Rigby v Ferodo Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1987 |
| Court | House of Lords |
| Year | 1987 |
| Date | 1987 |
Employment - Contract of employment - Repudiation - Reduction in wages imposed on employee - Reduction not accepted by employee - Whether employee entitled to damages - Whether damages limited to period corresponding to period of notice
The employee was a lathe operator and had been first employed by the employer in 1964. He was a member of a union and in 1982 was entitled to 12 weeks' notice of termination of his contract. In that year the employer encountered serious financial difficulties. In consequence, the employer proposed a 5 per cent. reduction in wages to the union, and warned that, if this were not agreed, it would have to be imposed. In September, the union suggested two alternative proposals, the alternatives being dependent upon whether or not the union members took industrial action. The employer warned that there was no alternative to reductions in wages and, on 18 September, set out in writing the reduced rates which it applied from that date. The union held meetings of its members at which the only votes taken were in relation to the possibility of taking industrial action; no vote was taken on whether or not to accept the wage reductions. The union itself did not agree to accept the reductions, although it indicated to the employer that no industrial action would be taken. The employee instituted proceedings for damages for breach of contract in 1984. Ognall J. held that the employer had underpaid the employee and ordered an inquiry as to damages. The Court of Appeal dismissed the employer's appeal.
On appeal by the employer: —
Held, that, in the absence of the employer seeking to terminate the contract of service it had with the employee, the employer had sought to compel the employee to accept a wage that was less than he was entitled to under the contract; that the employee in continuing to work and receiving a reduced payment under protest had not accepted a variation in the terms of the contract and, therefore, he was entitled to recover the difference between his contractual entitlement and the amount paid by the employer either in damages for breach of the contract or in debt (post, pp. 31A–D, 35C–E, 36A–C).
The following cases are referred to in the opinion of Lord Oliver of Aylmerton:
Gunton v. Richmond-upon-Thames London Borough Council [
London Transport Executive v. Clarke [
Norwest Holst Group Administration Ltd. v. Harrison [
The following additional cases were cited in argument:
Brown v. Southall & Knight [
Burdett-Coutts v. Hertfordshire County Council [
Cort (Robert) & Son Ltd. v. Charman [
G.K.N. (Cwmbran) Ltd. v. Lloyd [
Marriott v. Oxford and District Co-operative Society Ltd. (No. 2) [
Reg. v. East Berkshire Health Authority, Ex parte Walsh [
Vine v. National Dock Labour Board [
Appeal from the Court of Appeal.
This was an appeal by the appellant, Ferodo Ltd., from the judgment dated 10 October 1986 of the Court of Appeal (May and Woolf L.JJ. and Sir Roualeyn Cumming-Bruce) dismissing an appeal by the appellant from the judgment dated 29 January 1986 of Ognall J. who had found for the respondent, Marion Rigby suing as widow and administratrix of the estate of Harry Rigby deceased, in the action brought by the deceased (as plaintiff) to recover damages against the appellant in respect of breach of contract and for a declaration that certain wage reductions were in breach of contract.
The facts are stated in the opinion of Lord Oliver of Aylmerton.
Giles Wingate-Saul Q.C. and John Hand for the appellant.
Michael Kershaw Q.C. and Timothy Dutton for the respondent.
Their Lordships took time for consideration.
15 October. Lord Bridge Of Harwich. My Lords, I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Oliver of Aylmerton. I agree with it and for the reasons he gives I would dismiss the appeal.
Lord Fraser Of Tullybelton. My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Oliver of Aylmerton. I agree with it and, for the reasons stated in it, I would dismiss the appeal.
Lord Brightman. My Lords, I have had the opportunity of reading in draft the speech to be delivered by my noble and learned friend, Lord Oliver of Aylmerton. For the reasons so convincingly expressed by him, with which I entirely agree, I would dismiss this appeal.
Lord Ackner. My Lords, I have had the advantage of reading in draft the speech to be given by my noble and learned friend, Lord Oliver of Aylmerton. I agree with it and for the reasons he gives I would dismiss this appeal.
Lord Oliver Of Aylmerton. My Lords, the respondent is the widow and administratrix of the late Mr. Harry Rigby, who, prior to his death, had been a lathe operator employed by the appellant at its plant at Caernarvon. On 22 March 1984 Mr. Rigby commenced proceedings in the Queen's Bench...
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