Appeal No.	 EAT/1079/96

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 11 March 1997

Before
 THE HONOURABLE MR JUSTICE KEENE
MR L D COWAN
MRS P TURNER OBE

MS J M ANDERSON	APPELLANT

RAILTRACK PLC	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR WESTGATE
(of Counsel)
Messrs Russell Jones & Walker
Solicitors
Swinton House
324 Gray's Inn Road
London
WC1X 8DH	
For the Respondents	MR LYNCH
(of Counsel)
Messrs Hay & Kilner
Solicitors
30 Cloth Market
Newcastle Upon Tyne
NE1 1EE	

	MR JUSTICE KEENE:     This is an appeal from a decision of an Industrial Tribunal that the Respondent had not made an unlawful deduction from the Appellant’s wages.  That decision, by which the Tribunal declined to make a declaration under the Wages Act 1986, was entered on the register on 16 August 1996 and was made by a Tribunal sitting at Newcastle upon Tyne.

	The issue between the parties was whether the Appellant was contractually entitled to payment of an allowance known as an “aggregation allowance”.  There was no dispute that the Respondent had not paid her such an allowance from 26 June 1995 onwards.  An aggregation allowance was a payment made to staff who worked at more than one railway station.  Before 26 June 1995 the Appellant had worked at two stations and so was entitled to the allowance.  However, on 26 June she moved to work at Newcastle only.  Nonetheless she claimed to be entitled to the allowance on what is described as a “personal basis” because of an agreement reached in 1984 between the predecessors to the Respondent and the Appellant’s union’s Eastern Regional Sectional Council A.  That 1984 agreement was a local rather than a national agreement.

	It is accepted by the Appellant that she would not be entitled to the aggregation allowance if the terms of the 1984 agreement did not form part of her own contract of employment as at 26 June 1995 and onwards.  Therefore, the critical question was whether the 1984 agreement did form part of her contract of employment at that time in June 1995 and subsequently.  The Tribunal below found that it did not.

	We note in passing that with the privatisation of the rail system the Appellant’s employer changed from being British Rail, as it had been, to being the Respondent.  No one, however, suggests that that in itself brought about any alteration in her contract of employment.

	The Tribunal seems to have decided that originally the 1984 local agreement did form part of her contract of employment, but the Tribunal referred to what it described as a “comprehensive book” produced by the Appellant’s union, the Transport Salaried Staffs’ Association (TSSA).  That book was entitled “Rates of Pay and Conditions of Service”.  It related to salaried staff and the version before the Tribunal was dated April 1994.  It was generally referred to as the “Red Book”.  According to the Tribunal the Red Book was stated to contain the terms and conditions of employment as at April 1994.  It was updated from time to time, so as to contain or to attempt to contain the up to date collection of agreements between the relevant union and the employer.

	The 1984 agreement had dealt with the position of relief staff who had been receiving an aggregation allowance but who had been “displaced”, that is to say, moved to another job.  It made provision for such staff to retain their allowances on what was a called a “personal basis”, presumably so that their income would not fall.  However, they retained their allowances on that basis only if certain conditions were met.  Thus, such an allowance would be withdrawn if a relief post became available and the employee declined to apply for it.

	The conditions of service as at 1994, set out in the Red Book, made provision for relief staff to be paid an aggregation allowance, but not if they were attached to and employed at only one station.  Those in the latter category were expressly excluded from entitlement.

	The Respondent argued before the Industrial Tribunal that the 1984 agreement had been superseded by the conditions of service as contained in the Red Book.  That argument was, in essence, accepted by the Tribunal which so said in its concluding paragraph, paragraph 12.  That is a vital paragraph in the decision about which there has been much argument before us and we shall therefore quote most of paragraph 12.  It reads as follows:

“12.  On the balance of probabilities we have decided that the 1984 Agreement is not part of the applicant’s present contract of employment.  We say this for a number of reasons.  The Red Book is a collection of terms and conditions of employment which has been collated by the union, it was up to date at the time of its compilation in April 1994 and it incorporated all changes that had taken place over the years.  It contains in one book all the various agreements.  It does not provide for the incorporation of the 1984 Agreement relating to aggregate allowances.  The 1984 agreement was a local agreement but there were others.  Those who prepared the Red Book were aware of those, but they did not specifically incorporate those negotiated terms.  The agreement of 1994 therefore supersedes those of earlier time and contains all of the terms of the contract between the employers and the employee.  The Red Book contains no provision at all to entitle an employee to receive an aggregated allowance on displacement, nor do the terms of redundancy and displacement that we have in our bundle provide for such a situation either.  The 1994 Red Book is quite specific when it states that an employee is not entitled to an aggregated allowance if they work at one station. ...”

	That will suffice from paragraph 12.  Consequently, the Tribunal found against the Appellant.

	There is a certain degree of common ground between the parties to this appeal.  They agree that the Tribunal found that the Appellant’s contract of employment incorporated the agreements reached between British Rail and her union, the TSSA, and it is therefore agreed that if those agreements were varied subsequently, then her contractual terms would likewise change.  Both parties also agree that the determination by the Tribunal of what her contractual terms were in June 1995 and thereafter is a question of fact and that, therefore, this Appeal Tribunal can only intervene on certain limited grounds.  

