Abrahall & Others v Nottingham City Council and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Sir Patrick Elias,The Senior President of Tribunals |
| Judgment Date | 19 April 2018 |
| Neutral Citation | [2018] EWCA Civ 796 |
| Docket Number | Case No: A2/2016/2331 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 April 2018 |
[2018] EWCA Civ 796
THE SENIOR PRESIDENT OF TRIBUNALS
( Lord Justice Ryder)
Lord Justice Underhill
and
Sir Patrick Elias
Case No: A2/2016/2331
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the Employment Appeal Tribunal
Mitting J
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr James Laddie QC (instructed by HR Law) for the Appellants
Mr Oliver Segal QC (instructed by Thompsons) for the Respondents
Hearing dates: 6 th & 7 th December 2017
INTRODUCTION
In March 2011 Nottingham City Council, together with a company owned by it to which some of its employees had been transferred under TUPE, decided not to award so-called incremental pay increases to their employees over the following two years; and a similar decision, albeit affecting fewer employees, was made in 2013. Several hundred affected employees have brought proceedings in the Employment Tribunal for unlawful deduction of wages under Part II of the Employment Rights Act 1996, on the basis that they had a contractual entitlement to such increases. The claims of six such employees were chosen as lead cases. They were intended to cover five groups whose circumstances differed in what were arguably material respects, though we are now concerned only with the first three. It is unnecessary for our purposes to distinguish between the two employers, and for convenience I will refer to them both as “the Council”.
By a judgment sent to the parties on 12 August 2015, Employment Judge Camp, sitting at Nottingham, dismissed the claims in their entirety. The Claimants appealed. By a judgment handed down on 11 May 2016 the Employment Appeal Tribunal (Mitting J, sitting alone) allowed the appeal in relation to group 1 but dismissed it in relation to the remaining groups. What is before us is the Council's appeal as regards the group 1 Claimants and a cross-appeal by the group 2 and 3 Claimants.
The Claimants and the Council have been represented at all stages by Mr Oliver Segal QC and Mr James Laddie QC respectively. Their written and oral submissions have been of very high quality.
THE FACTS IN OUTLINE
THE SITUATION PRIOR TO SINGLE STATUS
Traditionally, the terms and conditions of employment of local government employees have been governed by collective agreements between local authorities and the trade unions representing their workforces – being, latterly, the GMB, Unite the Union (“Unite”) and UNISON. The principal terms and conditions have been negotiated nationally, albeit with some scope for local agreements. Until the changes discussed below, terms have differed as between employees doing, broadly, manual work and those doing “administrative, professional, technical and clerical” (“APT&C”) work and were incorporated in compendia known respectively as the White Book and the Purple Book.
One difference between White Book and Purple Book terms was in their pay structures. APT&C employees were paid an annual salary. The jobs done by them were assigned to grades, each of which covered a “band” of points on a “spinal column”, each spinal column point (“SCP”) denoting a particular level of salary. It is common ground that employees were contractually entitled to move each year up to the next pay point in their grade until they reached the grade maximum, subject only to “satisfactory service” 1. Systems providing for progression by annual increments of
this kind (“pay progression” for short) are of course extremely common in the public sector. Manual employees, by contrast, were paid on a weekly or monthly basis by reference to grades which attracted a particular fixed level of pay, without any provision for progression. (There was in both cases also an expectation that the pay attracted by each SCP or payable to each grade would increase annually to reflect inflation – so-called “cost of living increases” – but that is a separate matter and immaterial for our purposes.)THE INTRODUCTION OF SINGLE STATUS
The differences between the two groups became an increasing source of tension, particularly because of the equal pay issues to which they gave rise, and in 1997 agreement was reached between employers and trade unions at national level on a detailed framework for the implementation of so-called “single status” for all local authority employees. However, the implementation of single status had to be achieved by negotiations at local level. This proved a very slow process, but eventually a deadline of 2010 was agreed nationally.
