Appeal No. UKEAT/0616/11/DM
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At the Tribunal On 26 June 2012
Judgment handed down on 6 November 2012
Before
THE HONOURABLE MRS JUSTICE SLADE DBE
(SITTING ALONE)
KINGSTON UPON HULL CITY COUNCIL APPELLANT
(1) MR P SCHOFIELD (2) MR C MORRIS
(3) MRS J WEBSTER RESPONDENTS
Transcript of Proceedings
APPEARANCES
For the Appellant MR ROGER QUICKFALL
(of Counsel) Instructed by:
Kingston Upon Hull City Council Legal Services
The Guildhall Alfred Gelder Street Hull
HU1 2AA
For the Respondents MR STEPHEN McNAMARA
(of Counsel) Instructed by:
Bridge McFarland Solicitors 1-9 Tentercroft Street Lincoln
Lincolnshire LN5 7DB
SUMMARY
UNLAWFUL DEDUCTION FROM WAGES
The Claimants claimed that the Respondent had wrongly evaluated their jobs under the applicable
job evaluation scheme. They contended that properly evaluated they would have been awarded
higher scores entitling them to a higher Grade, (Grade 7 or 8). They brought claims for deduction
from wages under the Employment Rights Act 1996 section 13. The Claimants’ claims were for
damages not for sums which were ascertained or ascertainable. The exercise of job evaluation or
assessing whether or not the job evaluation had been carried out properly was not the
determination of an issue of fact nor was it one which the Employment Tribunal has jurisdiction to
undertake in determining a claim under ERA section 13. Coors Brewers Ltd v Adcock and
others [2007] IRLR 440 applied.
Properly directing himself the only decision open to the Employment Judge was that the ET had
no jurisdiction under ERA section 13 to determine the Claimants’ claims. Appeal allowed and
claims of unlawful deduction from wages dismissed.
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THE HONOURABLE MRS JUSTICE SLADE
1. Kingston Upon Hull City Council appeal from the judgment of an Employment Judge
(‘EJ’) following a Pre-Hearing Review (‘PHR’) on 23 June 2011 with reasons sent to the
parties on 20 July 2011, that the claims by Mr Schofield, Mr Morris and Mrs Webster of
unlawful deduction from wages pursuant to the Employment Rights Act 1996 (‘ERA’)
sections 13 and 23(1)(a) had a “better than little reasonable prospect of success”. The claims
were therefore not struck out. The parties will be referred to as Claimants and Respondent,
their titles before the EJ.
2. The Respondent contended that the EJ erred in law in failing to strike out the Claimants’
claims, either for want of jurisdiction or on the basis that the claims had no reasonable
prospects of success, as initially indicated in a Strike Out Warning of 9 December 2010.
The Relevant Facts
3. The claims arose from challenges by the Claimants to the evaluation by the Respondent
of their jobs. The evaluations were undertaken as part of the introduction of Single Status with
effect from 1 May 2004. They claim that their jobs were wrongly evaluated and that the
difference in pay which results from the higher evaluation which they claim should have been
given is a wrongful deduction in pay.
4. The EJ did not give an outline of the relevant facts, save to record that all three
Claimants were employed by the Respondent, that Mrs Webster took voluntary redundancy in
early 2011, that “a salary review process had been ongoing for some five years” and that “the
UKEAT/0616/11/DM 5. On the sift, Underhill P observed that neither the Reasons nor the Notice of Appeal
identifies the facts giving rise to the claims. He ordered the Respondent to lodge a draft
statement of facts and the Claimants an answer including a statement of whether the
Respondent’s statement of facts is accepted.
6. From the Statements of Facts served in accordance with the Order of Underhill P, it
appears that the Claimants were employed in the Respondent’s Social Care and Health Service
department. Their contracts of employment incorporated national collective agreements,
negotiated by the National Joint Council for Local Government Services, the National
Agreement on Pay and Conditions of Service known as the Green Book, and local agreements
reached with the trade unions recognised by the Respondent and by the Respondent’s decisions
as amended from time to time.
