Ministry of Defence & Anor v Carr & Ors

An employee’s agreement to a stated salary does not, without more, amount to consent to an unauthorised deduction that was unknown to the employee. Contractual entitlement must be determined by construing the applicable terms. An incorporated pay manual may confer binding contractual rights.

Where a transfer provision permits allowances consolidated into basic pay to be deconsolidated, there must be an actual subsisting allowance in the employee’s pay. A general increase to pay maxima does not necessarily establish consolidation. Conversely, genuine consolidation into departmental pay scales may be removed and replaced by the receiving department’s equivalent allowance.

In the relevant Civil Service usage, staff are “posted to London” only when moving from a non-London post. Employees already working in London do not qualify for the London Recruitment and Retention Allowance merely because they transfer to another London department.

The claimants were Government lawyers who moved from other Government departments to the Ministry of Defence. One transferred permanently; two transferred on loan while remaining employees of their home departments.

They brought claims under section 13 of the Employment Rights Act 1996 concerning London Weighting and the Recruitment and Retention Allowance. Two claimants also alleged breaches of sections 1 to 4 of that Act because their written particulars did not adequately state their remuneration arrangements.

The Employment Tribunal upheld the London Weighting claim of one claimant, upheld the RRA claims of all three, and awarded compensation concerning written particulars. The central issues were the construction and contractual effect of the Ministry’s pay manual, and the scope of the statutory particulars duty.

1. London Weighting. The Tribunal correctly approached the issue by identifying the true contractual entitlement. Signing a letter stating a salary did not amount to consent to deductions of which the loan claimants were unaware. Nor could the Ministry rely on an express salary agreement if the underlying calculation was legally wrong.
2. Paragraph 10.1 of the Non-Industrial Pay Manual conferred a contractual entitlement to London Weighting. It was drafted in terms of eligibility and was the relevant provision governing the allowance. The loan agreements expressly subjected the loan claimants to Ministry terms and conditions, so the provision applied to them.
3. Paragraph 3.13 required an actual allowance to have been subsumed within the individual’s basic pay before it could be deconsolidated and replaced. Treasury Solicitors had genuinely consolidated London Weighting into its pay scales, so the deductions affecting Carr and Shepherd were lawful. The Inland Revenue material showed no equivalent consolidation in Ferguson’s case. His assumed £1,750 deduction was therefore unlawful. The Ministry’s appeal failed on that issue and Carr and Shepherd’s cross-appeal was dismissed.
4. Recruitment and Retention Allowance. “Posted to London” meant moving from a post outside London to a London post. “Newly posted” concerned both the newness of the posting and the location. The claimants were already working in London before moving to the Ministry, so none qualified for the 4 per cent RRA. The Ministry’s appeal was allowed on this issue.
5. Written particulars. Section 1(4)(a) of the Employment Rights Act 1996 is disjunctive: particulars of the scale, rate, or method of calculation may suffice. Carr’s stated remuneration was correct once the RRA and London Weighting issues were resolved, so her particulars claim failed. Ferguson’s stated rate was incorrect because of the unlawful London Weighting deduction. The Ministry’s revised jurisdictional argument, raised only after judgment was reserved, required amendment of the notice of appeal and further submissions. Its appeal on that issue was adjourned.

• Employment Tribunal: upheld Ferguson’s London Weighting claim, upheld all three RRA claims, and awarded Carr and Ferguson two weeks’ pay for deficient particulars.
• Employment Appeal Tribunal: upheld the London Weighting result for Carr and Shepherd, dismissed their cross-appeal, upheld Ferguson’s London Weighting claim, allowed the Ministry’s appeal on RRA, allowed the appeal concerning Carr’s particulars, and adjourned the appeal concerning Ferguson’s particulars.