MacMullen v Cooke (t/a The Netherton Nursing Home)

An employee may continue working after an employer unilaterally reduces contractual wages and claim the shortfall, unless the employee has affirmed the variation. Affirmation is assessed objectively. The employee must know the facts giving rise to the breach and the legal choices available, and must do an unequivocal act showing an intention to continue under the varied contract. Mere silence, inactivity or continued work does not necessarily amount to affirmation. In an employment relationship, the court must recognise that financial pressure or practical necessity may make continued work unavoidable. The employee’s conduct may nevertheless establish affirmation where, viewed objectively, it communicates acceptance of the reduced terms.

The applicant was employed as a night sister at a nursing home. Her hourly wage was reduced from £7 to £6.30, and she continued working while receiving the lower rate. She later claimed the difference as an unlawful deduction of wages under section 13 of the Employment Rights Act 1996.

The Employment Tribunal held that she had affirmed the varied contract, relying on the passage of time, her conduct after receiving revised terms, and claims for redundancy and other payments calculated at the lower rate. The Employment Appeal Tribunal dismissed her appeal. She sought permission to appeal out of time to the Court of Appeal. The central issue was whether her conduct objectively amounted to affirmation.

1. Permission and disposition. The application was eight days out of time, but the decisive issue was the second-appeal test under CPR 52.13. There was no real prospect of success. Permission to appeal was refused and the appeal was dismissed.
2. Effect of unilateral wage reduction. A unilateral change to contractual wages will normally be a breach of contract. An employee may resign and claim constructive dismissal, refuse to work under the new terms, continue working and claim the contractual difference, or affirm the variation. The principle in Rigby v Ferodo [1988] ICR 29 did not exclude affirmation or acquiescence; it decided the case on facts where the employee had not acquiesced.
3. Affirmation. Affirmation requires knowledge of the facts constituting the breach and knowledge of the legal right to choose between treating the contract as continuing or accepting the repudiation. It may be express or implied, but the conduct must be unequivocal and objectively communicate an intention to continue regardless of the breach. Mere inactivity, silence or continued work is insufficient by itself.
4. Employment context. The court must take account of the employee’s potentially weak bargaining position, financial circumstances and possible lack of access to legal advice. Those considerations do not prevent affirmation where the employee’s overall conduct objectively indicates acceptance.
5. The tribunals were entitled to rely on the lengthy period without further written protest, continued attendance at work, and claims calculated on the reduced wage. The applicant’s additional factual allegations could not properly be raised for the first time on this appeal.

• Court of Appeal (Civil Division): Permission to appeal was refused and the appeal was dismissed.
• Employment Appeal Tribunal: The appeal from the Employment Tribunal was dismissed because there was evidence supporting the finding that the applicant had affirmed the varied wage terms.
• Employment Tribunal: The unlawful-deduction claim was dismissed after finding that the applicant had affirmed the contractual variation.