7. Following consultation and negotiation with recognised trade unions, the Respondent
decided to implement a new pay and grading structure under a job evaluation scheme and to
adopt in further consultation with trade unions, an internal appeals procedure against decisions
made under the job evaluation scheme.
8. The new job evaluation scheme was introduced with effect from 1 May 2004. A
procedure for dealing with appeals arising from job evaluation was implemented on 1 May
2004 (‘the Appeal Procedure’). The Appeal Procedure consisted of 3 stages: Stage 1 – Informal
Consideration, Stage 2 – Formal Appeal Panel and Stage 3 – Final (Quality Checking) Appeal
Panel. A Dispute Resolution Job Evaluation Appeals Procedure implemented on 1 September
2006 and amended on 1 November 2007 (‘the Dispute Resolution Procedure’) provides for a
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a further appeal has been notified. The document sets out the procedure for Stages 3 and 4.
The material provision of Stage 4 is:
“5. Stage 4: Final Appeal Panel.
5.2. The scope of the Panel will be to consider:
‘Disputes concerning the ‘technical’ aspects of the evaluation relating to their job i.e. factor scores have been incorrectly applied.’”
The Appeal Procedure provided that the Final Appeal Panel will comprise two representatives
from management and one Trade Union Convenor. The Appeal panel can support or not
support the employee’s appeal. If it is supported, the case will be referred back to the Job
Evaluation Team to be checked taking into account the points raised by the Panel. The result of
the evaluation check with the same or an amended score will be submitted to the same Panel
for agreement. The outcome may be that the employee’s job is given a higher, lower or the
same grade.
9. The evaluation of the Claimants’ jobs in 2004 resulted in a decrease in salary. The
Claimants appealed. They were given new job descriptions and job titles (Performance
Information Analyst). The appeals resulted in an increase in grade to Grade 6. The Claimants
were paid in accordance with the rate for Grade 6 with retrospective effect from 1 May 2004.
The Claimants were not content with their re-grading and pursued further stages of appeal. The
Claimants asserted that they:
“…highlighted a potential further 111 points which their roles should have attracted and which, if attached to the roles, would have placed them in a Grade 8 position or in the alternative, a Grade 7 position at the very least.”
The fourth and final stage appeal was heard on 27 October 2010 and was dismissed.
10. On 7 September 2010, prior to the Stage 4 appeal, Mr Schofield submitted a grievance.
UKEAT/0616/11/DM case was referred to an independent job evaluator. On 14 January 2011, Mr Schofield received
job evaluator’s report agreeing with the evaluation of Grade 6. Mr Schofield challenges the
independence of the evaluator.
11. By their ET1, in answer to the question what remedy they were seeking, the Claimants
stated:
“For the post to be evaluated properly and to be upgraded as per that evaluation.”
The Judgment of the Employment Judge
12. The EJ recorded that the Claimants’ representative admitted that in order to decide the
deduction from wages claim:
“…there had to be a re-valuation of the job evaluation process and that the Tribunal would have to undertake the task of deciding what was properly due to the Claimants.”
13. The EJ referred to the authorities of Bruce and Others v Wiggens Teape (Stationary)
Limited [1994] IRLR 536 and Delaney v Staples [1991] IRLR 112 in support of the
uncontroversial proposition that paying an employee less than the amount of wages properly
payable to him is a deduction from wages within the meaning of ERA.
14. The EJ held:
“9. Applying the relevant provisions of Sections 13-27 and the decisions in the two cases I have mentioned above, it appears to me that the test for an Employment Tribunal would be to determine what monies were properly payable to the Claimants in this case.
10. ‘Properly payable’, in my view, includes the consideration of whether or not the job evaluation process had been undertaken correctly or incorrectly. As Mr McNamara pointed out, there is some irony in the fact that, if the Claimants had resigned and claimed constructive dismissal, then the Tribunal could not put itself in the place of the employer, but in this case, it is apparent that that is exactly what a Tribunal will have to do.
