Allen v Thorn Electrical Industries Ltd

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE DANCKWERTS,LORD JUSTICE WINN
Judgment Date14 June 1967
Judgment citation (vLex)[1967] EWCA Civ J0614-1
CourtCourt of Appeal (Civil Division)
Date14 June 1967

[1967] EWCA Civ J0614-1

In The Supreme Court of Judicature

Court of Appeal

Civil Division

From His Honour Judge Granville Smith Edmonton County Court

Before

The Master of The Rolls (Lord Denning)

Lord Justice Danckwerts and

Lord Justice Winn

Leonard Herbert Allen
Plaintiff
Appellant
and
Thorn Electrical Industries Ltd.
Defendants
Respondents

From His Honour Judge Barrington Lambeth County Court.

Douglas Henry Griffin
Plaintiff
Appellant
and
The Receiver For The Metropolitan Police District
Defendant
Respondent

MR NEIL McKINNON, Q.C. and MR R. ASHTON (instructed by Messrs W. H. Thompson).appeared as Counsel for the Appellant Allen.

MR R.I. THRELFALL, Q.C. and MR R.O. HAVERY (instructed by Messrs Bristows, Cooke & Carpmael) appeared as Counsel for the Respondents, Thorn Electrical Industries Limited.

SIR ANDREW CLARK, Q.C. and MR D. TURNER-SAMUELS (instructed by Messrs Gaster & Turner) appeared as Counsel for the Appellant Griffin.

MR PHILIP OWEN, Q.C. and MR RAYMOND KIDWELL (instructed by Messrs Lee Bolton & Lee) appeared as Counsel for the Respondent, The Receiver for the Metropolitan Police District.

MR J. NEWEY (instructed by the Treasury Solicitor) appeared on behalf of H.M. Attorney-General as amicus curiae.

THE MASTER OF THE ROLLS
1

Mr Allen is a charge hand supervisor employed by Thorn Electrical Industries Limited. He is a member of a trade union called the Association of Supervisory Staffs, Executives and Technicians. On Tuesday, 12th July, 1966, before any "wage freeze" was announced, there was an agreement between the employers and the union. The employers agreed to increase the salary of 120 men, including Mr Allen. His salary had been, in round figures, £20 a week. The agreement was to increase it by £l to £21 a week from the 1st April, 1966, and a further increase of a week to £22 a week from the 1st April, 1967. That was a binding contract under which Thorn Electrical Industries were bound to pay those increases of a week. The union representatives asked: "When will it be implemented?". The employers replied: "As soon as administratively possible". The next pay day was Friday, 15th July, 1966, but it was not administratively possible to calculate all the back pay, tax, and so forth, by that Friday. So the payment was deferred until the next pay day, namely, Friday, 22nd July, 1966. But two days before that day arrived there was an important announcement. On the 20th July, 1966, the Prime Minister went to the House of Commons and called for a standstill on prices and income. There should be no increases. He said that the Government would rely in the first instance on voluntary action, but intimated that they would, if necessary, seek compulsory powers to enforce the standstill.

2

Thorn Electrical Industries responded to the call. They did not pay the increase of £1 which they had promised to Mr Allen. They went on paying £20 a week instead of the increased £21. But they had no legal warrant for non-payment. And Mr Allen went co Court to prove it. He sued for the increase of a week from the 1st April, 1966, and got judgment for it. It came to £21 up to the 26th August, 1966. Thorn Electrical Industries paid it.

3

Now comes the point. The Government sought andobtained compulsory powers to enforce the standstill. On the 12th August, 1966, there was passed the Prices and Incomes Act, 1966. On the 6th October, 1966, Part IV was brought into operation. On the 1st November, 1966, the Secretary of State made an order called the Temporary Restrictions on Pay Increases (20th July 1966 levels)(No. 1) Order 1966, It was aimed expressly at the agreement made on the 12th July, 1966, between Thorn Electrical Industries and the union. It forbade the employers to pay the men at a rate greater than they were paid before the 20th July, 1966. Note the word "paid". Thorn Electrical Industries say that on the previous pay day, the 15th July, they only actually paid Mr Allen £20. They were, therefore, forbidden to pay him any more. Whereas Mr Allen says on that day, the 15th July, his rate of remuneration was by contract£21 a week, and he should receive it.

4

The case depends on the true construction of Section 29, sub-section (4) of the Act, which cays that "an employer shall not pay remuneration to which this section applies for work for any period while the order is in force at a rate which exceeds the rate of remuneration paid by him for the same kind of work before the 20th July, 1966".

5

Before I consider the law in this case, I will state the facts of the next case.

