Appeal No. EAT/891/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On  1 May 1999

Before
THE HONOURABLE MR JUSTICE MORISON (P)
MR T C THOMAS CBE
MR N D WILLIS

(1)	MRS G BILSBORROW
(2)	MR A PEVELY	APPELLANTS

LIVERPOOL CITY COUNCIL	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR J CAVANAGH
(OF COUNSEL)
(Instructed by)
Messrs Reynolds Porter Chamberlain
Chichester House
278/282 High Holborn
London WC1V 7HA	
For the Respondent	MR T KENWARD
(OF COUNSEL)
(Instructed by)
Head of Legal Services
Liverpool City Council
PO Box 88
Municipal Buildings
Dale Street
Liverpool L69 2DH	

	MR JUSTICE MORISON (PRESIDENT):	This is an Appeal brought by Gail Bislborrow and Alan Pevely, the Appellants, against a decision of an Employment Tribunal Chairman sitting alone who dismissed their Application that there had been an unlawful deduction from their wages.  That Application had been brought against their Employers, the Liverpool City Council.  

1	The background to the Appeal may be shortly stated.  Each of the two Appellants is a teacher.  Each was employed as such at Queen Mary’s School prior to being redeployed to different schools: Gail Bilsborough to Gateacre Community Comprehensive School; Alan Peveley to Alsop High School.  The first-named Appellant had earned two “responsibility points” whilst at Queen Mary, which attracted additional remuneration, but after her redeployment, she did not receive that extra portion of her salary.  She was told when she moved schools that she would not receive such extra pay, but nonetheless says she is entitled to it as a result of the application to her of statutory criteria which she says applies to her case.  Her claim to the Employment Tribunal was that after her redeployment, her Employers unlawfully deducted from her wages the extra money to which she says she is entitled.  The Respondents deny that she had any such entitlement to the extra money.  In relation to the second-named Appellant, he claims that although his new post after redeployment involved a lower salary, as a result of a statutory scheme he was entitled to have a protected salary which was the same as he had before redeployment.  

2	The issue between the parties does not, as it seems to us, depend so much upon the terms of the offers of new employment but rather upon a proper interpretation of the statutory procedure.  Teachers’ pay, in general terms, is governed by the School Teachers Pay and Conditions Act 1991.  By Section 1 of that Act, the Prime Minister was required to appoint a body called “the Review Body” to report on and examine matters relating to the Statutory Conditions of Employment of School Teachers in England and Wales.  Following a reference of any matter under Section 1 to the Review Body, the Secretary of State is permitted by Section 2, after proper consultation, to make provision by Order giving effect to the recommendations of the Review Body with or without modification or making such other provision with respect to the matters referred to the Review Body as he thinks fit.

3	An order made under Section 2 is called a Pay and Conditions Order and by sub-section (4) such an Order may, in particular, as regards the statutory conditions of employment for school teachers, confer discretion on local education authorities or in the case of a grant-maintained school the governing body of the school with respect to any matter, and provide for the exercise of any such discretion in relation to a school which has a delegated budget by the governing body of the school.  By sub-section (7) of Section 2, it is provided, subject to certain exceptions which do not apply, so far as concerns his statutory conditions of employment, the Contract of Employment of a school teacher shall contain no terms other than those which have effect by virtue of a Pay and Conditions Order.  It is not necessary for present purposes in the light of a concession which was made during the course of argument, to refer to any of the other details of the complicated statutory provisions contained in the 1991 Act.  The Secretary of State made a Pay and Conditions Order, the terms of which are contained in the School Teachers Pay and Conditions document 1997.  The document, as it describes itself, contains provisions relating to the statutory conditions of school teachers in England and Wales and was prepared by the Secretary of State in anticipation of a Pay and Conditions Order being made by him under Section 2 of the 1991 Act.  When the Order came into force, it said on the face of the document that it will “from 1 September 1997 replace the 1996 document given effect to by the Education (School Teachers Pay and Conditions) (No 2) Order 1996 as amended”.

4	The two Appellant teachers took up their redeployment as from 1st September 1997 and it is common ground between the parties that it is the document to which I have referred which governs their legal rights in relation to their remuneration.  Paragraph 24 of the document, headed “General Safeguarding”, gives in general terms protection to teachers in the event of what would be called in a different environment “a redundancy-type situation”.  Where, as the result of the closure or reorganisation of an educational establishment, a teacher suffers a diminution in his remuneration and is thereafter and thereupon employed full time as a teacher by the same authority as had previously employed him, the document provides 

“He shall be deemed, for all salary purposes, to continue to hold the post he held and to be entitled to those allowances listed in para 24.1.4 to which he was entitled immediately before the closure, reorganisation or direction.”