11. It appears to me that the process that a Tribunal will have to go through in determining what was properly due to the Claimants is going to be somewhat long and complicated. However, I believe that these issues can be overcome by judicious case management.
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12. There are clearly facts in dispute here between the Claimants and the Respondent in terms of what they say the evaluation should have resulted in. Therefore, it seems to me that there is a clear dispute of fact that has to be resolved by an Employment Tribunal, and therefore I will make appropriate Case Management Orders in respect thereof.”
15. The EJ held that “the Claimants’ claims of unlawful deduction from wages have better
than little prospect of success and therefore shall proceed to a Hearing”. At the Case
Management Discussion immediately following the hearing, the EJ made Orders including that:
“Both non-legal members for the hearing should be from a public sector or local authority background with experience of job evaluation processes.”
The Relevant Statutory Provisions
16. Employment Rights Act 1996:
“Part I
Section 13 – Right to not suffer unauthorised deductions.
(1) An employer shall not make a deduction from wages of a worker employed by him… (3) 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.
Section 23 – Complaints to employment tribunals.
(1) A worker may present a complaint to an employment tribunal—
(a) that his employer has made a deduction from his wages in contravention of section 13….
Section 27 – Meaning of “wages” etc.
(1) In this Part “wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including—
(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise.”
Equality Act 2010:
“(1) For the purposes of this Chapter, A's work is equal to that of B if it is— (a) …
(b) …
(c) of equal value to B’s work.
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(a) neither like B's work nor rated as equivalent to B's work, but
(b) nevertheless equal to B's work in terms of the demands made on A by reference to factors such as effort, skill and decision-making.”
Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (‘the ET Regulations’):
“Reg. 8 – Panels of members of tribunals – general.
(1) There shall be three panels of members of Employment Tribunals (England and Wales), as set out in paragraph (3).
…
(3) The panels referred to in paragraphs (1) and (2) are:- …
(b) a panel of persons appointed by the Lord Chancellor after consultation with such organisations or associations of organisations representative of employees as he sees fit; and
(c) a panel of persons appointed by the Lord Chancellor after consultation with such organisations or associations of organisations representative of employers as he sees fit. …
(5) The President may establish further specialist panels of chairmen and persons referred to in paragraphs (3)(b) and (c) and may select persons from such specialist panels in order to deal with proceedings in which particular specialist knowledge would be beneficial.”
Reg. 16
(4) in proceedings which involve an equal value claim (as defined in Rule 2 of Schedule 6) Schedule 1 shall be modified in accordance with Schedule 6.”
Schedule 6 sets out detailed steps to be taken by ETs conducting equal value hearings. These
include deciding whether an independent expert from a panel of experts should prepare a report.
The Submission of the Parties
17. Mr Quickfall, counsel for the Respondent, referred to the judgments of the Court of
Appeal in Coors Brewers Ltd. V Adcock and others [2007] IRLR 440, New Century
Cleaning Co. Ltd. V Church [2000] IRLR 27 and Allsop v Christiani and Nielsen Ltd (In
Administration) UKEAT/0241/11/JOJ in support of the proposition that in order to show that
there has been an unlawful deduction from wages within the meaning of ERA section 13,
Claimants have to be able to point to a legal obligation to be paid a quantified or quantifiable
UKEAT/0616/11/DM quantifiable sum the Claimants would have to establish that their jobs were evaluated with a
score which gave them a pay grade entitling them to a certain salary. Their jobs had not been
given the scores entitling them to the salaries claimed. The Claimants contended and the EJ
held that the ET should determine the grades they should have been awarded had the
Respondents carried out the evaluation of their jobs properly. This would involve the ET
putting themselves in the place of the employer: they would undertake the evaluation of the
jobs in accordance with the Respondent’s job evaluation scheme. The EJ held that this was a
task for the ET to undertake in order to decide what was properly due to the Claimants. Mr
Quickfall contended that the Claimants had not shown that they were entitled to wages in a
quantified or quantifiable sum.
