Appeal No.	 EAT/977/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 December 2001

Before
THE HONOURABLE MR JUSTICE MAURICE KAY
MISS A MACKIE OBE
MR P R A JACQUES CBE

1) MR T WILDGOOSE 2) MRS Y M SANDERSON
3) MR S W O'HANRAHAN 4) MRS L OXBY	APPELLANTS

RAMPTON HOSPITAL AUTHORITY	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR K McNERNEY
Representative
Royal College of Nursing
Legal Department - Leeds Office
Raven House
81 Clarendon Road
Leeds LS2 9PJ
	
For the Respondent	MISS M TETHER
(of Counsel)
Instructed by:
Messrs Beachcroft Wansboroughs
Solicitors
285-289 Glossop Road
Sheffield
S10 2GZ

MR JUSTICE MAURICE KAY

1	This is an appeal from a Decision of an Employment Tribunal sitting at Sheffield on 8 June 2000.  The four Appellants are registered nurses working at Rampton Special Hospital.  They are all paid an annual salary for a set number of hours of work.  Occasionally they are required to work overtime in the form of additional shifts for which they are paid the appropriate rate.  

2	The dispute arose in the present case about the interpretation of a term in a national agreement appearing under the heading ‘Travelling Expenses’.  We do not need to go into detail about the full contentions of the two parties in that regard  The term at the heart of the dispute is referred to in the papers as Section 23.4 of the Agreement and it is headed: ‘Attendance at place of employment outside normal working hours’.  Clearly the employees and their representatives took the view that in certain circumstances which had arisen, they were entitled to be paid expenses for attendances outside normal working hours, but the employers did not accept the claims.  

3	When the matter came before the Employment Tribunal, which took the form of a Chairman sitting alone, it was agreed between the parties that the four claims of the four different Applicants had a connecting factor common to all, namely that they related to expenses in respect of the cost of travel between home and workplace, on the occasion of the extra shifts.  

4	As a result of that agreement between the parties, the Employment Tribunal was invited to decide as a preliminary issue whether expenses in respect of the cost of travel to and from work in respect of those extra shifts fell within the provisions of the governing statute.  That being the case, the Employment Tribunal did not hear evidence, nor was it necessary for it to consider individually the variable circumstances in which the journeys took place, or the different ways in which expenses were incurred.  The Employment Tribunal confined itself to the question whether on the agreed common factual basis the matter fell within or without the statute.  As we shall see, the Employment Tribunal decided that it fell outside the statutory provisions and the complaints were all dismissed.  The statutory provisions to which we have been referring, owe their origin to the Wages Act, and before that, we understand, the Truck Acts.  

5	Be that as it may, they are now to be found in Part 2 of the Employment Rights Act 1996 .  Section 13(1) of the 1996 Act provides that:
“An employer shall not make a deduction from wages of a worker employed by unless
(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or
(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.”

If an employer pays less than he ought to pay, then by Section 13(3) that is to be treated as a deduction.  

6	Since the Wages Act 1986 it has been possible for complaints of unlawful deductions to be made to the Employment Tribunals, and not only in the ordinary Courts.  By Section 23 of the 1996 Act, it is stated:
“(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”
As is well known, there is a time limit then provided, but that does not arise in this case.  

Clearly, by their complaints, the Appellants were asserting that they fell within Section 23(1)(a) and were asserting deductions from wages in contravention of Section 13.  That brings us to the crucial question, namely the meaning of “wages”.  Section 27 of the Act defines “wages” in subsection 1 as meaning:
“any sums payable to the worker in connection with his employment”
including various matters there set out:
“but excluding any payments within subsection (2).”
Subsection 2(b) excludes:
“any payment in respect of expenses incurred by the worker in carrying out his employment”
The Employment Tribunal concluded that although expenses of travel to and from home were or may well have been sums payable “in connection” with the employment within the meaning of Section 27(1), they were excluded because of the express provisions of Section 27(2)(b) because they were payments:
“in respect of expenses incurred …..in carrying out his employment.”

It is against that finding that the current appeal lies.  The point is a short one, but nevertheless, an important one.  

