THE INDUSTRIAL TRIBUNALS

CASE REF:	374/06

CLAIMANT:			Brian Cleland				

RESPONDENT:		Intertrade Ireland					

DECISION 

The decision of the tribunal is that the full pay award for 2004 was not necessarily an entitlement and therefore properly payable to the claimant and even if that were the case, is not an amount to be treated as a deduction made by the respondent from the claimant’s wages within the meaning of Article 45(3) of the Employment Rights (Northern Ireland) Order 1996.  The claim to the Tribunal is therefore dismissed.

Constitution of Tribunal:

Chairman:			Mr S A Crothers (Chairman sitting alone)	

	

Appearances:

The claimant was represented by Mr B. Mulqueen, Barrister-at-Law, instructed by Luke Curran & Co., Solicitors. 

The respondent was represented by Mr M. Robinson, Barrister-at-Law, instructed by Rosemary Connolly, Solicitors.	

1.	The issue before the Tribunal, as agreed by the parties, was whether the full pay award for 2004 was properly payable to the claimant in accordance with Article 45(3) of the Employment Rights (Northern Ireland) Order 1996 (“the Order”) in light of clause 3.3 of the respondent’s staff Handbook and any other relevant documentation presented to the Tribunal.

2.	The Tribunal was assisted by documentary evidence contained in an agreed bundle of documents and by written and oral submissions submitted by both parties’ representatives and statements of facts submitted on behalf of the respective parties.  There was no oral evidence given to the Tribunal.

3.	The Tribunal, having analysed the evidence before it makes the following findings of fact:-

(i)	The claimant, who is not a member of the Northern Ireland Civil Service, commenced employment with the respondent on 31 December 2003.  He presented a claim to the Tribunal on 16 March 2006 which claimed breach of contract and ongoing breaches of contract at paragraphs 11 and 12 thereof in respect of a performance award he alleged was due to him.  It was common case that the claimant benefited from a revalorisation (revision of scale pay points) effective from 1 April 2004 which the respondent claimed was his pay award under the annual pay award for 2003.

(ii)	Paragraph 15 of the  claimant’s contract of employment states as follows:-

	“Intertrade Ireland has a staff Handbook.  This principal statement should be read in conjunction with the staff Handbook.  The contents of the Handbook may be subject to change from time to time, for a variety of reasons ranging from legislative changes to collective agreements.  Changes will take effect following consultation either directly with staff or with a recognised trade union.  Staff will be notified of all changes by circulars or personal communications as appropriate.  It is recognised that these terms and conditions do not detract from either party’s legal entitlement.  In the event of matters not covered in the Handbook, further guidance will be sought by analogy to the NICS terms and conditions”.  

	This clause has three elements as follows:-

1.	The employment contract should be read in conjunction with the staff Handbook.

2.	The contents of the Handbook may be subject to change from time-to-time for a variety of reasons ranging from legislative changes to collective agreements.  Changes will take effect following consultation either directly with staff or with a recognised trade union.  Staff will be notified of all changes by circulars or personal communications as appropriate. 

3.	Events not covered by the Handbook would be the subject of further guidance by analogy to the NICS terms and conditions.

(iii)	The Northern Ireland Civil Service (NICS) through the Department of Finance and Personnel was the sponsoring body for the respondent.  

(iv)	The staff Handbook referred to in the claimant’s contract states, inter alia, at paragraph 3.3 that “Annual pay awards follow the performance appraisal cycle from 1 April to 31 March each year.  Staff whose performance during the period has been deemed to be satisfactory or better will be rewarded under the annual pay awards.  Staff must be in post at 31 December of the appraisal year to be eligible to receive a pay award.

	Pay progression within the Body closely follows that of other public sector bodies specifically the Northern Ireland Civil Service and the Irish Civil Service.  Each year the body must make a proposal to the sponsoring and finance departments for the uplift to be awarded for the period in review.  This proposal reflects that received in other public sector bodies and typically consists of a revision to pay scales and an incremental increase to reflect standard of living increases and a performance award.  As per other public sector bodies on the island, the Body does not have a Performance Related Pay system”.