18. Insofar as the Claimants seek to rely on the dictum of Mummery LJ in paragraph 48 of
Capek v Lincolnshire County Council [2000] IRLR 590 that:
“The resolution of the issue of what is ‘properly payable’ may involve a decision by a Tribunal on the contractual rights and duties of the parties to a contract of employment affecting entitlement of wages such as entitlement to overtime or to re-grading.”
Mr Quickfall pointed out that Capek predates Coors by seven years. In Coors Wall LJ
observed at paragraph 56:
“Part II of ERA, as I read it, is essentially designed for straightforward claims where the employee can point to a quantified loss. It was designed to be a swift and summary procedure. Of course such claims would throw up issues of fact. The example canvassed in argument was of an employee being paid piece work, and asserting that his employer had deducted sums properly payable to him for work undertaken on the grounds that some of the items produced by the employee were defective. Delaney v Staples provides another example. Such a dispute would not take the case outside Part II of ERA 1996.”
Mr Quickfall drew attention to the observation of Wall LJ at paragraph 49 that the approach in
Coors was not inconsistent with the majority of the Court of Appeal in New Century Cleaning
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Futures SA [2008] AER (D) 224 (Jan). In Allsop v Christiani and Nielsen Ltd (In
Administration) UKEAT/0241/11/JOJ Cox J observed that the Part II ERA regime was:
“…designed for straightforward claims where the employee can show that he has not been paid quantified or quantifiable sums properly due to him under his contract. It cannot be used as the vehicle to advance claims for damages for breach of contract, consequent, for example, upon the non-exercise or allegedly capricious exercise of a contractual discretion.”
19. Mr Quickfall submitted that the Claimants in this case are not challenging the job
evaluation scheme, they contend that they should have been given a different score under the
scheme. He contended that the answer to the Claimants’ submissions is provided by paragraph
25 of the judgment of the EAT in Whitmore v Commissioners of Inland Revenue [2003]
AER (D) 514 (Oct) in which it was held:
“We accept that the two causes of action or heads of claim are different and that there may be situations in which a breach of contract claim could not on any view, be said to be also a wrongful deduction claim. One example might be a claim that, because an employer had failed to carry out a re-grading exercise which on the employee’s case would or could have resulted in his being entitled to a greater remuneration, the employee had not received what, had there been no breach of contract he would have received. Such a claim would appear to be only capable of being put as a claim for damages for breach of contract.”
If, however, there was no issue as to what the result of the job evaluation would be, a claim for
deduction from wages arising from a failure to carry out a job evaluation to which the employee
was entitled could fall within ERA Part II.
20. It is common ground as can be seen from paragraph 31 of the Claimants’ skeleton
argument that if the claims are for unquantified damages for breach of contract, then they do
not fall within the ambit of Part II of the ERA, such that the ET has jurisdiction to entertain
them.
21. Mr Quickfall submitted that the exercise of job evaluation is not within the scope of a
UKEAT/0616/11/DM unable to show that they are owed money. The result of re-evaluation may be to reduce, retain
or increase the existing evaluation. The Claimants are uncertain how much they are claiming:
they contend for an increase in grade to Grade 7 or to Grade 8. The claims are therefore for an
unquantified loss. These are the features found by Chadwick LJ in Coors to make it impossible
to hold that such claims can be brought pursuant to Part II ERA as deduction from wages
claims.
22. Mr Quickfall contended that the Claimants are simply unable to point to a particular
amount they are owed. The claims can only properly be regarded as claims for the loss of a
chance of an upgraded salary on the basis that there is a chance of re-evaluation which would
allocate their jobs to a higher grade. The claims are outside the jurisdiction of the ET.
