Abercrombie & Others v Aga Rangemaster Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Lord Justice Kitchin,The Chancellor of the High Court |
| Judgment Date | 11 October 2013 |
| Neutral Citation | [2013] EWCA Civ 1148 |
| Docket Number | Case No: A2/2012/2910 |
| Court | Court of Appeal (Civil Division) |
| Date | 11 October 2013 |
[2013] EWCA Civ 1148
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE SILBER
Royal Courts of Justice
Strand, London, WC2A 2LL
THE CHANCELLOR OF THE HIGH COURT
Lord Justice Kitchin
and
Lord Justice Underhill
Case No: A2/2012/2910
Oliver Segal QC and Charles Sparling (instructed by Thompsons LLP) for the Appellant
Nigel Porter (instructed by DLA Piper) for the Respondent
INTRODUCTION
This case concerns a claim for guarantee payments under Part III of the Employment Rights Act 1996 (which re-enacts provisions originally introduced by the Employment Protection Act 1975). Guarantee payments are, in broad terms, payments which an employer is required by statute to pay to employees who have been laid off or placed on short-time working because of a downturn in his business. They are of practical significance only in cases where the employer would not be required under the contract of employment to pay the employee for the days in question; generally the terms of the contract, properly understood, will in fact oblige him to do so, irrespective of the availability of work, so long as the employee is ready and willing to work. Perhaps for that reason cases about Part III (or its predecessor provisions) seem to be rare: it appears that this is the first to have reached the Court of Appeal.
It will be convenient to set out at the start the main relevant provisions of Part III.
(1) Section 28, which is headed "Right to Guarantee Payment", enacts the substantive right. It reads (so far as material) as follows:
"(1) Where throughout a day during any part of which an employee would normally be required to work in accordance with his contract of employment the employee is not provided with work by his employer by reason of—
(a) a diminution in the requirements of the employer's business for work of the kind which the employee is employed to do, or
(b) any other occurrence affecting the normal working of the employer's business in relation to work of the kind which the employee is employed to do,
the employee is entitled to be paid by his employer an amount in respect of that day.
(2) In this Act a payment to which an employee is entitled under subsection (1) is referred to as a guarantee payment.
(3) In this Part—
(a) a day falling within subsection (1) is referred to as a "workless day", and
(b) "workless period" has a corresponding meaning.
(4)-(5) …"
(2) Section 29 provides for certain exclusions from the right. I need only set out sub-section (4), which deals with the situation where the employer offers the employee alternative work. It reads:
"(4) An employee is not entitled to a guarantee payment in respect of a workless day if—
(a) his employer has offered to provide alternative work for that day which is suitable in all the circumstances (whether or not it is work which the employee is under his contract employed to perform), and
(b) the employee has unreasonably refused that offer."
(3) Section 30 provides for how the guarantee payment is to be calculated. The principal operative provisions are sub-sections (2) and (3). No issue arises as to them for present purposes, but I should set out the terms of sub-section (5) because it is relevant to one of the issues which we have to consider. It reads:
"If in any case an employee's contract has been varied, or a new contract has been entered into, in connection with a period of short-time working, subsections (2) and (3) have effect as if for the references to the day in respect of which the guarantee payment is payable there were substituted references to the last day on which the original contract was in force."
(4) Section 31 provides for various limits on the entitlement under section 28, including (by sub-section (1)) a cap, which was at the time material to the present claims set at £21.20. Sub-section (6) contains a similar provision to section 30 (5), covering the case where "an employee's contract has been varied, or a new contract has been entered into, in connection with a period of short-time working".
(5) Section 34 confers jurisdiction on the employment tribunal to determine claims for guarantee payments: it also provides for a three-month limitation period. It reads, so far as material, as follows:
"(1) An employee may present a complaint to an employment tribunal that his employer has failed to pay the whole or any part of a guarantee payment to which the employee is entitled.
(2) An employment tribunal shall not consider a complaint relating to a guarantee payment in respect of any day unless the complaint is presented to the tribunal—
(a) before the end of the period of three months beginning with that day, or
(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.
(2A) …
(3) Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall order the employer to pay to the employee the amount of guarantee payment which it finds is due to him."
Although the substantive issue in the underlying proceedings involves a straightforward question about the construction of section 28 (1), and/or its application to the circumstances of the present case, it comes wrapped in a miasma of procedural technicality which requires me to set out the history of the proceedings in laborious detail.
THE FACTS IN OUTLINE
The Claimants in these proceedings, who are the Appellants before us, were at the material times hourly-paid employees of the Respondent at its factory in Leamington Spa: they number about 330 1. They had a contractual working week of 39 hours, worked Monday-Friday. As a result of poor trading conditions the Respondent in late 2008 reached an agreement with the recognised trade union, the GMB, (confirmed by a ballot) for a reduction in working hours to 34 hours per week, worked Monday-Thursday: I will refer to that as "the Agreement". The Agreement initially ran from 1 January to 26 June 2009, but it was subsequently extended to 31 December 2009. I need not set out its terms in detail, but I should note that it contained a provision allowing the Respondent to cancel it, so that there was a return to full-time working, on one week's notice. Once so agreed the revised hours became incorporated, so long as the Agreement was in force, in the contracts of employment of the individual employees.
By September 2009 it became clear that work was picking up. There were discussions with the Union. I give more details at para. 60 below, but in short the outcome was that, although the Respondent did not exercise its right to cancel the Agreement, it did make it known to employees that they could return to the pre-Agreement working hours with effect from the beginning of October (the first Friday was 2 October). Some did so, but others preferred to continue working the shorter hours until the Agreement expired at the end of the year.
THE CLAIMS AND THE PROCEDURAL HISTORY
The Union claimed that during the currency of the Agreement Fridays were "workless days" within the meaning of section 28 of the 1996 Act, in respect of which the
employees to whom it applied were entitled to guarantee payments. The Respondent did not accept that: in short, it said that the effect of the Agreement was that while it remained in force Fridays were not days on which employees were "normally … required to work". Accordingly on 20 June 2009 the Claimants commenced proceedings in the Employment Tribunal.I need at this point to identify a peculiarity of the 1996 Act, namely that claims for the various kinds of statutory payment for which it provides may be made to the Employment Tribunal not only under the specific jurisdiction conferred in relation to that right — such as, in the present case, by section 34 — but also under the general jurisdiction in relation to deductions from wages created by Part II (the so-called "Wages Act" provisions). The key provisions of Part II for present purposes are as follows:
(1) Section 13 creates the basic right not to suffer unauthorised deductions from wages.
(2) "Wages" are defined in section 27. Sub-section (1) (d) expressly brings guarantee payments under section 28 within the definition.
(3) Section 23 confers jurisdiction on the Employment Tribunal to determine complaints of unauthorised deductions and also provides for the time in which such claims must be brought. It reads (so far as material) as follows:
"(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 …;
(b)-(d) ….
(2) Subject to subsection (4), an employment tribunal shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with—
(a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or
(b) ….
(3) Where a complaint is brought under this section in respect of—
(a) a series of deductions or payments, or
(b) …
the references in subsection (2) to the deduction … are to the last deduction … in the series ….
(3A) …
(4) Where the employment tribunal is satisfied that it was not reasonably practicable for a complaint under this section to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is...
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