6

Mr Griffin is a senior draughtsman employed under the Receiver for the Metropolitan Police District. For some time there were negotiations about the salary of draughtsmen. Pending a final agreement Mr Griffin was receiving salary on an interim scale of £1742 a year. But eventually on the 14th July, 1966, agreement was reached on revised scales. Mr Griffin was to receive an increase, so as to bring up his salary for the year beginning 1st January, 1965, to £1900 a year, and for the year beginning the 1st January, 1966, to £1974 a year. The agreement expressly stated that "payment of the revised scales, together with arrears, will be made with the salariesfor August 1966". Accordingly, the Receiver was bound by contract to pay to Mr Griffin on the 31st August, 1966, all the back salary and all his current salary at the increased rate of £1974 a year; and thereafter to go on paying him at that increased rate.

7

Soon afterwards, before any compulsory powers were given, the Treasury took action. They issued directives to all departments prohibiting payment of any increases in wages and salaries. The Receiver, accordingly, issued a notice on the 12th August, 1966, in which he said: "The prohibition includes increases arising from agreements already concluded but not yet paid". So Mr Griffin did not get the increase on the 21st August, 1966, which he had been promised. Nor did he get the increase in current salary thereafter.

8

That was, I fear, a breach of contract by the Receiver. It was no doubt justified by the economic conditions of the country at the time, but it was not justified by law. No legal warrant existed for non-payment. Accordingly, Mr Griffin brought an action to enforce his right. On the 2nd November, 1966, he issued a summons in the County Court against the Receiver asking for £341, being the arrears of his back pay, and current salary up to the 31st October, 1966, at the increased rate. There was no defence in law to that action, but still the Receiver did not pay. He never did pay any of the increased salary until after an order was made under the Prices and Incomes Act, 1966. This order, the Temporary Restrictions on Increases in Pay (No. 2) Order, was made on the 23rd November, 1966, and came into operation on the 24th November, 1966. It was aimed at this very agreement between the Receiver and the draughtsmen. But even that order did not give the Receiver any defence to the pending action. It did not take away the accrued right of Mr Griffin to his increase. The Receiver admitted this. On that very day, the 24th. November, 1966, he paid into the County Court the fullamount of Mr Griffin's claim for increased salary less tax up to the 31st October, 1966. A few days later he paid Mr Griffin his increased salary up to the 23rd November, 1966.

9

Here is the point in this case. That (No. 2) Order came into operation on the 24th November, 1966. The Receiver says that after the 24th November, 1966, Mr Griffin's rate of remuneration is governed by what he was actually paid before the 24th November, 1966. Now before that date his actual pay was his old salary. He did not get the increased pay until it was paid into Court on that very day, the 24th November. By reason of it being paid that one dry late, the Receiver says that after the 24th November Mr Griffin is not entitled to the increase.

10

The contention of the Receiver rests on the words of Section 28(2) of the 1966 Act, which says (so far as material): "An employer shall not pay remuneration …… at a rate which exceeds the rate of remuneration paid by him for the same kind of work before the date of coming into force of the order", that is before the 24th November, 1966.

11

I turn now to the law. In both cases the question is: What is the meaning of the word "paid" in Sections 28, 29 and 30 of the Prices and Incomes Act, 1966? It is said on behalf of the employers that it means actually paid: whereas on behalf of the men it is said that it means contracted to be paid.

12

Taken literally, the word "paid" does mean actually paid in cash. It means the money which the man receives in his pay packet. That is how we were invited to construe it here. The draftsman of this Act was, it was suggested, a learned pedant who used words with meticulous accuracy. I decline to accept this invitation. We are not the slaves of words but their masters. We sit here to give them their natural and ordinary meaning in the context in which we find them. The context here is "the rate of remuneration paid". I stress the word "rate". In order to ascertain the rate of remuneration paid before a particularday, we must look at the rate which was contracted to be paid. A good instance was given by Sir Andrew Clark. Suppose an employer in the week before the 20th July was short of cash and paid his men only half their rightful wages, £10 instead of £20, promising them that he would make it up in the next week. What would be the rate of remuneration paid to them? Mr Kidwell said it would be only £10, with the result that during the whole of the "wage freeze" the employer would be bound to limit their pay to only £10 a week unless the Minister consented to them paying them more. That shows the absurdity of the literal construction. I think it plain that in that case the rate of remuneration would be £20 and not merely £10; for the simple reason...

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  • Jurisdiction
    • Nigeria
    • DSC Publications Online Sasegbon's Laws of Nigeria. Volume 13 Jurisdiction
    • 10 July 2016
    ...in giving them their natural and ordinary meaning in the context in which I find them. See: Allen v. Thorn Electrical Industries Ltd. (1967) 2 All E.R. 1137 at 1141.” - Per Ogwuegbu J.S.C. in Isiah v. Shell Pet. Suit No. S.C. 75/1997; (2001) 22 W.R.N. 168 at 183; (2001) 11 N.W.L.R. (Pt. 723......

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