23. Mr Quickfall submitted that for all these reasons or any of them, the claims should have
been dismissed by the EJ. He asks this EAT to do so.
24. Mr McNamara counsel for the Claimants submitted that it is not disputed that they had
an entitlement to re-grading under the Respondent’s job evaluation programme. It is a short
step to say that they are entitled to an accurate re-grading. He stated that the crux of the
Claimants’ case was that their re-grading was inaccurate. Their job evaluation scores should
have been increased by one hundred and eleven points. The Claimants complain about the
manner in which the evaluation and the appeal process were carried out. If they had been
carried out as the Claimants contend they should, the outcome would have been different. Mr
McNamara stated that all the ET is asked to do is to evaluate the Claimants’ jobs and to reach a
grading. He submitted that the contractual appeals process would have to be completed before
the Claimants could ask the ET to undertake a re-grading. It has been completed. If the
UKEAT/0616/11/DM ET to carry it out would be outside the scope of the ERA. However a complaint about a failure
by the Respondent to carry out the re-grading accurately was within the scope of the ERA.
25. Mr McNamara contended that the Claimants’ claims are comparable to that of Mrs
Whitmore. She had complained that a failure to pay her typing proficiency payments was a
deduction from wages. The Inland Revenue said that her change of post from one which
attracted such payments was voluntary and therefore she was not entitled to any such payments
after that change. She would have been entitled to such payments if the transfer had been
compulsory. Mr McNamara relied on the judgment in Whitmore in which the EAT held at
paragraph 26:
“…in cases in which the employee asserts that he or she should have been paid monies to which he or she was contractually entitled, the claim can be put both in debt as a claim for monies due, i.e. because those monies due had not been paid that has been a wrongful deduction, or series of deductions and in damages as monies lost by reason of the employer’s breach of contract in failing to pay, i.e. a claim there has been a breach or series of breaches of contract falling within the 1994 Order.”
26. Accordingly Mr McNamara submitted that the EJ did not err in holding that the ET had
jurisdiction to hear the Claimants’ deduction from wages claims.
Discussion
27. There is broad agreement between the parties as to the principles applicable to claims
falling within ERA section 13 so that an ET has jurisdiction to determine them under section
23. The Claimants must establish that the Respondent has not paid them wages to which they
have a legal entitlement whether payable under their contract or otherwise. In order to fall
within section 13, the claim must be for a specific sum of money or a sum capable of
quantification which has not been paid by the employer. Sums claimed by way of damages
UKEAT/0616/11/DM continuing in employment must be brought in the courts as ETs have no jurisdiction to hear
them. Claims brought by former employees for the recovery of damages can only be brought in
an ET if they arise or are outstanding on the termination of their employment. The jurisdiction
to hear such claims is conferred by the Employment Tribunals Extension of Jurisdiction
(England and Wales) Order 1994.
28. It is uncontroversial that in order to determine what is “properly payable” to an
employee an ET may have to determine issues of fact. It is on the question of whether what the
EJ identified as the question for an ET in this case is a dispute of fact at all or an issue of fact of
the type contemplated in Capek, Coors, New Century Cleaning and Whitmore that the
parties to this appeal part company.
29. In my judgment there is no inconsistency between Capek and Coors. Mummery LJ
identified the main issue on appeal in Capek as whether “contract claims” were outside the
jurisdiction of the 1994 Order. Amongst many claims made in Capek was one in respect of
management failure to conduct a proper re-grading evaluation or assessment. The ET did not
consider the point raised in a cross-appeal, whether the claims were of a kind which involved
unauthorised deduction from wages which they had jurisdiction to entertain under section 13. It
was in this context that Mummery LJ observed at paragraph 48 that:
“The resolution of the issue of what is ‘properly payable’ may involve a decision by the tribunal on the contractual rights and duties of the parties to a contract of employment affecting entitlement to wages such as entitlement to overtime or to re-grading.”
