Driver v Air India Ltd

An employee cannot claim contractual payment for overtime, shift work or expenses unless the employment contract, a valid variation, or a separate agreement provides for it. An employee is not entitled to decide unilaterally that overtime should be worked and then charge the employer for it. A variation must identify sufficiently certain obligations and operates according to its terms. An implied term of trust and confidence cannot be used to write new payment obligations into an otherwise silent written contract. Where payment depends on an employer’s contractual discretion, the discretion may require proper consideration; a purely voluntary power to make an unearned payment creates no such obligation.

The claimant was employed by the defendant airline under two successive contracts. He claimed overtime, shift allowances, car and telephone allowances, pension contributions, bonus payments and payment for unused leave. The defendant denied contractual liability and relied on the terms of the contracts, which superseded earlier arrangements.

The claimant contended that notices, workplace arrangements and a memorandum of 28 December 2005 varied the first contract. He also relied alternatively on the implied term of trust and confidence. The central issues were whether the claimed payments were contractual, whether the memorandum created enforceable variations, and whether the claimant had performed any conditions attached to the allowances.

1. Claims under the contracts. The first contract contained no entitlement to car or telephone allowances and no operative provision fixing overtime rates or the circumstances in which overtime was payable. The second contract superseded the first contract and provided only for overtime at Air India’s discretion under guidelines which were not produced. It contained no provision for a shift allowance.
2. Overtime. The claimant was not entitled to decide himself that overtime was necessary and then charge Air India for it. Payment could arise where Air India requested or agreed to additional work, either under a separate contract or, potentially, in restitution. No such request or agreement was proved. The documents relied on did not create a contractual entitlement and the claimant had not complied with the applicable authorisation and certification arrangements.
3. Variation. The memorandum of 28 December 2005 varied the first contract only to the extent that it created future obligations to pay a £100 monthly conveyance allowance for making the claimant’s car available for work and to reimburse mobile telephone charges. It did not settle historic claims or create sufficiently certain entitlements to overtime, shift allowance or a general telephone allowance. The car allowance failed because the claimant did not prove that he had used his car for the contractual purpose.
4. Other allowances and implied terms. Previous payment of a shift allowance did not establish a continuing contractual entitlement. The implied term of trust and confidence could not be used to insert payment obligations absent from the written contracts. The distinction from Horkulak v Cantor Fitzgerald International was that there the employer had a contractual duty to consider exercising a bonus discretion; here Air India had no contractual duty even to consider making the claimed payments.
5. The claimant’s claims were dismissed. The defendant’s counterclaims, which were not pursued as such, were also dismissed.

First-instance decision of the High Court. No earlier appellate decision is stated in the judgment.