referenced by that ground could not impact on the Claimant’s equal pay case before the ET; it is irrelevant to it.

22. Even if I were wrong about that, the ET found the Respondent had made good its defence of material differences as between the cases of the Claimant and Mr Wheeler (and, indeed, the race discrimination comparators). Mr Wheeler was paid at a higher level on the scale because he had more NHS experience than the Claimant and undertook greater responsibilities than she. The ground of appeal permitted to proceed does not challenge those findings and thus does not impact on the ET’s conclusion in that regard. That being so, the other provisions of the EqA - going to time limits - simply do not arise.

23. I turn then to the unauthorised deductions case. The Respondent contends the ET’s record of the issues makes clear the complaint was in fact about a series of unauthorised deductions following the Claimant’s assimilation onto Band 7; a reference to her progression up the Band 7 pay scale as opposed to her starting salary before she was assimilated under Agenda for Change. The ground of appeal does not therefore reflect the argument put below. I am not sure that is necessarily correct. The reference back to “underpayments arising from the above facts” (see the ET’s paragraph 4.3, as set out above) might be read as referring to the original pay under Whitley terms. It seems to me that the point is not entirely clear.

24. That said, even if I were thus to assume in the Claimant’s favour that this point had been raised below, I cannot see where it can go. On the ET’s findings, even if the Claimant had initially been entitled to be paid - as her contract said - £25,584 (so the Respondent’s mistake had given rise to a contractual entitlement), on the ET’s finding, that made no difference to where the Claimant was placed on the relevant scale under Agenda for Change. If there was a contractual entitlement to a slightly higher salary prior to December 2005 (or, more specifically, to March 2006, when the full arrears of the Claimant’s entitlement had been paid; or even 2009, which is what the Claimant says was the relevant date) and thus the shortfall between that entitlement and the sum actually paid amounted to an unauthorised deduction, that ceased as from the Claimant’s assimilation onto Agenda for Change, and no claim was lodged, as it would have needed to have been, within three months of the date of the last deduction.

25. That has to be an answer to any possible appeal on this basis. It assumes all other points in the Claimant’s favour, and I am certainly not persuaded that would be right. It would mean ignoring the ET’s finding that the Claimant was paid the correct amount under Whitley from the first (the error in her contract of employment was just that: an error) and its finding that she had accepted the salary paid without complaint, thus impliedly agreeing to it as an alteration to what was formerly stated on her contract. What is, however, apparent is that the point raised by the appeal could not have succeeded even if the ET had in some way misunderstood the Claimant’s case such as to undermine its findings adverse to her on these points.

26. Finally, as to the Claimant’s claim under the notice provisions of the ERA, the simple point is that she simply did not make good any basis of claim before the ET. The appeal cannot rectify that failing. And again, giving the Claimant the benefit of all possible doubt, this can go nowhere. On the ET’s findings, the Claimant was paid her full entitlement under Agenda for Change. There was no shortfall in her pay during her notice period. Any initial error in pay - if that is what it was - ceased from the date she was fully assimilated onto Agenda for Change scales (whether that be December 2005, March 2006 or at some point in 2009). The appeal solely relates to an issue arising in the short period between the Claimant’s starting employment with the Respondent and the implementation of Agenda for Change in her case. That is not a matter that gives rise to any proper basis of claim (let alone appeal) for breach of contract arising on the termination of her employment.

27. In addressing these points, I have proceeded on the basis that the unilateral variation relied on by the Claimant relates to the mistake found by the ET as referenced at paragraph 23 of its Reasons. That seems to me what was understood to have been in issue by Singh J, who permitted this matter to proceed to a Full Hearing. The Claimant’s case before me has, however, expanded the possible interpretation of the ground of appeal to include an argument that under Agenda for Change she should have been placed on the mid-point of the Band 7 scale and the Respondent’s initial mistake fed into that, thus continuing the error (or, on her case, the unilateral breach of contract). That is a way of putting the argument that I cannot see can arise on the findings of the ET. Specifically, the ET expressly found the Claimant was (paragraph 84) “correctly placed within band 7 on the implementation of Agenda for Change”. Whether described as an error or unilateral variation, the ET expressly found the earlier discrepancy - by which it is plainly referring to the difference between the amount stated on the Claimant’s contract and the amount she was actually paid - ceased to have any relevant impact once the Claimant was assimilated onto Agenda for Change pay scales:

“84. … The mistake made in her contract (under the previous terms) had no bearing or detrimental effect on her pay point under Agenda for Change. The Tribunal find that the process was entirely objective and based on prescribed criterion. The Tribunal particularly notes that the Claimant made no complaint at the time or at any time until these Tribunal proceedings about her pay.”

28. Thus, whilst accepting the Claimant’s sense of grievance, whichever way her case is analysed, I am satisfied that no error of law has been identified and I dismiss the appeal.

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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Yovonie v East Sussex Healthcare NHS Trust (Equal Pay Act) [2016] UKEAT 0240_15_2502 (25 February 2016) URL: http://www.bailii.org/uk/cases/UKEAT/2016/0240_15_2502.html Cite as: [2016] UKEAT 0240_15_2502, [2016] UKEAT 240_15_2502

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