Appeal No. UKEAT/0101/04/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 5 April 2004
Judgment delivered on 15 June 2004

Before
HIS HONOUR JUDGE BIRTLES
MR J MALLENDER
MS B SWITZER

GOVERNING BODY OF THE PLUME SCHOOL MALDON	APPELLANT

MR M LEWIS	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR MICHAEL LANE
(of Counsel)
Instructed by:
Essex County Council
Chief Executive’s Office
PO Box 11, County Hall
Chelmsford
Essex CM1 1LX	
For the Respondent	MR GRAHAM CLAYTON
Solicitor
Messrs Graham Clayton
Solicitors
Hamilton House
Mabledon Place
London WC1H 9BD	

HIS HONOUR JUDGE BIRTLES

Introduction

1.	This is an appeal from the decision of an Employment Tribunal sitting at Stratford on 1 October 2003.  The reserved decision was sent to the parties and entered in the Register on 27 October 2003.  The Chairman was Ms J M Jones and the members were Mr N Bannatyne and Mr R Sier.

The Employment Tribunal Decision

2.	The unanimous decision of the Employment Tribunal was that the Appellant had breached the Respondent’s contract of employment and made unlawful deductions from his wages.  It therefore made a declaration under Section 24 of the Employment Rights Act 1996 that the Appellant had made unlawful deductions between 1 September 2000 and 31 August 2003.

3.	At the beginning of the Employment Tribunal hearing Mr Lane made a submission that the Employment Tribunal had no jurisdiction to hear the Respondent’s complaint: Decision paragraph 2.  The Employment Tribunal record the submissions made by the parties: Decision paragraphs 3-7 and decided it did have jurisdiction: Decision paragraph 8.

4.	The Employment Tribunal’s Reasons were as follows:

“9	The Tribunal does have a duty at the beginning of every hearing to consider whether the complaint before it, is one which it has jurisdiction to hear.  The Tribunal’s powers arise from statute and so all complaints and claims presented to it should emanate from legislation giving it jurisdiction
10	The present claim is presented by the Applicant as a breach of section 13(3) of the Employment Rights act and as a complaint under section 23 of that Act.
11	The wider implications of the Respondent’s decision could have been challenged by the Applicant in the High Court by way of judicial review.  The Applicant could have chosen to apply to the High Court for a declaration that the decision to limit his salary protection for a year was ultra vires or choose some other ground on which to base an application for a judicial review.  This would be an application dealing with the reasons for the Respondent’s decision and the process by which they had come to it.  We are not being asked to decide on those points.
12	Instead, the Applicant chose to come here and his application is properly founded under section 23 of the Employment Rights Act, i.e. that the effect of the Respondent’s decision is to reduce the salary to a lower level after one year in his new post as Head of Science which does not accord with paragraph 32.1.12 of the School Teachers’ Pay and Conditions Document 1999 and is therefore contrary to section 2(7) of the School Teachers’ Pay and Condition Act 1991 and is therefore less than that “properly payable” under section 13(3) of the Employment Rights Act.”

5.	The Employment Tribunal then went on to the material facts and about which there is no dispute in this case.  Those materials facts were as follows:

“16	The Applicant was a full-time teacher at Plume School from 1 January 1982, in the science department.  He also occupied various roles within the senior management team of the school, including head of VIth form and head of lower school at the Mill Road campus.  Plume School (which hereafter will be referred to as the Respondent) is a large comprehensive school at Maldon, Essex.
17	The Applicant has since left the Respondent’s employment.  His leaving date was 31 August 2003 and we are informed that he has subsequently found a teaching position elsewhere.
18	The Respondent received a report of an inspection carried out by OFSTED under their remit which, identified the management structure of the school as an area which needed major restructuring.  As things stood, it was not supporting the needs of the curriculum and in turn, the students.  The restructuring involved changes to the roles of some teachers within the faculties was well as the creation of new posts.  The Respondent decided to follow the recommendations as set out in the report by OFSTED.
19	The Respondent, having reached a preliminary decision to implement the recommended changes realised that it would affect certain teacher’s employment and could result in redundancies.  They therefore decide to consult the trade unions representing the affected teachers.  There then followed discussions with the NASUWT and NUT of which the Applicant was a member.  We were told by Mrs Binder for the Respondent that the purpose of these discussions was to inform the union of the new proposed structure, to inform them of the changes in teacher’s terms and conditions and to agree the process for “slotting” staff into new jobs and ring fencing old jobs, where appropriate.  The decision had already been made to proceed with the restructuring and the unions were not actually consulted about that.
20	One of the particular subject discussed was called “salary protection”.  Salary protection was applicable to those teachers whose roles under the new structure would be at reduced rates of pay compared to their present jobs.  The Respondent believed that such teachers could opt for redundancy or accept a new “slot” which might be accompanied by “salary protection” which would maintain their salary at the current level.  The Respondent were told by the NASUWT that in the LEA area, it was usual for salary protection to be for three for four years.  However, after discussion, the Respondent found that they were unable to extend this beyond one year.  This applied to all teachers who, because of the proposed restructuring were being offered new posts at a reduced rate of pay.