	The Appellant does not argue perversity and Mr Westgate on her behalf has expressly abandoned a point on an alleged breach of natural justice which had been raised in the Notice of Appeal.  But he does attack the Tribunal’s decision on two grounds.  His first and main ground is that the reasoning which led to the finding that the 1984 agreement no longer formed part of the Appellant’s contract discloses an approach by the Tribunal which is wrong in law.  He submits, and indeed it is not in issue, that the Tribunal found that the 1984 agreement initially did form part of her contract when she was appointed as a Clerical Officer grade 3 relief clerk in 1990.  Thus, the Tribunal’s conclusion implies that, at some stage between then and 1995, the terms of her contract had been varied.  But, he says, such a change in contractual terms could not be brought about by the unilateral action of the union or indeed by any one party to the contract.  So far in the argument there is no real disagreement between the parties.

	Mr Westgate then points to paragraph 12 of the decision and contends that in that paragraph the Tribunal goes wrong in law, either by treating the 1994 Red Book as itself being an agreement, or by regarding it as having direct contractual effect in some way.  He points to the use of the word “agreement” to describe the Red Book, half-way through paragraph 12 and he submits that there is a passage in that paragraph which suggests that the Tribunal thought that the compilers of the Red Book had unilaterally dropped the 1984 agreement and possibly other local agreements, thus giving to those compilers a power to vary agreements which they did not possess.  The passage relied upon for that argument is that which reads:

“The 1984 agreement was a local agreement but there were others.  Those who prepared the Red Book were aware of those, but they did not specifically incorporate those negotiated terms.  The agreement of 1994 therefore supersedes those of earlier time and contains all of the terms of the contract between the employers and the employee.”

	Consequently, it is submitted on behalf of the Appellant that the Tribunal seems to think that the Red Book could have direct contractual effect and could itself abandon a then existing agreement.  In further support of that argument it is pointed out that the Red Book does not expressly refer to any agreement which revoked the 1984 agreement prior to the 1994 edition of the Red Book, and nor does the Tribunal in its decision.

	The second ground on which the Tribunal’s decision is attacked is really an alternative to the first, i.e. if it is not clear that the Tribunal did approach the question of the variation of the contract on an incorrect legal basis, then at the very least its reasoning in paragraph 12 is unclear.  Mr Westgate submits that so unclear is that reasoning that it amounts to a failure to give adequate reasons for the decision.

	For the Respondent, Mr Lynch emphasises that the finding by the Tribunal that the Red Book contained the Appellant’s contractual terms as at June 1995 is a finding of fact.  On the other hand, he concedes that if there was a misdirection of law made “en route” to that finding of fact, then this Appeal Tribunal could intervene.  Moreover, he accepts that to proceed on the basis that the officers of the union who compiled the Red Book could unilaterally drop an existing agreement, such as the 1984 agreement, would itself amount to an error of law.  However, it is submitted on behalf of the Respondent that the Tribunal did not proceed on that basis.

	Mr Lynch argues that the Tribunal did no more than regard the Red Book as evidence of what the contractual conditions were as at April 1994 when it was published in that edition and as at June 1995, when this particular dispute arose.  It is contended that various passages in the decision show that the Tribunal fully understood how the Red Book operated and what its status was and that when they used the word “agreement” to describe it in paragraph 12, they were merely using that word as a form of shorthand to describe the collation of agreements which it truly was.  He contends that when the Tribunal uses the word “incorporated” in the third sentence of paragraph 12 of its decision, it clearly meant simply included in the Red Book and that that was what it meant in the remaining part of that paragraph.  Mr Lynch argues that overall the Tribunal was simply saying that the 1984 agreement is not in the Red Book and therefore that demonstrates that it was no longer extant by that date.  He says that the Tribunal did not have to decide how it was that those existing terms had come about and how other earlier terms had disappeared, but merely what the existing terms were in June 1995.  Having found that the Red Book was up to date and comprehensive, they were entitled to conclude that, since the 1984 agreement was not in it, it had at some stage been terminated or varied so as to remove the particular provision with which this hearing was concerned.  

	So far as the ground of appeal based on inadequate reasons is concerned, Mr Lynch submits on behalf of the Respondent that it is well established that such reasons do not have to be elaborate or do more than tell the parties why they have won or lost.  He relies on Meek v Birmingham District Council [1987] IRLR page 250 and UCATT v Brain [1981] IRLR 225.  The Respondent contends that the reasons given by the Tribunal are clear and adequate.  

	We have no doubt that the Tribunal’s finding that the 1984 agreement did not form part of the Appellant’s contract of employment as at June 1995 was a finding of fact, one which is not in itself subject to appeal.  Moreover, there has been no application in this case for the Chairman’s notes of evidence to be produced and, consequently, there can be no submission that there was no evidence for that finding of fact which the Tribunal reached.  It is that combination of factors which has confined this appeal to the two grounds advanced by Mr Westgate.  