30. At paragraph 50 Mummery LJ observed that the ET had not considered whether the
alleged breaches of contract were of a kind which fell within the deduction from wages
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“51. …necessary for the employment tribunal to investigate the factual and legal position as to alleged deduction from wages.”
The reference by Mummery LJ in paragraph 48 to entitlement to re-grading does not support
the contention by Mr McNamara that, applying Capek an ET can carry out a job evaluation to
ascertain the number of points to be attributed to a Claimant’s job under a particular scheme.
Capek was remitted to the ET to decide whether the claim fell within ERA section 13.
31. In my judgment the observations of Mummery LJ in Capek are not inconsistent with
the earlier judgment of the Court of Appeal in New Century Cleaning Co. Ltd v Church
[2000] IRLR 27. Morritt LJ in the majority decision of the Court of Appeal, held at paragraph
46 that the fact that the amount of an employee’s bonus claimed as a deduction from pay
depended upon the agreement reached between the employee with a third party and was
uncertain, prevented the ascertainment of a wage payable on a particular date. Therefore the
claim did not fall within ERA section 13. In all subsequent cases in which the issue of whether
a claim falls within the deduction from wages jurisdiction has arisen, the determining factor has
been whether the employee can identify a specific ascertained or ascertainable sum of wages
which is payable.
32. In Whitmore v Commissioners of Inland Revenue EAT/0727/02/MAA 1 April 2003,
an ET had held that a claim by a typist for a proficiency payment fell outside the jurisdiction of
ERA section 13. The entitlement depended upon whether she had been moved to clerical duties
compulsorily or voluntarily. If Ms Whitmore had been moved compulsorily she would have
been entitled to the payment. The EAT observed at paragraph 19 that paragraph 48 of
Mummery LJ’s judgment in Capek appeared to reproduce what the Court of Appeal had said
earlier in Delaney. The EAT in Whitmore went on to hold of breach of contract and unlawful
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“25. …We accept that the two causes of action or heads of claim are different and that there may be many situations in which a breach of contract claim could not, on any view, be said to be also a wrongful deduction claim. One example might be a claim that, because an employer had failed to carry out a re-grading exercise which on the employee’s case would or could have resulted in his being entitled to a greater remuneration, the employee had not received what, had there been no breach of contract he would have received. Such a claim would appear to be only capable of being put as a claim for damages for breach of contract. There could be no claim in debt in those circumstances. Many other examples can be easily imagined.”
In Whitmore the EAT held that the ET should have asked: “Is this in substance a claim, not
only for breach of contract but also a claim for unlawful deduction of wages”. The EAT held
that the only answer was yes and substituted a decision to that effect.
33. The ET in Coors considered claims by employees that there had been breaches by their
employer of an obligation to put in place a share scheme with equivalent benefits to one they
had enjoyed before the transfer of ownership of their employer. The Court of Appeal
considered their appeals on the basis that the Claimants had claims for breach of contract.
Chadwick LJ held at paragraph 70:
“It follows that it is impossible to hold that, if the employer company had met the requirement imposed on it by the claimants’ employment history, the amount of the wages paid to any individual claimant on the relevant date for payment of benefits accrued in respect of the year 2003 would have been greater than the amount of the wages actually paid to that claimant on that date. The most that can be said is that it might have been. And, accepting that it might have been, it is impossible to say by how much the amount of the wages actually paid was less than the amount that would have been properly payable if the employer company had met the requirement to put in place a substitute scheme which, properly and fairly operated, would be capable of replicating the benefits of the BEPSS scheme. It is that feature which, to my mind, makes it impossible to hold that there has been a “deduction from wages” for the purposes of Part II of the 1996 Act.”