21	The Applicant’s post was directly affected by the proposed restructuring.  Firstly, it would result in him being displaced from the position he held.  He applied for the post of Head of Science as it was the only post he felt appropriately qualified to fill.  He was aware that it was not at the same level as his previous post and also applied for the post of House Tutor which would have given him a scale one responsibility payment which would have made his total salary equivalent to the scale he was previously on.  He was not appointed to the post of House Tutor.
22	By letter dated 5 February 1999 (C6) the Applicant was offered “slotting” into the post of Head of Science Faculty, which was stated as being a post with lower responsibility and therefore a lower pay rate than his then current post.  He was told that acceptance of the “slotting” did not preclude him from applying for promotional and other posts.  He was also reminded that the process of voluntary redundancy/early retirement would continue throughout the relevant period, i.e. until the deadline for applying for post which was 24 February 1999.  The Applicant signed this letter to indicate his acceptance for the post.
23	On 7 July the Applicant was formally offered by letter the full-time post of Head of Science Faculty beginning on 1 September 1999.  It was calculated on the basis of being at point 14 on the salary scale.  One of the components of the post was one responsibility point which was protected until 31 August 2000.  The salary was stated to be based on point 13 from 1 September 2000.  The copy document shown to us is B15 which does not have the Applicant’s signature but it was not disputed that the Applicant accepted this post as set out.  The Applicant was sent another letter (document B16) in which the salary protection arrangements are clearly set out.
24	The Respondent observed the terms set out in documents referred to above.  The Applicant continued to receive a salary at point 14 up to 1 September 2000.  Thereafter and up to the date of his resignation his salary was paid at point 13.  The Respondent never revisited this decision.
25	Two other teachers employed by the Respondent in Plume School who were also affected in exactly the same way as the Applicant are Ms Felicity Thomas and Mr Philip Langshaw.  In March 2001 they also brought complaints under section 23 of the Employment Rights Act 1996 to another Tribunal within this region and were successful.  The Respondent appealed to the EAT but the decision was upheld by division of the EAT chaired by His Honour Judge Peter Clark by a judgment delivered on 31 July 2002.  We were referred extensively to that decision by both parties since the facts are effectively the same as the case before us.”

6.	The Employment Tribunal then summarised the evidence: Decision paragraph 26, set out the law: Decision - paragraphs 27-31 and then addressed the parties’ submissions which included a number of matters of law: Decision - paragraphs 32-33.  Finally, the Employment Tribunal reached its decision: Decision - paragraphs 34-39.  The material parts of that decision are as follows: 

