• Tribunal Can Construe Contract in Wages Claim

    In Weatherilt v Cathay Pacific Airways Ltd, the EAT has held that an employment tribunal has jurisdiction to construe a contract of employment and decide on whether an implied term exists in the context of a wages claim under Part II of the Employment Rights Act 1996. In so holding, the EAT declined to follow the contradictory EAT judgment in Agarwal v Cardiff University EAT 0210/16, handed down last month. The EAT in Weatherilt considered that the EAT in Agarwal was not referred to relevant Court of Appeal authority on the point.

    W, a commercial pilot, brought a claim of unauthorised deduction from wages under Part II ERA against his employer, CPA Ltd. The claim raised the question whether his contractual sick pay should include elements reflecting two allowances, Hourly Duty Pay and Excess Flying Pay. This depended on the proper interpretation of his conditions of service. An employment tribunal dismissed his claim, finding that sick pay did not require to be so construed under the contract. On appeal, CPA Ltd sought to introduce a new argument. It relied on the earlier EAT decision in Agarwal v Cardiff University to argue that the tribunal had no jurisdiction to interpret a contract of employment or imply terms into it, and so it ought not to have heard the claim at all.

    The EAT allowed CPA Ltd to take the point but rejected the argument. It acknowledged that the EAT in Agarwal had proceeded on the basis that the tribunal has no jurisdiction in such cases but pointed out that this had been agreed between counsel and there had therefore been no adversarial argument. The EAT in the present case considered Court of Appeal case law including Delaney v Staples 1991 ICR 331, which interpreted the antecedent provisions in the Wages Act 1986, and Camden Primary Care Trust v Atchoe 2007 EWCA Civ 714. It held that those cases were binding authority and that they required the tribunal’s jurisdiction to include questions of interpretation and implication. The EAT noted that, in Delaney, Lord Justice Nicholls had held that the tribunal is required to determine a dispute ‘on whatever ground’ as to the amount of wages properly payable under what is now Part II ERA. This had to include a dispute as to the interpretation of a contract or the existence of an implied term. In the EAT’s view, it would be surprising if the tribunal could not construe a provision of the contract to see whether it authorised a deduction when this very question is central to the operation of S.13 ERA.

    As to the Court of Appeal’s decision in Southern Cross Healthcare Co Ltd v Perkins and ors (Brief 921), which the EAT in Agarwal relied on for its conclusion, the EAT in the present case considered that it could be distinguished since it dealt with the different provisions applicable to written particulars in Part I ERA. While the EAT acknowledged that there is ‘a degree of tension’ between the approach in Southern Cross and the approach in Delaney and Atchoe, this was explicable by reference to the different origins, purpose and terms of the statutory provisions.


    Thomson Reuters

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