7	The Decision of the Employment Tribunal, after setting out the assumed facts and statutory provisions and the arguments of the Applicants, referred to two previous Decisions of this Court which, the employers contended, favoured their interpretation of these claims being outside the definition of “wages” by reason of Section 27(2)(b).  Those two cases are Barrie -v- Rochdale Metropolitan Borough Council [unreported] 5 May 1995 and London Borough of Southwark -v- O’Brien [1996] IRLR 420.  The eventual Decision of the Employment Tribunal is contained in this paragraph of the Extended Reasons:
“9. It seems to me that the intention of Section 27 is clear and expenses are specifically excluded from the definition of wages.  I do not think that it is helpful to try and analyse the words so as to try and draw a distinction between expenses involved in getting to work and expenses involved in actually working.  To do so would involve sterile arguments as to the extent of necessary preparation for work and as to the extent of the consequences of working.”
10.   I follow the guidance of the Employment Appeal Tribunal and I find that this tribunal has no jurisdiction to consider these complaints which are therefore dismissed.”

8	The authorities that were being referred to as “guidance” do include one passage which seems to us to come very close indeed to the circumstances of the present case.  In the course of giving judgment in Barrie, Morison J said:
“It seems to us, that the law which determines whether an expense is recognised as legitimate, so as to be capable of being deducted from wages in revenue terms, is not the same as the test which is set out in s.7(2)(b).  It is, therefore, not in the least bit surprising that some expenses which are covered by s.7(2)(b) should nonetheless be taxable because the provisions are not intended to be construed the same way and are not identically worded.  To give an example, if an employee uses his car to get to his place of work from his home and then to return to it at the end of his working day, that would not be an expense which the Revenue would accept as being a proper expense incurred by him wholly and necessary in connection with his employment.  Nonetheless, it seems to us that if an employer pays an allowance to his employees, which takes into account the use which he makes of his car to make such a journey from his home to his place of work, then it falls within 2.7.(2)(b), whose words were wide enough to cover such an expense, that is, any payment in respect of expenses incurred by the worker in carrying out his employment.”

9	In making his submissions to us, Mr McNerney has sought to distinguish Barrie on the basis that there the principal argument was as to whether or not there was a profit element in the expenses that were payable.  However, that seems to us not to be an important point of distinction when considering Barrie as a previous decision of the Employment Appeal Tribunal.  Barrie was, indeed, cited with approval by Mummery J in giving the judgment in the London Borough of Southwark case, where he said at paragraph 26:
“We agree with Morison J that in a case such as this a finding has to be made that the deduction was either wholly in respect of wages or wholly in respect of expenses.  What it is in each case is a matter of fact and degree.”
We have not found this to be a simple case by any means, not least because in Section 27, as between subsections (1) and (2), two different forms of expression are used, namely, on the one hand “in connection with his employment” and on the other hand, “in carrying out his employment”.  

10	Having regard to all the circumstances, and particularly having regard to the fact that the decision in Barrie has remained intact and uncriticised for more than five years, we have come to the conclusion that, notwithstanding any difficulties in interpretation, that case ought to be followed here and that our conclusion ought to be the same as that of the Chairman of the Employment Tribunal in the present case.  We are satisfied that Section 27(2)(b) embraces the assumed facts of the present case, involving the common feature of travel between home and workplace.  

11	We have agonised over whether that is correctly described as a matter of jurisdiction, but it seems to us that in the last resort, that matters not.  The question is whether the section fits the assumed facts and, in our judgment, as we have indicated, it does, with the consequence that the Employment Tribunal was correct in considering that, in that forum, this claim had to fail.  As in the London Borough of Southwark case, we make the same observation that was there made by Mummery J, namely that we are not deciding that the Appellants are without rights in relation to their fundamental dispute with the Respondent.  It may well be that they have rights.  We have not entered into that debate.  However, if they have, they are enforceable in the County Court or in the High Court, rather than in the jurisdiction in which they commenced proceedings.  

12	Before we leave the case, there is another matter which we think worthy of a wider readership.  In the London Borough of Southwark case, Mummery J expressed a view to the effect that it is preferable if cases under Part II of the Employment Rights Act are heard by a Chairman sitting with lay members, rather than a Chairman sitting alone.  We appreciate that in the present case, it can be said that ultimately, the Chairman was only called upon to decide a narrow point of construction on agreed or assumed facts, but we can see also how, quite easily, that might not in the end have been his only task.  It does nothing to invalidate his Decision, and the parties had agreed to that course.  However, the mere agreement of the parties is one of the things which Mummery J suggested ought not to be conclusive, as to the constitution of an Employment Tribunal in circumstances such as this, and we would simply reiterate his comments and associate ourselves with them.  

13	It follows from all that, that in our judgment, Section 27(2)(b) was correctly decided as applying to the circumstances of the present case, and accordingly, the appeal will be dismissed.