“Decision
34	It is our decision that paragraph 32.1.2 of the Pay and Conditions Document 1999 applies in this case, as it did in the case of Plume School v Langshaw and Thomas.  The applicant here was also in jeopardy of suffering a diminution of remuneration “in circumstances other than those mentioned in paragraph 32.1.1”.  We are bound by the decision in that case since it involves the same Respondent and has the same facts apart from involving a different teacher.  The Respondent was not empowered to impose a temporal limitation on the salary protection granted by the Applicant.  It was an “all or nothing” provision.
35	The Respondent had exercised their discretion under paragraph 32.1.2 in favour of granting pay protection.  The temporal limitation of one year was unlawful and could properly be excised, leaving the Applicant with unlimited pay protection in his new post.
36	In severing the decision made by the Respondent, we are left with a decision to protect the Applicant’s salary without condition.  It is also our decision that the agreement to offer the Applicant the post of Head of Science of the safeguarding salary from 1 September 1999 is not void.  In the letter dated 7 July 1999, the Applicant does signify his acceptance of one responsibility up to 31 August 2000 after which his salary would be based on point 13 of the salary scale.  This meant a reduction in salary.  Section 13(1)(a) and (b) of the Employment Rights Act 1996 would seem to apply.  However, this is rendered unlawful by reason of section 2(7) of the School Teachers’ Pay and Conditions Act 1991 which provides that the contract of employment of a school teacher shall contain no terms other than those which have effect by virtue of a Pay and Conditions Order.  A time limit on salary protection is outside the powers of the Respondent under the Pay and Conditions Document 1999 and therefore is a term that does not have effect by virtue of a Pay and Conditions Order.  We find, as indeed was found in the case of Plume School v Langshaw and Thomas that there is no effective provision or consent for the purpose of section 13(1) of the Employment Rights Act 1996.
37	We do not find that this claim is unreasonable or vexatious.  We find that unlawful deductions were made and that these were made up until the time the Applicant left the Respondent’s employment on 30 August 2003.  It is a continuing breach up until that date and the Applicant is obviously within the strict time limits for bringing his complaint to the Tribunal.  In addition, the Applicant stated in evidence that it was not until the case of Plume School v Langshaw and Thomas was successful in the Employment Appeal Tribunal that he heard it in the school and decided to investigate the possibility of taking legal action in his own case.  We accept that.
38	Whether or not his case should have been brought together with that of Ms Thomas and Mr Langshaw was not something that was explored in evidence in the hearing.  We would presume that it was in the power of the union to decide when and how cases were taken up, if there was no demand from the teachers themselves.  We do not find from the evidence before us that the fact that the Applicant’s case was brought separately is sufficient to make a finding that the case is vexatious or unreasonable.
39	In the circumstances, we find that the Applicant’s claim succeeds and we make a declaration under section 24 of the Employment Rights Act that the Respondent have made unlawful deductions from the Applicant’s wages between 1 September 2000 and 31 August 2003.  We are informed by the parties that since the total sum of the deduction is now a finite sum, easily determined, it is unnecessary for us to make an award of a specific sum at this stage.  We would order that the Respondent pay the total sum of the deductions to the Applicant forthwith.”

The Notice of Appeal

7.	The Notice of Appeal raises a number of issues which the Appellant alleges are errors of law on the part of the Employment Tribunal.  The Notice of Appeal has been amplified by Mr Lane’s skeleton argument and we are grateful to him for that and his oral submissions as well as to Mr Clayton for his skeleton argument and oral submissions.  We propose to take the issues as they appear in the Notice of Appeal: EAT bundle pages 12-15.  Before doing that we set out the relevant law relating to teachers’ pay and we gratefully adopt the analysis of the Employment Tribunal which is not criticised by either party:

“27	Teachers’ pay is primarily governed by the School Teachers’ Pay and Conditions Act 1991 which set up a review body which reports and makes recommendations to the Secretary of State.  The Secretary of State gives effect to such recommendations as he approves by statutory instrument or “Pay and Conditions Order”.  By section 297) of the Act:
“... so far as concerns his statutory conditions of employment, the contract of employment of a school teacher shall contain no terms other than those which have effect by virtue of a pay and conditions order.”
28	The terms of the applicable Pay and Conditions Order are to be found in the “School Teachers’ Pay and Conditions Document 1999”.  Paragraph 32 of the document is headed “General safeguarding” and concerns the safeguarding of teachers’ salaries in a variety of circumstances where they might otherwise suffer a diminution or remuneration.  Paragraph 32.1.1 contains a mandatory requirement for a teacher salary to be maintained at the same level where he loses his post or would otherwise suffer a diminution to his remuneration as “a result of a closure or reorganisation of an educational establishment”, and a teacher continues in a post where his remuneration is paid by the same authority as before.  However, in this case there has not been a closure or reorganisation within the meaning of the order.
29	Paragraph 32.1.2 sets out a discretionary power to maintain a teacher salary at the same level in the following terms:
“where, in circumstances other than those mentioned in paragraph 32.1.1 such a teacher loses his post our would “but for this paragraph” suffer a diminution in his remuneration, and is thereupon employed full-time as a teacher in the provision of primary or secondary education in a post in which his remuneration is paid by the same authority as before he may, at the discretion of the authority be deemed for all salary purposes to continue to hold the post he held, and to be entitled to those allowances … to which he was entitled immediately before the circumstances occurred; and the authority shall not unreasonably refuse to exercise their discretion in this matter in favour of the teacher.”

