Appeal No. UKEAT/0358/04/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 3 August 2004

Before
HIS HONOUR JUDGE ANSELL
MS P TATLOW
MR S YEBOAH

CHUBB SECURITY PERSONNEL LTD	APPELLANT

MR B BATES	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR B REYNOLDS
Advocate
MHI Support Plc
4 & 5 Fellgate Court
Froghall Street
Newcastle Under Lyme
Staffordshire
ST5 2UA
	
For the Respondent	RESPONDENT NOT PRESENT OR REPRESENTED	

SUMMARY

Claim for overtime arising out of change of payment provisions - Adverse weekly hours – Paid per hour – Entitlement to overtime over basic hours worked.

HIS HONOUR JUDGE ANSELL 

1.	This is an appeal from a decision of an Employment Tribunal who sat at Truro on 29 January 2004 when a decision promulgated on 25 February held by a majority the Chairman dissenting that the then Applicant Mr Bates who does not appear today was entitled to the payment of overtime to periods worked in excess of 41 hours per week and that this was a continuing unlawful deduction of wages.

2.	Mr Bates was employed formerly by Baltic Pine Timber Corporation Ltd as a security guard.  He worked a shift system whereby in a 3 week period he worked 18 hours, 45 hours and 60 hours in the respective 3 weeks.  That would produce an average of 41 hours per week and he was indeed paid based on a 41 hour week.  His contract of employment with Baltic set out in our bundle provided for an annual salary of £9,620.00 payable weekly in arrears and as regards hours of work it referred to:
6	HOURS OF WORK
Your normal working shifts from 5.30 pm to 8.30 am daily and additionally 8.30 am to 5.30 pm on weekends and bank holidays.
You may be expected to work overtime from time as the workload requires, and you will be paid for such overtime according to the rates shown below
7	OVERTIME
All overtime must be authorised by management in advance.  The basic rate of pay will be calculated on the assumption of a 41 hour working week.
Where applicable, any ‘overtime’ hours worked will be paid at 1½ your basic rate of pay.”

3.	The business was transferred in that Mr Bates was employed subsequently by Chubb Security Personnel.  It is agreed that the Transfer of Undertaking Regulations applied but in fact not all the terms were adhered to by the new employers.  The hours worked remained at 18, 45 and 60 but rather than being paid on a notional 41 hour week he was in fact paid for the actual hours worked each week on an hourly rate basis and he was paid at the end of each month again based on the actual hours worked in that month whether it be a four or five week month.  This meant that take home pay would of course vary from month to month depending on the cycle of the 3 weeks and indeed varied on an annual basis.  It did not necessary follow that he would receive the same each year as 52 is of course not divisible by 3. 

4.	The first complaint that Mr Bates raised related to how holiday pay was paid and that was dealt with by the Tribunal in paragraph 3 of their decision.  They found that the employers had unilaterally altered that system of payment for holidays limiting payment to a maximum of 9.6 hours of plain wage for each day of holiday namely 48 hours for a whole week.  Mr Bates had in the past and continued to take holiday during that week of the shift system where he would normally work 60 hours and this meant therefore that there was a loss under the new scheme compared to the old scheme.  However, he was out of time in making a claim in respect of the holiday pay for November 2002 and that part of the claim was dismissed.

5.	The second limb of the claim which is the subject of the appeal relates to his claim that since the method of payment for work changed to an hourly rate basis therefore wages should be paid on an hourly rate basis and that since his basic contractual hours were 41 hours per week anything worked in excess of that which effectively would be weeks 2 and 3 of the cycle should be paid at time and a half.  
 
6.	This argument found favour with the lay members of the Tribunal Mrs Mash and Mr Wright who took the view that if wages were paid on hours actually worked then all hours worked over 41 hour working week should be paid at an overtime rate even though taking over a 3 week basis Mr Bates was not actually working any longer hours than he had previously.  The Chairman dissenting found that although the basis of payment for paid holiday had been unilaterally altered this did not mean that the payment basis for weekly work had been altered.  He found that under the Baltic Pine contract the hours were averaged out and paid weekly; under Chubb Security the hours were paid although the total wage for a 3 week shift period would not alter but it was paid monthly which meant that over an extended period it would have no effect on the total wages paid and indeed Mr Bates has not suggested that taking over a lengthy period these changes of arrangements actually made any difference to what he was receiving.

7.	Before us today Mr Reynolds, on behalf of Chubb Security has argued that whilst the method of payment may have altered the hours worked did not and that as we have already stated taking over a 3 week period he was not working anything more than he had done before namely 123 hours averaged out of 41 hours per week.  He submits that for overtime to be payable under the contract there has to be authorisation by management in advance and that there has been no authorised overtime in this case, no agreement to extra work hours worked because in fact taking the 3 week period no extra hours have indeed been worked.

8.	Although this is a short case we have in fact not found it an easy one to determine and we record that in fact there is a division of opinion amongst us, Mr Yeboah taking a contrary view and supporting the Chairman the rest of us supporting the Tribunal majority view.  The majority’s approach has been:  Was the view taken by the Tribunal lay members one which no reasonable person could have taken?  We cannot say that; for this reason, that it was the employers’ choice not to adhere to the TUPE arrangements and indeed the signed agreement from 3 employees that they wished the Baltic terms to continue.  The employers unilaterally made alterations both as regards the holiday pay arrangements and indeed as to the method of payment of wages because as far as these employers were concerned they effectively abandoned any pretext of a 41 hour week.  They no longer paid wages on a 41 hour average but chose to pay on the basis of hours worked and indeed even on a monthly basis rather than working out the monthly pay based on a 41 hour average week or alternatively by taking one-twelfth of the annual salary they did neither and adhered to a monthly payment of wages based entirely on the actual hours worked.

9.	Thus these employers chose to abandon what had been previously agreed namely that pay would be based on a 41 hour average and we therefore find no fault in the view of the majority members of the Tribunal that since wages were now being paid entirely on hours worked therefore overtime could be claimed for those 2 weeks out of the 3 when hours were worked in excess of the 41 hour week which was the basic working week under the original contract of employment.  Mr Yeboah dissenting takes the views of the Chairman that since effectively taking over a 3 week period the 123 hours had not altered, no overtime was being worked.

10.	The employers had also complained that the decision in this matter was taken in a hurry by the Tribunal members, spending only 10 minutes on the decision making process on the basis that they were anxious to perhaps get away from the hearing and faced long journeys home.  We have not seen any comments in documentation from the Tribunal members to deal with this complaint.  However the experienced Chairman and lay members, judging from the fact that they were not able to reach unanimity, clearly therefore had difficulty with the decision.  It appears to us on the face of the documents that they approached the matter with care and attention and indeed the split between them reflects that care and attention and we cannot find any substance in this particular aspect of the complaint.  Accordingly for these reasons we would by majority dismiss this appeal.