34. In considering and rejecting the argument that the amount payable to employees if a
share incentive scheme had been properly implemented fell to be determined by an ET under
their deduction from wages jurisdiction, Wall LJ held:
“46. In my judgment, the underlying facts of Delaney v Staples are a paradigm of the circumstances in which Part II of ERA 1996 is designed to operate. The employee complains that there has been an unlawful deduction from his wages. He has not been paid an identified sum. He makes a claim under Part II. The employer may have a number of defences. Those defences may raise issues of fact. Those issues will be for the tribunal to determine. But the underlying premise on which the case is brought is that the employee is owed a specific sum of money by way of wages which he asserts has not been paid to him. That, it seems to me, is the proper context both of Delaney v Staples and Part II of ERA 1996.
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47. The answer to the passage on which Mr Basu relied is, in my judgment, to be contained in an earlier part of Nicholls LJ’s judgment at [1991] IRLR 112 at 114, where he says:
‘The Act is, indeed concerned with unauthorised deductions. But s.8(3) makes plain that, leaving aside errors of computation, any shortfall in payment of the amount of wages properly payable is to be treated as a deduction. That being so, a dispute, on whatever ground, as to the amount of wages properly payable cannot have the effect of taking the case outside s.8(3). It is for the industrial tribunal to determine that dispute, as a necessary preliminary to discovering whether there has been an authorised deduction.’
52. …In my judgment, the highest the case can be put for the Claimants is that Coors was under an obligation to put in place a scheme which, properly and fairly operated, was capable of replicating the benefits of the BEPSS scheme. Whichever way one examines the case, however, the result is that that any payment due to the workforce under the 2003 incentive scheme was incapable of quantification in the Delaney v Staples sense.
56. Part II of ERA 1996 as I read it, is essentially designed for straightforward claims where the employee can point to a quantified loss. It was designed to be a swift and summary procedure. Of course such claims would throw up issues of fact. The example canvassed in argument was of an employee being paid piece work, and asserting that his employer had deducted sums properly payable to him for work undertaken on the grounds that some of the items produced by the employee were defective. Delaney v Staples provides another example. Such a dispute would not take the case outside Part II of ERA 1996.”
The Court of Appeal rejected the argument that the Claimants’ claims arising from what they
contended was a failure to introduce a replacement share incentive scheme consistent with the
employer’s contractual obligations fell within ERA. In Tradition Securities and Futures SA
v Mr A Mouradian UKEAT/0570/07/RN 29.01.2008 after referring to New Century
Cleaning, Coors and Delaney HH Judge Clark held at paragraph 15:
“The critical point which emerges from those cases, particularly Adcock, is that a claim under Part II is not appropriate where recovery of an unquantified sum is sought; that is a claim properly brought for breach of contract and where employment is continuing that must lie in the civil courts, not the Employment Tribunal.”
35. Cox J in Allsop v Christiani and Nielsen Ltd (In Administration)
UKEAT/0241/11/JOJ 14 March 2012 recently observed the necessary precondition to be
satisfied for a claim to fall within ERA section 13:
“75. In considering whether the claims originally pleaded fell within the unlawful deduction regime, the Employment Judge rightly directed himself to the leading case of Coors. As the court in that case made clear, this regime is designed for straightforward claims where the employee can show that he has not been paid quantified or quantifiable sums properly due to him under his contract. It cannot be used as the vehicle to advance claims for damages for breach of contract, consequent, for example, upon the non-exercise or allegedly capricious exercise of a contractual discretion.”
UKEAT/0616/11/DM 36. The decisions in these cases are consistent with the majority of the Court of Appeal in
Coors as to the need for a claim to be for a quantified or quantifiable sum for it to fall within
ERA section 13. Were the claims by the Claimants in the current appeal so quantified or
quantifiable? It is clear from the Claimants’ case that their claims were not quantified. The
basis of their claim was that the Respondent should have awarded them a higher number of
points under their Job Evaluation Scheme. They claimed that if there had been what they
alleged was a proper evaluation they would have been placed on Grade 8 or at least Grade 7.
Since their case depended upon a re-evaluation of their jobs they could not establish with any
certainty what the result would have been. It may have been Grade 8 or Grade 7 or even no
change to the evaluation of Grade 6 which has been given after exhaustion of all the appeal
steps.
37. In order to determine the question of the sum of wages which was properly due to a
Claimant on a particular date an ET may have to decide issues of fact. All the examples given
in the authorities of issues of fact which an ET may have to determine in order to decide
whether an employer has failed to pay an employee wages due to him are facts which are
relevant to and should have been taken into account by the employer in deciding how much
should be paid to an employee on a particular date. Amongst the examples of disputes of fact
to be resolved in determining a deduction from wages claim was that raised in argument in
Coors paragraph 56 whether items produced by an employee paid piece work were defective,
and in Whitmore whether the employee had transferred to a new post voluntarily or
compulsorily which was relevant to the Claimant’s entitlement to a typing proficiency payment.
38. The EJ identified as an issue of fact in these claims what value under the Job Evaluation
Scheme should have been ascribed to the Claimants’ jobs. It is apparent from paragraph 5 of
UKEAT/0616/11/DM material to be presented to them. The EJ was informed by Mr McNamara who appeared before
the ET as he did on appeal that:
“…the Respondent’s panels did not have all the information that they should have had in front of them and therefore there was a good possibility that the tribunal would be better informed.”
39. The value to be attributed to a job is a question of judgment not an issue of fact. In
contested equal value claims under equal pay legislation the parties’ experts may differ on the
value to be attributed to the same job although there is no dispute over the job content or
evaluation criteria. The EJ erred in holding that the resolution of a dispute of the value to be
attributed to the Claimants’ jobs was an issue of fact. Further, he erred in holding that the ET
had jurisdiction under ERA section 13 as he expressed in paragraph 10 to “put itself in the place
of the employer” and to determine the value to be attributed to the Claimants’ jobs. The Job
Evaluation Scheme adopted by the Respondent did not entitle an ET to conduct an evaluation
under the scheme. Nor is there any statutory power for an ET to conduct a job evaluation.
Under the Equality Act 2010 an ET has power to decide whether there has been a breach of an
equality clause. They may have to determine whether one person’s work is of equal value to
another’s. Detailed procedures are set out in the Employment Tribunals (Constitution and
Rules of Procedure) Regulations 2004 Schedule 6 for dealing with such claims. These
procedures do not apply to the determination of deduction from wages claims.
40. The EJ held in paragraph 11:
“It appears to me that the process that a Tribunal will have to go through in determining what was properly due to the Claimant is going to be somewhat long and complicated. However, I believe that these issues can be overcome by judicious case management.”
One of the Case Management Orders made on the 23 June 2011 was that:
“Both non-legal members for the hearing should be from a public sector or Local Authority background with experience of job evaluation.”
UKEAT/0616/11/DM
41. The Case Management Order indicated that the EJ recognised that job evaluation
requires specialist knowledge and experience. However counsel were agreed that the EJ had no
power to make the Order regarding the selection of the non-legal members of the ET. The
selection of lay members to sit on an ET panel is made by the President, Vice President or the
Regional Employment Judge in accordance with the ET Regulations 8(5) and 9(2).
Conclusion
42. The Claimants’ claims were for damages not for sums which were ascertained or
ascertainable. The EJ erred in holding that the claims were for sums which were ascertainable
by resolution of an issue of fact. The EJ envisaged that the assessment of whether the
Claimants’ jobs had been evaluated properly by the Respondent would require the ET putting
“itself in the place of the employer”. The exercise of job evaluation or assessing whether or not
the job evaluation had been carried out properly was not the determination of an issue of fact
nor was it one which the ET has jurisdiction to undertake in determining a claim under ERA
section 13.
43. Properly directing himself the only decision open to the EJ was that the ET had no
jurisdiction under ERA section 13 to determine the Claimants’ claims. Accordingly the appeal
is allowed and a decision substituted that the Claimants’ claims of unlawful deduction from