One of the fundamental changes to be effected by the introduction of single status was that the grading and pay structure for manual employees should be assimilated to that of APT&C employees, with the creation of a new and simplified single spinal column and a revised system of grades to which the jobs of all employees were allocated on the basis of a job evaluation exercise. It is, to anticipate, the Claimants' case that under those new arrangements, as under the predecessor contracts of the APT&C employees described at para. 5 above, there was a contractual right to progress from SCP to SCP within a grade by annual increments.
In the case of Nottingham, agreement on the implementation of single status was reached in early 2010 between the Council on the one hand and the GMB and Unite on the other. However, agreement with UNISON did not prove possible at that stage, and the agreement of all three unions was necessary to achieve a comprehensive collective agreement which could be incorporated into the contracts of individual employees. The only alternative way to achieve implementation was to obtain the agreement of the employees individually to the necessary changes in their contracts of employment. Accordingly, in March 2010 the Council's Appointments and Conditions of Service Committee (“ACOS”) agreed to take that course. On 21 April the Council wrote to all the affected employees inviting them, as what was described as “option 1”, to agree to new terms and conditions, reflecting the single status agreement reached with the GMB and Unite, which would take effect from 1 November 2010. The letter enclosed various documents explaining the new terms. A cash incentive was offered to those employees who agreed by a specified date. The letter also informed them that if they did not agree the Council proposed to dismiss them and offer them re-engagement on the same terms as were offered in the letter: this was described as “option 2”.
Over the following months the great majority of employees – 90% by the beginning of August – agreed to the new terms. Those who did not do so were on 4 August 2010 sent a further letter which, in effect, implemented option 2 by giving them notice of dismissal with effect from 31 October, coupled with an offer of re-engagement on the new terms with effect from 1 November. Some agreed to the new terms at that point. Of those who did not, virtually all were dismissed but re-engaged on (subject to the issues which I have to consider below) the new single status terms.
It might appear that there was no difference in substance between the two options (apart from the cash incentive): whichever was taken, the end result would be that the employee would remain in the Council's employment 2 on the single status terms. But it is clear that to some employees there was an important difference in principle between positively agreeing to a change of which they disapproved and submitting to it quasi-involuntarily as imposed by the dismissal and re-engagement route.
In the meantime negotiations with the trade unions had continued; and at the end of July a collective agreement was reached with all three unions. The agreement covered most, though not quite all, of the matters in the new terms which had been sent with the April letter. The final signature to the agreement is dated 2 August 2010. I will refer to it as “the Collective Agreement”.
Employees recruited on or after 1 November 2011 were likewise of course employed on the basis of the new single status arrangements – though, again, I subject to the issues arising in this appeal.
THE FREEZE
Following the 2010 General Election there was a new climate of austerity in the public sector. At its budget consultative meeting in December 2010 – thus only a few weeks after single status had come into effect – the Council announced to the trade unions a proposal for “freezing incremental progression for two years” – that is, that employees would not move up the spinal column in either 2011 or 2012. A formal decision was made on 8 March 2011 and the freeze took effect from 1 April.
The unions did not agree to the proposed freeze, but it was implemented nonetheless, and there were accordingly no incremental pay increases in either 2011 or 2012.
At the end of the two-year period, in early 2013, the Council resolved to extend the freeze for a further period, but not for the totality of the workforce: I need not give the details. On this occasion the unions responded by activating in April 2013 a formal collective grievance procedure. This did not produce a resolution.
THE PROCEEDINGS AND THE CORE ISSUES
The first claims in the litigation were made in or about July 2013, following the failure of the grievance procedure. As a result of one or more case-management hearings the six lead Claimants were chosen to represent five groups of employees, as follows:
(1) those employees who took option 1, by accepting the offer of new terms made in the Council's letter of 21 April 2010 – this is the largest group;
(2) those employees who took option 2 and were dismissed but re-engaged on 1 November 2010 on the selfsame terms;
(3) those employees who commenced employment on or after 1 November 2010;
(4) employees...
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