30	It is accepted for the purposes of this provision that the Respondent is “the authority”.
31	By section 13(1) of the Employment Rights Act 1996:
“An employer shall not make a deduction from wages of a worker employed by him unless –
(a)	the deduction is required or authorised to be made by virtue of … 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.”
Section 23 of the Employment Rights Act 1996 states:
“(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 …””

Ground One

8.	The first ground of appeal is that the Employment Tribunal erred in law in finding that it had power to hear the Respondent’s complaint and/or that having found that the Respondent could have challenged the Appellant’s exercise of its discretion by means of judicial review, the Employment Tribunal erred in law in not striking out the Respondent’s application as unreasonable and/or vexatious and/or as an abuse of process.
 
9.	The Employment Tribunal had rejected this submission: Decision - paragraphs 2-12.  We see no error of law here in the reasons given by the Employment Tribunal for rejecting this submission. 

Ground Two

10.	The second ground of appeal is that on its true construction the School Teachers’ Pay and Conditions Document gave the Appellant the part to exercise its discretion to “protect” the Respondent’s salary for a limited period.  Mr Lane therefore argues that there is no unlawful deduction under section 13 of the Employment Rights Act 1996.  This is the construction point.  The Employment Tribunal recorded the parties’ submissions:  Decision - paragraph 33(5) and reached its conclusion in favour of the Respondent:  Decision - paragraphs 34-39.  The Employment Tribunal followed the decision of this Tribunal (His Honour Judge Peter Clark) in Governing Body of the Plume School v Mr P Langshaw & Miss F Thomas Appeal Number EAT/67/6/01, Unreported Judgment 31 July 2002.  That decision involved two other teachers from the same school who were also affected by the reorganisation.  Mr Langshaw was, at the relevant time, employed in the Arts Faculty and Miss Thomas in the Modern Languages Faculty.  Each accepted a new slot in a post carrying lower responsibility and consequently lower pay on the pay scale than their previous pay.  Their pay protection was for one year.  After the move to the lower point in the salary scale each presented a complaint of unlawful deductions from wages to the Employment Tribunal.  The relevant passage in the judgment of His Honour Judge Clark is at paragraphs 15-21 where he says this:

“15	Mr Lane challenges the Tribunal’s finding that the discretion granted by paragraph 25.1.2 of the 1998 Document was “all or nothing”, that is to say, that either pay protection was granted or it was not.
16	He submits that, in the absence of any express words permitting or prohibiting a temporal limitation on the grant of pay protection it was lawful for the Respondents to impose such a limit.  If that be right the parties agreed to a lawful variation in the Applicants’ contracts of employment in writing.  There was no unlawful deduction from wages after 1 September 2000.
17	In support of that submission he points to the express provisions of paragraph 10 of the 1998 Document.  There, a distinction is drawn between, for example, points in the pay scale awarded to a teacher for possessing a good honours degree, which are permanent (paragraph 10.2.3) and points awarded for responsibility which may be temporary or retained while the teacher remains in post.  (Paragraph 10.3).  No such indications are given in paragraph 25.1.2.
18	Secondly, he relies upon my judgment in Wareing and Chidwick -v- Anfield Community Comprehensive School and Another [EAT 890/99. 18 December 2000 Unreported].  That case involved consideration of paragraph 24.1.2 of the 1997 Document in similar terms to paragraph 25.1.2 of the 1998 Document.  He relies particularly on one sentence in the judgment, at paragraph 28, where I said, in relation to the case of Mr Wareing:
“We cannot accept that the temporal limitation was itself unlawful.”
19	We reject those submissions.  In our judgment, read as a whole, paragraph 25.1.2 is, as the Tribunal held, an all or nothing provision.  Either discretion is exercised by the authority in favour of treating the teacher as continuing to hold his former post for all salary purposes or it is not.  If the latter, then the question arises as to whether such refusal was unreasonable.  That pay protection continues whilst the teacher holds the new post; it cannot be arbitrarily limited in time as in the present cases.  
20	Paragraph 10 of the 1998 Document is concerned with the awarding of points on the pay scale.  That is a different exercise to that of pay protection under paragraph 25.  It is concerned with the calculation of pay, not the protection of salary once calculated.
21	As to the case of Wareing and Chidwick, Mr Chidwick received pay protection without limited of time.  Mr Wareing’s pay was protected for a period of four years in the first instance; it was then to be reviewed, at which point the reasonableness criterion applied.  In these circumstances both cases were factually different from the present cases.  We expressed the view, in Mr Wareing’s case, that the temporal limitation in those circumstances was not unlawful.  However, that observation was made in the context of our finding that it was not open to Mr Wareing to challenge the lawfulness of he Respondent’s limitation, the point not having been taken below.  It follows that that observation did not form part of the ratio in that case.”