5	It follows that where that provision applies, the teachers’ salary is protected but it is common ground in this case, that para 24.1.1 does not apply in the circumstances in which these two Appellants came to leave their employment at Queen Mary’s school.  That is because neither of the events specified in para 24.1.1 had occurred and therefore, the mandatory requirement that their pay should be protected did not apply.  Para 24.1.2 provides that where, in circumstances other than those mentioned in para 24.1.1, a teacher loses his post or would but for the provisions of the paragraph suffer a diminution in his remuneration and is thereupon employed full-time as a teacher in the provision of primary or secondary education in a post, whether or not at a school in which his remuneration is paid by the same authority as before, then he may, at the discretion of the authority, “be deemed for all salary purposes to continue to hold the post he held and to be entitled to those allowances listed in para 24.1.4 to which he was entitled immediately before the circumstances occurred and the authority ... shall not unreasonably refuse to exercise their discretion in this matter in favour of the teacher”.  It follows that where the circumstances contained in para 24.1.2 apply, as here, then the local education authority has a discretion which shall not be unreasonably exercised to ensure that the teacher is given a protected salary.  

6	The question at issue before the Employment Tribunal therefore, was whether in the circumstances, the authority had properly exercised its discretion not to protect the salaries of the two Appellants.  The local authority, that is the City of Liverpool, had entered into agreements with the recognised teaching unions on the management of staffing establishments in schools including the redeployment of teachers and the document which we have records as parties to the agreement the various relevant trade unions including that one which is supporting this Appeal.  

7	As Appendix B to that document under the heading “Protection of Salaries” para 8, makes plain, where the post offered is at a lower salary or wage the difference will be safeguarded by the authority in accordance with any Council pay protection policy which operates at that time.  It would appear from the decision of the Employment Tribunal that the Liverpool City Council had in fact passed a resolution indicating that in relation to redeployed teachers where there was a discretion, there was no money in the kitty to enable them to pay extra money, that is, to provide the protection of their earnings on redeployment.  The employees, therefore, in this case, were offered and accepted, employment by the new schools on terms which were less favourable than those they had previously enjoyed and their pay was not protected.  

8	The Employment Tribunal did not, as it seems to us, have the benefit of a clear exposition of the statutory background against which they were having to consider the matter at issue.  Furthermore, Mr Coventry, sitting alone, was deprived of the benefit of the knowledge and experience of two lay members, which would have or might have given him assistance in resolving the matters in dispute.  On one view of what the Tribunal concluded at para 10, it would appear that the fact that the parties entered into a contract on redeployment appears to have dominated the thinking of the Employment Tribunal and was or may have been largely responsible for the applicants failing in their application for unlawful deduction of wages.  Not surprisingly, in the light of paragraph Section 2(7) of the1991 Act, this was a matter of some concern to the Trade Union.   It seems to us that the real question in this case can only be decided by reference to the statutory scheme and to the specific provisions of the document to which I have referred.  In particular, as it became clear during the course of argument, has the Liverpool Council lawfully exercised its discretion by passing the resolution to which I have referred, which was of general application, to the effect that owing to shortage of funds redeployed teachers who were not entitled as of statutory right to a protection of their earnings would not have their earnings protected in a redeployment situation by the local education authority when it came to exercising its discretion.  

9	We have come to the conclusion that the Employment Tribunal has not, with respect, properly considered the real issues between the parties.  We do not wish in any way to criticise what happened.  The issues have not been refined enough for the Employment Tribunal and it does not seem to us safe to approach this case on the basis of the decision as it stands.  We were invited to pick the good bits out from the Employees’ point of view and conclude the Appeal in their favour and equally, we were invited by Mr Kenwood, to whom we would pay particular thanks for his cogent submissions to conclude that effectively, the Employment Tribunal have resolved the issue properly in the Council’s favour.

10	This matter will have to be heard and determined in the correct context by another Employment Tribunal.  The sort of issue with which they will be concerned is whether the Liverpool City Council have applied their minds to these two individual cases to decide whether their pay should be protected.  If not, whether they were legally obliged to apply their minds to them on an individual basis.  The Employment Tribunal will wish to consider the effect of the policy decision taken as to the shortage of funds and if satisfied that the local authority have not acted lawfully, will have to apply their minds as to what the consequences would be.  

11	We want to make it plain that these are difficult issues which will have to be grappled with.  We do not think it right to attempt to give any guidance at this time in relation to them.  It seems to us that the parties should simply go back before another fully constituted Employment Tribunal presided over by a different chairman, to hear and determine the case.  We would like to make it plain that nothing that we have said in this judgment should be taken to be an indication as to the result of the case when they come to re-hear it.  It is entirely a matter for them to determine on the basis of the evidence and the submissions then made to them.  But they will be required to look at the statutory framework in this case and to have before them, which we do not believe was made available on the last occasion, the relevant statutory material so that they can construe the documents against what they find to have happened in fact, with the care that this case deserves.  Therefore, we have not done full justice to the arguments presented to us because, at the end of the day, we are of the view that it would be more helpful for the Employment Tribunal to approach this matter anew without any predisposition to finding one way or the other in relation to these difficult arguments.  For the reasons that we have tried to give, therefore, we are satisfied that the matter must be remitted to be heard as we have indicated.  And that is therefore, the Order of this Court.  The Appeal will be allowed and the matter remitted back.