	The pay award appraisal year is from 1 April of one year to 31 March of the following year.  Having considered the pay award for the appraisal year 2003 - 2004, the respondent informed the claimant that he was not entitled to the performance aspect of the pay award but was entitled to the revalorisation of the pay point he was currently on.  It was common case that the claimant had been deemed to be satisfactory and that the date of 31 December was not changed in the Handbook until 2005.  It was common case that there were no variations of the claimant’s contract prior to the presentation of his claim to the Tribunal on 16 March 2006.

4.	The law in relation to the above issue is contained in Part IV of the Order.  Article 45(3) reads as follows:-

	“Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion”.  

	The Tribunal also considered the cases of Greg May (C F & C) Ltd -v- Dring [1990] IRLR 19 and the subsequent cases of Delaney -v- Staples (T/A D E Montfort Recruitment) [1990] IRLR 86 (EAT);  [1991] IRLR 112 (CA);  [1992] IRLR 191 (HL), Coors Brewers Ltd -v- S P Adcock & Others [2007] EWCA Civ. 19, and Harvey on Industrial Relations and Employment Law at B249FF.

5.	Taking into account Counsel’s submissions on behalf of both parties (both written and oral) the relevant statutory provisions and the case law referred to above, together with the findings of fact relevant to the issue, the Tribunal concludes as follows:-

(i)	A plain reading of paragraph 15 of the claimant’s contract of employment indicates that the respondent’s staff Handbook was incorporated by reference into that contract.  Secondly, the fact that the contents of the Handbook could be subject to change following consultation either directly with staff or with a recognised trade union and that staff would be notified of all changes by circular or personal communications as appropriate, indicates strongly that any such changes would be incorporated by reference in the 
claimant’s contract and that the claimant would be aware of any such changes.  This interpretation is confirmed by the fact that paragraph 13.1 of the contract of employment states “Intertrade Ireland may at any time give you four weeks written notice of any proposed variation to any of your terms of employment.  Unless you notify Intertrade Ireland to the contrary in writing before the expiry of the four week period you will be deemed to have accepted the change and the contract will be varied accordingly”.

	Paragraph 13.2 then deals with minor changes and the procedure to be followed.  The third element in paragraph 15 of the contract of employment refers to the NICS terms and conditions but only in terms of “guidance” and “analogy”.  The Tribunal concludes that any such guidance sought by analogy did not form part of the incorporated provisions in the respondent’s Handbook as otherwise these changes would have been dealt with in accordance with the second element of paragraph 15 and paragraph 13 referred to above.  

(ii)	Turning to clause 3.3 of the Handbook, the Tribunal concludes that the claimant is entitled to rely upon same as part of his contract.  He was in post at 31 December 2003 and was therefore eligible to receive a pay award, one element of which is a performance award.  He was deemed to be satisfactory and therefore, in accordance with the wording of clause 3.3 “will be rewarded under the annual pay awards”.

(iii)	The Tribunal took into account the provision in the Handbook (supra) which states, inter alia, that the uplift to be awarded for the period in review “typically consists of a revision to pay scales and an incremental increase to reflect standard of living increases and a performance award”.  Although the Tribunal concludes that the claimant was eligible for a performance award and that this would come within the definition of wages as being an emolument, it is not satisfied on the evidence and in light of the case law, (to include the recent case of Coors Ltd -v- Adcock & Others referred to above), that such a performance award was necessarily an entitlement and therefore properly payable, and even if that were the case, that it constitutes a specific sum of money or an identifiable sum in order for the Tribunal to conclude that the respondent had made a deduction within the meaning of Article 45(3) of the Order.  The Tribunal has no jurisdiction to deal with the issue as a breach of contract claim in light of the fact that the claimant is still in the respondent’s employment.  The claimant approached his complaint initially on the basis of breach of contract and the Tribunal concludes that if he has any such claim, it has to be dealt with in another jurisdiction, and dismisses his claim to the Tribunal accordingly.          	 

	
Chairman:

Date and place of hearing:	8 February 2007 and
28 March 2007, Belfast.		

Date decision recorded in register and issued to parties: