Coors Brewers Ltd v SP Adcock & Ors

The Court of Appeal allowed the employer's appeal on jurisdictional grounds and set aside the Employment Appeal Tribunal's order remitting the claims to a fresh Employment Tribunal. The panel held that the representative claimants' complaints did not amount to unlawful deductions of wages within Part II of the Employment Rights Act 1996 because any loss arising from the employer's failure to operate a replacement for the Bass Employee Profit Share Scheme was an unquantified claim for damages for breach of contract rather than a claim to a specific sum payable on a pay day under section 13 and section 27 of the Employment Rights Act 1996. The Tribunal's reasons were also found deficient (not Meek-compliant), but the Court decided the core jurisdictional point itself and concluded the remedy, if any, must be sought in the county court.

Background and parties: The claimants were four named employees, representative of over 500 employees, who alleged that Coors Brewers Limited had unlawfully deducted the equivalent of around 4% of gross pay for the year 2003 by failing to make payments said to substitute the former Bass Employee Profit Share Scheme (BEPSS). The BEPSS historically gave allocations approximating 4–5% of annual wages. Following corporate transfers (Bass to Interbrew, later to Coors) the employer made various announcements and one-off payments, introduced a Coors Brewers Incentive Scheme (CBIS) for 2003 and ultimately made no payment under CBIS 2003.

Procedural posture: An Employment Tribunal upheld the claims and declared an unlawful deduction of 4%. The Employment Appeal Tribunal allowed Coors' appeal on the ground that the Tribunal's reasons were deficient and remitted the claims to a differently constituted Employment Tribunal, while granting Coors permission to appeal the remission to the Court of Appeal. The Court of Appeal heard the appeal on jurisdiction and, alternatively, on merits.

Nature of the claim and issues: The claimants advanced that Coors had a legal entitlement to a bonus payment for 2003 by (a) an express term or representation (company announcement and letters), (b) an implied contractual term under principles in Clark v Nomura, or (c) a term implied by custom and practice (Quinn v Calder). The central issues were (i) whether the claims were properly brought under Part II of the Employment Rights Act 1996 as unlawful deductions of wages, and therefore within the Tribunal's jurisdiction, and (ii) on the merits whether any such entitlement was sufficiently ascertainable so as to be payable as wages.

Court's reasoning: The Court analysed the statutory scheme (notably section 13 and section 27 of the Employment Rights Act 1996 and article 3(c) of the Employment Tribunals Extension of Jurisdiction Order 1994) and authority such as Delaney v Staples. It concluded that Part II is aimed at quantifiable claims for sums properly payable as wages on a pay day. Where the claimed loss is an unquantified award of damages for breach of contract (for example loss of a chance that a different incentive scheme would have produced a payment), it falls outside Part II and the Tribunal lacks jurisdiction. The Court found that, on any view of the evidence and the submissions, the claimants required the Tribunal to quantify an unascertained loss; it could not be treated as an identifiable deduction of wages under section 13/section 27. The Court therefore allowed the employer's appeal on jurisdiction and set aside the EAT's remission. It declined to determine the substantive contractual issues and left open county court proceedings for damages if pursued.

Appeal allowed. The Court held that the Employment Tribunal lacked jurisdiction under Part II of the Employment Rights Act 1996 because the employees' complaint sounded in unquantified damages for breach of contract rather than in identifiable unlawful deductions of wages under section 13 and section 27. The EAT was wrong to remit the claims; the Tribunal's decision (and its defective reasons) could not subsist, and any remedy must be sought in the county court.

Employment Tribunal (Leicester) upheld claims and declared an unlawful deduction (reasons dated 3 June 2005). Employment Appeal Tribunal allowed Coors' appeal, set aside the Tribunal's decision and remitted the claims to a fresh Employment Tribunal (reserved judgment 30 March 2006) and granted permission to appeal to the Court of Appeal. Court of Appeal ([2007] EWCA Civ 19) allowed the employer's appeal on jurisdiction and set aside the EAT's remission.