Scott & Anor v Epsilon Test Services Ltd

An Employment Appeal Tribunal may interfere with an Employment Tribunal’s decision only for an error of law. A perversity challenge faces a high hurdle and succeeds only where the decision is unsupported by evidence, reflects a material misunderstanding of the evidence, or is one that no reasonable tribunal could have reached on a proper appreciation of the evidence and law. A permissible factual finding about the construction and operation of a contractual bonus scheme will not be disturbed merely because the appellate tribunal might have preferred another interpretation.

Two electrical engineers appealed against an Employment Tribunal decision dismissing their claims for unlawful deductions from wages. Their contracts provided for bonus payments for tests exceeding a specified weekly threshold. Following a temporary reduction from a five-day to a four-day working week, the claimants argued that the bonus threshold operated daily rather than weekly.

The Employment Judge found that the contractual scheme was calculated weekly, relying on the written terms, subsequent correspondence and timesheets. The appeal challenged that finding as unsupported by the evidence and therefore perverse.

1. Appeal dismissed. The Employment Tribunal had made a permissible finding that the bonus system operated on a weekly rather than daily basis.
2. The EAT’s jurisdiction under Employment Tribunals Act 1996, section 21, is confined to errors of law. It cannot re-try factual issues or substitute its own assessment where the tribunal’s conclusion is reasonably open on the evidence.
3. The applicable threshold for perversity was that identified in Yeboah v Crofton [2002] IRLR 634: the appeal should succeed only where an overwhelming case shows that no reasonable tribunal, properly appreciating the evidence and law, could have reached the decision. Grave doubts are insufficient.
4. There was evidence supporting the weekly construction. The written contract referred to tests exceeding 550, later 600, per week. The correspondence concerning the shorter working week indicated that the number of tests required per week would remain unchanged. The timesheets were also capable of supporting the Employment Judge’s conclusion.
5. The contractual documents, although headed “Terms and Conditions of Employment”, were properly capable of constituting written contracts of service, applying Gascol Conversions v Mercer [1974] ICR 420. No error of law was established.

• Employment Tribunal: Employment Judge Goodrich dismissed the unlawful-deduction claims, finding that the bonus system was calculated weekly. Reasons were promulgated on 4 February 2010.
• Employment Appeal Tribunal: The appeal proceeded to a full hearing following a preliminary hearing before His Honour Judge McMullen QC. The EAT, sitting alone, dismissed the appeal.