11.	We agree with that reasoning and apply it to this case.  In our judgment there is no discretion in Clause 32.1.2 of the School Teachers’ Pay and Conditions Document 1999 which permits the Appellant to exercise its discretion for a period of one year only.  There is no difference between the wording of the 1998 and 1999 documents.

Ground Three

12.	The third ground of appeal is that the temporal limitation of one year decided upon by the Appellant to continue payment was not unlawful and the Employment Tribunal had no power to sever it.  In other words the proper course for the Employment Tribunal was to declare that the whole exercise of discretion was invalid.  Mr Lane relied upon Pyx Granite Company Limited v Ministry of Housing and Local Government [1958] 1Q.B.554.  That decision is a decision about severance of certain conditions in the grant of a planning commission by the relevant Minister.  Mr Lane cited that authority to the Employment Tribunal which rejected his argument on severance: Decision - paragraph 32(6).  We agreed with the reasoning of His Honour Judge Clark in the Langshaw and Thomas cases: Judgment - paragraphs 22-24 and we follow it.  It was perfectly proper in law for the Employment Tribunal to sever the offending session on the fact of this case.

Ground Four

13.	The fourth ground of appeal that as it was the unchallenged evidence that it would only offer one year’s salary protection to the Respondent there was accordingly no evidence on which the Employment Tribunal could find that the Appellant intended as a matter of principle to offer salary protection.  We cannot accept that submission.  It is quite clear that both parties were proceeding on the basis that the Appellant was exercising its discretion under Clause 32.1.2 of the School Teachers’ Pay and Conditions Document 1999.  The fact that it had no legal power to impose a time limitation is immaterial.  The limitation could be lawfully severed as we have held.  In essence this argument is tied up with the previous argument on severance.

Ground Five

14.	Ground Five is that the Employment Tribunal should have found on the evidence that if the Respondent was entitled to salary protection without limit of time he waived such entitlement alternatively was estopped from relying on it.  That submission was made to the Employment Tribunal:  Decision - paragraph 33(4).  It was not considered by the Employment Appeal Tribunal in the Langshaw and Thomas cases because it was a new point in that case: Judgment of His Honour Judge Clark, paragraphs 25-30.  However, it is live before us.  In our judgment this point is disposed of by the specific finding of fact by the Employment Tribunal at paragraph 33(4) of its Decision:

“The Tribunal find that the Respondent did not rely on any representation made by the Applicant in offering him the “slotting in” position by letter on 7 July 1999.  They did so based on their understanding of their powers under the relevant School Teachers’ Pay and Conditions Document and the School Teachers’ Pay and Conditions Act 1991.  We do not accept that the doctrine of estoppel is properly applicable in this case.”

15.	In the light of that finding of fact it is not open to the Appellant to rerun the argument which he lost before the Employment Tribunal.  There is no appeal against that finding of fact on the grounds that there was no material upon which the Employment Tribunal could come to that finding of fact or that it was perverse.

Ground Six

16.	The sixth ground of appeal is that the reversion to a lower rate of remuneration after a year in conformity with the agreement made between the parties was not a deduction from the Respondent’s wages.  The Tribunal record this submission as being made to it:  Decision -paragraph 33(7).  It found against the Appellant:  Decision - paragraph 39.  We agree.  The submission adds nothing to the other grounds of appeal.
Conclusion

17.	For these reasons this appeal is dismissed.