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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> MacDonald v Lord Advocate [1999] ScotCS 27 (20 January 1999) URL: http://www.bailii.org/scot/cases/ScotCS/1999/27.html Cite as: [1999] ScotCS 27

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The pursuer in this action was employed by the Forestry Commission as a building and engineering worker from at least 1991 until he took voluntary redundancy on 30 April 1996. As part of the terms of his contract of employment he was entitled to an overnight subsistence allowance when he was on detached duty. Immediately before 1 April 1992 the level of that allowance was £48.85. From and after that date the Forestry Commission unilaterally reduced that rate of allowance to £30.00 per night. The pursuer was informed of this unilateral decision by a circular issued by the Forestry Commission to their engineering and building workers on 20 November 1991. The question raised in this action is whether the Forestry Commission were entitled unilaterally to vary this particular term of the pursuer's contract of employment with them in the way that they did. If they were not, they were in breach of that contract and the pursuer was entitled to an overnight subsistence allowance at the rate of £48.85 per night between 1 April 1992 and 30 April 1996 when he was made redundant. Parties have agreed in a joint minute that the amount which the pursuer would have received in that period is £2,648.75 with interest thereon at the rate of four per centum per annum from 1 April 1992 to 30 April 1996, and thereafter at the rate of eight per centum per annum until payment. If, of course, the Forestry Commission were entitled unilaterally to vary this term of the pursuer's contract in the way they did, they were not in breach of contract, and decree of absolvitor should be pronounced.

The pursuer's conditions of service with the Forestry Commission are to be found in the Forestry Commission Industrial Personnel Memorandum IM16 (Revised August 1985) entitled "Industrial Staff - Conditions of Service". (See number 17/3 of process). Appendix I of that document sets out the pursuer's main conditions of service. In paragraph 1 of the Appendix it is stated that these conditions of service are set out in greater detail in the Forestry Commission Industrial and Trade Council Agreement on Wages and Conditions of Forestry Workers in the Forestry Commission. I shall refer to the F.C.I.T.C. Agreement simply as "the Agreement". In the pleadings parties appear to be agreed that since at least 1986 it has been custom and practice for the terms and conditions of employment of all forestry workers, engineering workers and building workers employed by the Forestry Commission to be set by the F.C.I. and T.C.. These terms and conditions are to be found in the Agreement. (See Condescendence 4 and Answer 4). Reference is made in paragraph 12 of Appendix I to the Council. There clause 2 of the Council's objects and constitution are quoted. The clause makes it clear that if there is a failure to agree on any proposal made by either side of the Council in respect of wages and working conditions of forest workers in the employment of the Commission, which does not raise issues of a general character as affecting other Government Departments, the proposal shall be referred to arbitration if both sides consent. (See 17/5, paragraph 2(a) for its full terms). No attempt was made by either side of the Council to refer to arbitration the question of the reduction of the rate of the overnight subsistence allowance.

There is a provision in the pursuer's conditions of service which relates to "Detached Duty". It is in the following terms:

Paragraph 1(e) sets out the methods according to which changes in the terms of employment may be notified. This being a change of a general nature, it is one which may be notified by an amendment to the Agreement or by the issue of a general notice. These methods are, in effect, repeated in paragraph 11 of the Conditions of Service.

The Agreement (number 17/4) is a substantial document setting out in detail the agreement reached by the Forestry Commission and representatives of the Trade Unions making up the Council. The objects of the Council are set out in paragraph 2, and in paragraph 2(c) this is said:

According to paragraph 3, amendments will be issued when necessary. Paragraph 13 deals with Travelling and Subsistence and paragraph 13(a)(iv) deals with Detached Duty. Paragraph 13(c) deals with Payment of Subsistence for Absences Overnight. The rates of the allowances for overnight subsistence are to be found in Appendix 2 of the Agreement, and in particular in paragraph 7. The only other part of the Agreement I should refer to is paragraph 24 which relates to Local Negotiating Machinery. It provides:

Mr Geary who appeared for the Forestry Commission, informed me that this had been followed through to the level of the Director-General of the Forestry Commission. I note that it was the rates in paragraph 7 of Appendix 2 of the Agreement which the Forestry Commission varied unilaterally.

Mr Geary conducted me on an interesting visit to certain discrete topics within the Civil Service Pay and Conditions of Service Code. They are to be found in number 17/1 of process, and the full code itself in number 19 of process. I refer also to what is averred in answer 8 on pages 13 to 14 of the Closed Record. In light of the view I have taken I do not require to consider each of these topics. I think, however, that it is worth noting what is said in (ii) of the Introduction:

Mr Geary also referred me to The Civil Service Order in Council 1982, paragraph 4(b) of which provides:

That, said Mr Geary, covered the present case because it was concerned with overnight subsistence allowance. That, indeed, was the only matter he informed me which was not agreed as part of the Pay Award of 1991.

