Appeal No. EAT/835/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 26 July 1994

	Before

	THE HONOURABLE MR JUSTICE MUMMERY (P)

	MR D J JENKINS MBE

	MR T C THOMAS CBE

ARTHUR H WILTON LTD	APPELLANT

MR T PEEBLES & OTHERS	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR O BRABBINS
(Consultant)
Peninsula Business Services Ltd
Stamford House
361/365 Chapel Street
Manchester M3 5JY

For the Respondents	MR J O'HARA
Solicitor
GMB Legal Officer
GMB
22-24 Worple Road
London SW19 4DD

	MR JUSTICE MUMMERY (PRESIDENT):  This is an appeal against the decision of the Industrial Tribunal held at London (South) on 19 July 1993.  For reasons notified to the parties on 26 August, the Tribunal unanimously decided that particulars on wages should have been included in any statement under Section 1 of the Employment Protection (Consolidation) Act 1978 and the particulars should have been that the applicant's wages were payable in accordance with rates agreed from time to time between the Thermal Insulation Contractors' Association on the one hand, and the General Municipal Boilermaker and the Transport and General Workers Union, on the other hand.

	The respondents to the application were a company called Arthur H Wilton Ltd.  The applicants were three employees of the respondent, Mr Peebles, Mr McEwen and Mr Taylor.  The respondent company appeals against that decision.

	There was also a cross-appeal because the Tribunal went on to hold that the applicants' right to recover unlawful deductions under the Wages Act 1986 was limited to a period of three months before the presentation of their applications.  Having reached that conclusion, the Tribunal Chairman was under the impression that the applicants withdrew their claims in order to seek their remedy through the County Courts.  The employees cross-appeal against that decision.

	We are, therefore, asked to decide an appeal by Arthur H Wilton Ltd against the decision on the particulars of wages and we are asked to decide a cross-appeal on the questions of whether the employees are entitled under an order of the Industrial Tribunal to recover wages or whether there is some bar by reason of them having withdrawn their proceedings and whether there is some limit, such as the three-month period, on the amount that they can recover.

	In order to understand the arguments presented on each side, it is necessary to fill in some of the background to the dispute.  The employees work as thermal insulation engineers for Arthur H Wilton, who carry on business as thermal and acoustic insulation engineers.  They worked for varying periods of time:  Mr Peebles since 1974 and Mr McEwen since 1968, but the actual periods of their service are not relevant to the dispute under the Employment Protection (Consolidation) Act 1978 and the Wages Act 1986.

	They presented their applications to the Industrial Tribunal on various dates complaining of a failure on the part of the employer to provide written particulars of employments and of unlawful deductions from wages in the form of the failure of the employer to pay increases for 1992 and 1993 under the Thermal Insulation Contractors Agreement.

	The complaints referred to the fact that, under that Agreement, there had been pay awards, but the employer company refused to honour the increases covered by the National Agreement for 1992 and 1993.  They wanted the Tribunal to make a ruling that the wage increases for 1993 and 1993 should be paid.  

	The employer contested the proceedings in the notice of appearance dated 28 October 1992.  In the notice of appearance they described the nature of their business and disputed the liability to make the payments.  They contended that the applicant, Mr McEwen did not have a contract of employment covered by the national agreement.  They admitted that the company was part of the Association, but argued that the agreement was with that body and not with the employees.  They referred to the circumstances in which the company formed the view that they could not afford to pay any pay increase and alleged that the employees had accepted a pay cut because of the drastic downturn in trade and the need to cut costs.  They said that the situation had been explained to the applicants in writing by a letter dated 12 January 1993 and also by an earlier letter in a similar form in relation to 1992.

	Those documents state broadly what the issues were before the Industrial Tribunal at the hearing last year.  

	The issues which the Tribunal had to decide fell into two parts, but they were inter-connected.  There was first the question arising under the obligation of the employer to supply a statement of particulars under the 1978 Act.  The decision on that also related to the liability of the employer in respect of any deductions that were not authorized and, therefore, were recoverable under the Wages Act 1986.

	The facts found by the Tribunal were as follows:  the applicants were found all to be long-serving employees.  It was common ground that none of them had received a statutory statement of terms and conditions of contract under Section 1 of the 1978 Act.  Section 1, in the form in which it was then in force, provided that an employer should give to an employee not later than 13 weeks after the beginning of his employment, a written statement in accordance with the section.  The section provides that a statement, as well as identifying the parties and specifying the commencement date of the employment, should contain particulars of terms of employment relating, among other things, to the scale or rate of remuneration or the method of calculating remuneration and the intervals at which remuneration is paid, whether weekly, monthly or by some other period.