	We begin by considering the first of those, namely that the Tribunal below proceeded on an incorrect legal basis when approaching this issue of whether the 1984 agreement still formed part of the Appellant’s contract in 1995.  It is in our view important that the Tribunal’s decision should be read as a whole because otherwise a false impression may be gained from just two or three sentences.  

	The Appellant’s submission here turns on whether or not the Tribunal regarded the 1994 Red Book as an agreement or at least as something having direct contractual effect, capable in itself of sweeping away the 1984 agreement. The three sentences in paragraph 12 on which reliance is placed by the Appellant and which we have quoted earlier might seem to give that impression.  However, on a fair reading of the decision as a whole, it seems clear that the Tribunal was well aware of what the Red Book was and was not.  Thus, in paragraph 3 the Tribunal refers to that book as “a comprehensive book produced by the union”, the TSSA.  The Tribunal was thus in no doubt as to its unilateral nature.  It is then said by the Tribunal that the book “contains terms agreed between the management and union going back many years, some we are told to the 1920s.  The Red Book is stated to contain the terms and conditions of employment as at April 1994.”

	When one comes to paragraph 12 the Industrial Tribunal describes the Red Book as “a collection of terms and conditions of employment which has been collated by the union, it was up to date at the time of its compilation in April 1994 and it incorporated all changes that had taken place over the years.  It contains in one book all the various agreements.”  

	In the light of those passages the Tribunal must have been clear in its own mind that the Red Book was a compilation of agreements which had been reached and which were still extant, and not in itself a new agreement of any kind.  When, a few sentences later in paragraph 12, it refers to the Red Book as an “agreement” it can only have been using that expression as a form of shorthand.  We conclude, from the passages to which we have referred, that it was well aware of the role and status of the Red Book.  

	It goes on in paragraph 12 to note that the Red Book did not provide for “the incorporation of the 1984 agreement relating to aggregate allowances”.  The word “incorporation” there was presumably being used in the same sense as in the previous sentence, namely as meaning “the inclusion in the Red Book”.  As such, this sentence was a simple statement of fact.  The 1984 agreement did not appear in the Red Book.  The following sentences, which include the reference to the compilers of the Red Book not having incorporated certain terms in it, again simply mean in our view that those terms were not to be found in the Red Book.  We do not read that passage as indicating that the Tribunal believed that the Red Book itself, or the compilers themselves, would be varying the terms of agreements and having thus a direct contractual effect.  It seems to us that the Tribunal was merely regarding the Red Book as setting out the up to date terms of employment and if some earlier agreement was not in it, then that earlier agreement must have been varied or discharged.

	Given the Tribunal’s clear understanding that the Red Book was a compilation of agreements, up to date and comprehensive, it must have regarded it merely as evidence, very compelling evidence but no more, that the 1984 agreement had gone.  There was nothing wrong with that as an approach in law.  The Tribunal did not need to concern itself with how that 1984 agreement had gone, once it had reached the conclusion as a matter of fact that the Red Book was an up to date and comprehensive collection of the extant agreements.  Whether another Industrial Tribunal would arrive at the same conclusion in relation to the 1984 agreement would depend on the evidence presented to it and by definition the same must be true in relation to any other local agreement.  These are questions of fact, not of law, and the decision reached by the Industrial Tribunal in this case does not extend beyond the facts presented to it and the parties to it in this particular case.  We therefore do not find any substance in the Appellant’s first ground of appeal.  

	We were for a time attracted by the Appellant’s second ground, namely that the Tribunal below failed to give clear reasons for its conclusion on this aspect of the case.  We can see that the wording of those three sentences from paragraph 12, on which Mr Westgate relies and which we have quoted earlier, could have been happier, especially were they to be looked at in isolation.  Nonetheless, when the whole of paragraph 12 is read and when that paragraph is seen in the light of earlier paragraphs, such as paragraph 3, its meaning is in our view sufficiently clear; that being the meaning which we have attributed to it in our conclusions on the Appellant’s first ground of appeal.

	It was at one point argued by Mr Westgate that paragraph 12 was unclear as to whether merely the 1984 local agreement or other local agreements had been swept away because they did not appear in the Red Book.  That too, he says, would show inadequate reasons, unclear reasons being given by the Tribunal.  The Tribunal was, of course, not called upon to adjudicate in respect of other local agreements beyond the 1984 one to which we have referred.  But it seems to us that it was simply saying that the Red Book was comprehensive and up to date and that nothing formed part of the extant collective agreements unless it was included in that book.  Any lack of clarity in that respect cannot in any event assist the Appellant, since it is clear that the 1984 agreement, upon which her case depends, was found by the Tribunal not to be part of her conditions of contract as at June 1995.  She was not concerned with the existence or non-existence of other local agreements, but only with that March 1984 local agreement.

	Consequently, we conclude that the Tribunal here did give adequate reasons for its decision and the second ground of appeal therefore fails.

	It follows from this that this appeal will have to be dismissed.