Mr Geary moved me to sustain the defender's first plea-in-law and dismiss the action. In doing so, he drew my attention to the general objects clause of the Council which provides:

There was, however, no express term with regard to the power to amend the terms and conditions of the contract of employment. In his submission the Forestry Commission were entitled to amend the provision relating to an overnight subsistence allowance, having regard to all the documents when considered together. Paragraph 13 of the conditions of service (number 17/3 of process) made it clear that amendments to the Conditions could be intimated in any of three ways. There could be an agreement reached at a Council meeting to do so. If the change related to one employee, then a letter would be sent to him. Otherwise, the change could be effected by general notice. I think that it is important to understand that paragraph 13 of the Conditions is concerned wholly with the way in which any changes in the Conditions may be notified. It does not deal with the exercise of the right to make such changes. It is true, as Mr Geary said, that nowhere is it expressly said that no amendment can be made without the consent of the Trade Union side. But, as it seems to me, whether an amendment can be made unilaterally or not, must depend upon an examination and understanding of the documents which contain the provisions of the pursuer's contract of employment with the Forestry Commission.

It is also true, as Mr Geary submitted, that paragraph 6 of the Conditions of Service which refer to Detached Duty, make specific reference to allowances being paid in accordance with rules laid down in the Code as well as in the Agreement. He may well also be right that the rules in the Code are specifically to be found in paragraphs 4710 and 4811 of the Code. According to Mr Geary, if the allowance was intended to compensate for outlays incurred, and not to provide a bonus, as distinct from pay, its revision by the Forestry Commission as employer was in accordance with what the Code provided. That, too, may be so; but the question is whether the reference to rules in the Code imports necessarily the right on the part of the employer unilaterally to vary downwards the rates of the allowance. For the reasons I shall shortly give, I do not think that it does.

Counsel for both parties referred me to Cadoux v Central Regional Council 1986 S.L.T. 117. In that case the pursuer was employed by the defenders. One of the terms of his contract of employment was that his "post was subject to the Conditions of Service laid down by the National Joint Council for Local Authorities' Administrative, Professional, Technical and Clerical Services (Scottish Council) and as supplemented by the Authorities' Rules and as amended from time to time". At the time when his contract of employment was concluded the pursuer was entitled to participate in a non-contributory life assurance scheme in accordance with the Authorities' Rules. Later, however, the defenders unilaterally withdrew the scheme, thereby depriving the pursuer of its benefit. The Lord Ordinary, Lord Ross, concluded from an examination of the Rules that they were created unilaterally and not bilaterally; and, that being so, the defenders were entitled to alter them unilaterally, since they were not agreed rules, but the defender's rules. He therefore dismissed the action on the ground that the pursuer did not have an irrevocable right to participate in the non-contributory scheme.

That case may be contrasted with the case of Airlie and Others v The City of Edinburgh District Council 1996 I.R.L.R. 516 in which I note that Cadoux was not cited. In that case a majority of the E.A.T., including the chairman, held that there were a number of provisions in an agreement between the appellant's union representatives and the respondents that indicated that the employers had a right to control the operation of the bonus scheme and to make adjustments to it. Mr Geary submitted that there was a parallel between that case and the present case. Here there was no attempt to take away the allowance; only to modify it in accordance with the principles of the Code.

I am of opinion, in agreement with Mr Peoples, that the Forestry Commission unilaterally could change only those matters which were capable of being settled by a management decision, as in Cadoux where the Rules had been made unilaterally by the employers. While paragraph 6 of the pursuer's Conditions of Service does make reference to the Code, it is important in my view to note that it also makes reference to the Agreement. In any event, the Introduction to the Code makes it plain, to me at least, that the Code must be read and considered alongside agreements reached by Civil Service Departments through their own negotiations with staff representatives. In short, as Mr Peoples pointed out, this is not a matter governed exclusively by the Code. It is a matter that was always the subject of joint agreement. It was never a management decision, and therefore there could be no question of dealing with it "administratively". This is not a case in which there was a Code change or a ministerial instruction in the exercise of powers conferred by Order in Council. I also agree with Mr Peoples that there is no valid, legal distinction between pay and hours on the one hand, and allowances on the other. It seems to me that there would have to be a clear provision in the pursuer's contract of employment permitting his employers to change a particular provision unilaterally, where the terms of that agreement had been reached as a result of negotiation which resulted in a joint agreement, namely the F.T.I.T.C. Agreement. In this case, I am unable to find such a provision in the pursuer's contract of employment with the Forestry Commission. In my opinion, therefore, the Forestry Commission had no power unilaterally to vary downwards the rate of overnight subsistence while the pursuer was on Detached Duty. If I reached that decision, there was no dispute between the parties that, having acted unilaterally as they did, the Forestry Commission were in breach of their contract with the pursuer.

In these circumstances I will repel the defender's pleas-in-law. I will sustain the pursuer's first and second pleas-in-law and find him entitled to the sum of £2,648.75 with interest thereon at the rate of four per centum per annum from 1 April 1992 to 30 April 1996, and thereafter at the rate of eight per centum per annum until payment.