	Under Section 11 of the 1978 Act reference can be made to an Industrial Tribunal.  It is provided that:

		"Where an employer does not give an employee a statement as required by section 1 ... the employee may require a reference to be made to an industrial tribunal to determine what particulars ought to have been included or referred to in a statement so as to comply with the requirements of the relevant section.

		(2)	Where -

		(a)	a statement purporting to be a statement under section 1 ...

		...

		has been given to an employee, and a question arises as to the particulars which ought to have been included or referred to in the statement so as to comply with the requirements of this Part, either the employer or the employee may require that question to be referred to and determined by an industrial tribunal."

	The only decision which needs to be referred to to show the extent of the jurisdiction of the Tribunal is Eagland v British Telecommunications Plc [1990] ICR 248 where at page 256 the Tribunal pointed out that the:

		"Industrial Tribunal had no jurisdiction in contract ... its function [under Section 11] is to establish the accuracy of the particulars in the statutory statement, and not to recast the contract between employer and employee nor to interpret the terms agreed."

	Mr Justice Wood emphasized that the Tribunal was:

		"not concerned with the fairness or unfairness of the relationship between employer and employee"

All that is relevant is the contractual position.

	He went on to point out that it might be possible for a Tribunal to infer a term from surrounding circumstances.  It may be necessary to imply a term using the contractual approach.

	The question which arises is whether the Tribunal in this case exceeded its jurisdiction as Mr Brabbins has contended on behalf of the employer.  To see whether it did we must look at what the Tribunal decided.  The Tribunal decided that, in the absence of any written contract of employment or document and in the absence of any negotiations ever taking place between the respondent and the applicants as to what the wages should be, they should imply, on the basis of the material before them, that the wages of the applicants were in accordance with the rates agreed between TICA and GMB.

	What the Tribunal found was that the employer company was a member of TICA, which is short for Thermal Insulation Contractors' Association.  Part of that Association's functions was to negotiate wages for thermal insulation engineers with the General and Municipal Boilermakers (GMB) across the industry.  Normally they negotiate annual increases.  They found that TICA was not an agent for the company for wage-bargaining purposes and the company had never negotiated wages with the GMB.  

	The Tribunal identified the question before it as to whether the usually annual increases referred to should be incorporated into the employees' contracts as implied terms.  They reviewed the evidence.  It was undisputed that, during the whole course of the employment of the employees until January 1992, those employees were regularly paid in accordance with the rates fixed by TICA and GMB and regularly received all increases.  They were never paid less.  They were never paid more.

	The company tried to contend they were not obliged to pay those rates of pay, or those increases.  They said they considered them annually, but negotiated them with their work force.  The Tribunal did not accept that contention.  The Tribunal said that the company had:

		"declined to provide the details required by statute, [and therefore] the Tribunal must look to find what evidence there may be on the amount and calculation of the .. wages.  The best evidence in this case is the practice of the parties over 20 years and more.  That practice was that the Respondent [company] paid and the Applicants accepted the rates negotiated by TICA.  In the circumstances [the Tribunal] have no difficulty in implying this term into the ... contracts of employment [of the applicants]."

	They stated, as was not disputed, that the TICA-agreed increases were not paid at the beginning of 1992.  They went on to hold that the applicants had all made objections to this.  They were told that the reason was financial difficulty and received assurances to the effect that the increases would be paid later.  The employees accepted the position under protest.  The Tribunal stated that:

		"as a matter of fact and law ... there was no mutually agreed variation of their contracts of employment to the effect, for example, that increases would be paid only at management discretion.  They trusted the Respondent to pay them when conditions improved but did not abandon their legal rights."

	The respondent company appeals against that decision on grounds which this Tribunal has difficulty in understanding.  As we understand the argument, the employer company contends that the Tribunal had no jurisdiction to make the decision it did on particulars on wages.  The Tribunal misunderstood the position under Section 11.  The case fell, outside Section 11.  It is submitted in Mr Brabbins' outline argument that:

		"The heart of the Appellant's argument is that the Industrial Tribunal did not have the jurisdiction to include in any statements under Section 1, a term relating to wages being paid in line with the TICA agreement."

	The argument proceeded on the basis that the letter dated 12 January 1993, written to the employees, was a variation of the contract and a statement to that effect.  The Tribunal misunderstood their powers by seeking to make a declaration that the wages that should have been included in the statement were those paid in accordance with the rates agreed from time to time between the Association, to which the respondent company belonged, and the Union.  The argument went on that the Tribunal had also come to an inconsistent decision since they had found, on the one hand, that the employees had worked under protest and, on the other hand, that there had been an agreement on the method of calculating wages.

