Employment law

Minimum wage

British Nursing Association v Inland Revenue (National Minimum Wage Compliance Team) [2002] IRLR 480

The employers are a national organisation providing 'bank nurses' on an emergency basis.

Part of that work involved a telephone booking service provided 24 hours a day.

During the day, the booking service was operated by employees working at the employer's premises, but during the night the work was transferred to employers working from home.

The booking process involved the 'duty nurse' answering a diverted telephone call and then responding to the request for staff by identifying and contacting the person to do the work.

The employees were paid an amount per shift.

The Inland Revenue's compliance team took the view that those employed on the night shift were entitled to be paid the minimum hourly rate for all the hours they were on duty.

The employers disputed this on the basis that the employers were not actually working throughout the shift.

Although they had to be available to deal with telephone calls, they could spend part of the shift doing other activities, such as reading or watching television.

The Court of Appeal confirmed that the employees operating the service from home during the night hours were 'working' throughout their shifts within the meaning of the National Minimum Wage Regulations, even though they were not actually answering telephone calls for the whole of that time.

The fact that the work was being carried out at the individual's own home was irrelevant.

Collective agreements

Henry and others v London General Transport Services Ltd [2002] IRLR 472

This ruling of the Court of Appeal casts helpful light on the important issue of the impact that collective bargaining may have on the terms of individual contracts of employment.

The Court of Appeal ruled that a tribunal was wrong to hold that the tradition of collective negotiation between the employers and the recognised trade union was not sufficient to establish a custom and practice that fundamental changes (such as those set out in a 'framework' agreement) were incorporated into individual contracts by virtue of the collective bargaining.

To establish a custom and practice, clear evidence of practice is required and there should be a scrutiny commensurate with the particular circumstances.

But the tribunal was wrong to demand 'strict proof' - the burden of proof is on the balance of probabilities, whereas the word 'strict' suggests a higher standard.

The Court of Appeal added that, if a custom and practice is established that changes are incorporated into individual contracts by collective bargaining, it can be expected to cover all contractual terms.

The tribunal was wrong to introduce a distinction between fundamental changes to a contract and other changes, without explaining the basis for that distinction.

Finally, the tribunal was also wrong to hold that the employees had not affirmed the changes to their contracts by working under new terms for almost two years after making an initial protest.

The test for affirmation is that set out in WE Cox Toner (International) Ltd v Crook [1981] IRLR 443 - provided the employee makes clear his objection to what is being done, he is not affirming the contract by continuing to work and draw pay for a limited period.

But if he performs acts which are only consistent with the continued existence of the contract, such acts will normally show affirmation.

Harris v Richard Lawson Autologistics Ltd [2002] IRLR 476

The Court of Appeal upheld a judge's decision that a shop steward had 'ostensible authority' to negotiate an agreement on holiday pay on behalf of members of his union working for the employers.

This was the case, even though on the assumed facts, the agreement was not put to the individual members for their approval, and the agreement was concluded without reference to the union's district officer, in contravention of a standing instruction to this effect.

The ostensible authority of the shop steward, and its limitations, is a question of mixed fact and law to be resolved according to the facts of each individual case.

Mere membership of a trade union does not automatically vest the shop steward with unlimited ostensible authority to alter his members' employment contracts.

But in this case, the evidence supported a finding of ostensible authority.

Trust and confidence

Transco plc (formerly BG plc) v O'Brien [2002] IRLR 444

The Court of Appeal rejected an employer's submission that the implied term of trust and confidence applies only to enforce and regulate existing contractual terms and cannot go so far as to allow the creation of new rights and positive obligations which do not exist under the contract in question.

There may be a breach of the implied term of trust and confidence in a decision to refuse to offer an employee a new contract, just as in a decision to offer a variation.

Whether the form of the change proposed by the employer is by way of variation or by way of a new contract is not especially important.

It is the context and the substance of the matter that is relevant.

So, where an employer decided to offer the workforce a new contract on better terms, it was a breach of the implied term of trust and confidence to single out an employee on capricious grounds and to refuse to offer him the same terms as were being offered to the rest of the workforce.

The fact that the employers, on the facts of this case, acted in good faith, did not legitimise the breach of duty.

It is worth noting that Lord Justice Pill pointed out that 'there are dangers in using terminology which may extend, or may appear to extend, the scope of the implied term of trust and confidence,' as explained in Malik v BCCI SA [1997] IRLR 462.

Eastwood v Magnox Electric plc [2002] IRLR 447

The Court of Appeal upheld a judge's decision that common law claims for damages for psychiatric injury based on the employer's alleged breach of the implied term of trust and confidence were precluded by the decision of the House of Lords in Johnson v Unisys Ltd [2001] IRLR 279.

The claimants argued that Johnson does not preclude a claim for breach of the implied term where the facts and matters relied on, and the conduct complained of, pre-date the dismissal, but that submission was rejected.

The majority in Johnson plainly held that unfairness in the manner of dismissal does not give rise to a common law action, whether in contract or tort, but must be the subject of employment tribunal proceedings.

The implied term of trust and confidence cannot be used in connection with the way the employer/employee relationship is terminated.

There may be cases where the particular manner in which an employee is dismissed or the circumstances attending the dismissal is, or are, confined to events occurring at the same time or immediately before the dismissal.

In other cases, that manner and those circumstances may include a pattern of events stretching back of a period.

In this case, the claimants were actually dismissed and it was accepted that the dismissals were part of the unfair circumstances.

The claimants applied to a tribunal and one of the claims went to a full hearing at which the tribunal considered all the matters relied on in the civil proceedings.

The compensation recoverable in the tribunal covered the substance of what was sought to be recovered in the county court proceedings.

Thus, claims in the county court proceedings were not sustainable.

The tenor of this decision is criticised by the editor of the Industrial Relations Law Reports, who points out that a different approach was adopted by the Scottish equivalent of the High Court in King v University Court of the University of St Andrews [2002] IRLR 252.

By Martin Edwards, Mace & Jones, Liverpool