	The submission of Mr Brabbins was, in those circumstances, that it was not open to the Industrial Tribunal to make a declaration that the statement issued under Section 1 should have stated that the wages were calculated in line with the TICA agreement.

	We have come to the conclusion that these arguments are fallacious, for these reasons.  The Tribunal were entitled, on the evidence before them, to come to the conclusion that there was an implied term in the contracts of employment that the wages of the employees were to be those determined from time to time by the national agreement between TICA and GMB.  There must have been some agreed rate of remuneration.  There was no evidence from the employers that it was any other than what had been the practice over a period of 20 years, i.e., to pay TICA rates.

	Mr Brabbins appeared to accept that that was the position down to the beginning of 1992.  His argument was that that was altered by the letters which informed the employees that the company was not in a position to afford to pay the increased rates of pay.  That argument is fallacious.  It is an attempt to persuade us that a contract, which is a matter of agreement between the parties, can be unilaterally varied by a party who acts in breach of it.  If the implied term was, as the Tribunal found, to pay TICA rates, it was a breach of contract on the part of the employer company to refuse to pay the increased rate in accordance with that agreement.  The employer could not produce a different rate of remuneration by acting in breach of the existing contract.  It follows that it is impossible for Mr Brabbins to argue that the letter of 12 January 1993 is the document that provides the particulars required under Section 1 in relation to rates of remuneration.  The argument appears to be that a statement of remuneration has been provided by a company which refuses to pay the rate agreed.  That is not a tenable argument.

	The Tribunal was, in our view, correct in making the declaration that the particulars of wages which should have been included in the statement were those payable in accordance with the rates agreed between TICA and GMB.

	The second point on the appeal raised by Mr Brabbins was initially stated in an extreme form that the Tribunal had erred in law in finding a fact with no evidence to support it namely, that the employees worked under protest to a change in their terms and conditions of employment.  The argument was that the particulars could not be the rate of remuneration agreed between TICA and GMB, because an agreement had been reached the employer and the employees that there would not be increases.  The fact relied on for this agreement was that the employees had gone on working and had, therefore, agreed to accept that there would be no increase.  This argument is without legal or factual foundation.  First, as a matter of law, the House of Lords have clearly stated, as a general principle, that an employee who works under protest cannot be said to have agreed the wages paid to him by his employer with full knowledge that the employee does not agree to accept those as the correct wages.  Payment of wages to an employee, who protests that he is not being paid all he is entitled to, cannot be construed as an acceptance by him of new terms of remuneration.  In the case of Rigby v Ferodo Ltd [1988] ICR 29 it was decided that the employee by:

		"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"

	The main part of the Judgment of Lord Oliver in support of that proposition appears on page 35B-G.

	As a matter of evidence, the ground of this appeal is without foundation.  We have the notes of evidence.  It clearly appears from those that there was evidence before the Tribunal that the employees never agreed to a cut in wages.  They never agreed to forego the increase. They objected.  What the point came down to in the end was the submission by Mr Brabbins that they had not objected, complained or protested as systematically and vociferously as they might have done.  That argument is not open to him on this appeal.  It is a submission on the facts.  It is, in any case, legally irrelevant.  It is not necessary for an employee to embark on systematic or vociferous complaints in order to prevent an agreement from being foisted on him unilaterally by his employer.  As long as he has made it clear that he is not agreeing to the reduction in wages he cannot, be continuing to work, be bound by an agreement to accept a reduction.

	We reject both of the arguments raised by Mr Brabbins on the appeal.  In our view, there was no error of law in the decision of the Tribunal.  Their findings of fact were supported by the evidence.  The conclusions of law were in accordance with the provisions of Section 1 and Section 11 of the 1978 Act and of the decision of the Employment Appeal Tribunal in the case of Eagland.

	That leaves the point on the cross-appeal.  The cross-appeal produces a measure of agreement between the parties.  It is agreed between them that the Chairman, in the concluding paragraph of the decision, misunderstood the situation which arose at the end of the hearing.  Paragraph 11 of the decision states:

		"The Respondent submitted that even if the terms of the contract were as we have found, the Applicants' right to recover any unlawful deductions under the Wages Act 1986 is limited to the period of three months before the presentation of their Originating Applications.  We have concluded that this submission is correct.  In the circumstances the Applicants' claims under the Wages Act are withdrawn and the Applicants will seek their remedy through the courts."

	Mr Brabbins agrees that Mr Stevens, who represented the employees at the hearing, did not withdraw the applications.  That seems to be consistent with the notes of the Chairman on this part of the case.  We proceed to deal with the point raised on the cross-appeal on the basis that the employees had not withdrawn their applications.  

	The point is the extent to which the employees are entitled to recover for deductions.  There cannot be any dispute that, in view of the findings of the Tribunal which we have referred to and upheld, there were deductions made from the wages of the employees in contravention of the Act.  Section 1 of the 1986 Act imposes a general restriction on deductions from wages by employers unless they are authorized.  Section 8(3) provides that there are to be treated as deductions deficiencies which occur:

		"Where the total amount of any wages that are paid on any occasion by an employer to any worker employed by him is less than the total amount of the wages that are properly payable by him to the worker on that occasion ..."

	In this case, there were deductions because what was properly payable to each of these employees was the increase in wages which occurred through the medium of the TICA-GMB agreement.  They were not paid what was due to them.  There were deductions.

	The Tribunal thought that they only had jurisdiction to order a maximum of three months before the period of the presentation of the applications plus, of course, anything that was deducted after the applications were made.

	Mr Brabbins seeks to uphold that finding, but we have reached the conclusion that the Tribunal was in error on this point.  We shall allow the cross-appeal.  The error was to confuse the three months' limitation on presenting an application to an industrial tribunal under the Wages Act with the amount that can be recovered on an application  which is brought within the time period.  The relevant provisions are in Section 5:

		(1)	A worker may present a complaint to an industrial tribunal -

			(a)	that his employer has made a deduction from his wages in contravention of section 1(1)"

It is clear from Section 5(2) and (3) that the Tribunal cannot entertain a complaint unless it is presented within a period of three months beginning, in the case of a complaint relating to a deduction by the employer, with the date of payment of the wages from which the deduction is made.  Section 5(3) deals with the complaint which is brought in respect of a series of deductions and provides that subsection (2) is read as referring to the last deduction or payment in the series.

	The position is, therefore, this:  Section 5(1) deals with the jurisdiction of the Tribunal. Section 5(2) and (3) prescribe the period within which the jurisdiction must be invoked.  If there is a series of deductions, week after week or month after month, the three-month period runs from the date of the last deduction.  Nothing is said in those provisions which limits the amount that can be recovered as deductions.  The provision relevant to what the Tribunal can order is Section 5(4).  That provides:

		"Where a tribunal finds that a complaint under this section is well-founded, it shall make a declaration to that effect; and ...

			(a)	in the case of a complaint under subsection (1)(a) or (b), the tribunal shall order the employer to pay to the worker the amount of any deduction ... made ... in contravention of section 1;"

	It is clear from that provision that, if the complaint is well-founded, there is no limit on the amount of deductions which can be ordered to be paid by the employer to the worker.  In brief, the error of law on the part of the Tribunal was to transpose the three-month time limit for bringing a complaint into the provisions which concern the amount which a Tribunal can order an employer to pay in respect of deductions.  There is no three-month time-limit on that.  The position in this case is that the deductions continued in a series.  The employees presented their applications within three months of the last deduction in the series.  The Tribunal found that the deductions complaint was well-founded.  They therefore had jurisdiction to order the employer company to pay to the workers all the deductions that they had made from the beginning of the period in which they started to make them.  The employees are entitled to recover deductions dating from the first date on which the employer failed to pay the increase, which was agreed in the TICA-GMB national agreement.  They will be entitled to recover all deductions which have been made down to the date when the calculation is made of the full amount which they are entitled to recover.

	We mention that Mr Brabbins presented an argument which, in our view, was misconceived and involved a misreading of the effect of Section 8(3) and the decision of the Employment Appeal Tribunal in Murray v Strathclyde Regional Council [1992] IRLR 396.  We are unable to see anything in that decision, (in particular, paragraph 8, which was relied on by Mr Brabbins) or in Section 8(3) which supports his submission that the workers' claims are limited to deductions that were made within the three months' period before they issued their applications.

	We therefore allow the cross-appeal.  The Order which we make in consequence of our decision on the arguments is this:  that the appeal is dismissed and the cross-appeal is allowed.  We confirm the decision of the Industrial Tribunal under Sections 1 and 11 of the 1978 Act as to written particulars of the employment.  We make a declaration that under Section 5(4) of the 1986 Act, that the complaints about the deductions under the Act are well-founded.  We would direct that, in the absence of agreement between the parties, which we hope could be achieved in the interests of saving time and costs, the matter has to be remitted to the Industrial Tribunal to calculate the amounts which should be paid to each of the employees in respect of the unlawful deductions.  We would emphasize that there is no point in going back to the Tribunal simply to conduct an arithmetical exercise of calculation.  That would lead to further delay and expense.  Unless there is any substantial dispute of principle (we have not been informed of one), it should be possible for the parties, on leaving this building this afternoon, to reach a figure, or an agreed formula for calculating the figure, which is due.  This dispute has been going on since the beginning of 1992.  We are now in the middle of 1994.  Any further delay and expense should be avoided.