Driver v Air India Ltd.

The Court of Appeal allowed the employee's appeal against the trial judge's dismissal of claims for unpaid overtime, shift allowance, conveyance allowance and telephone expenses. The court held that the first written contract (effective 1 December 1999) contemplated payment for overtime and shift work under clauses 10 and 11 and that, in the absence of the alleged notices or circulars, a contractual right to payment where overtime was "required" arose and would attract a reasonable sum. The chairman and managing director's decision (dated 28 December 2005) endorsing the employee's claims was a confirmatory variation which operated retrospectively and did not introduce a disabling condition precedent that certification in advance was required. The local airport manager's retrospective certification of monthly overtime statements was treated as valid evidence; the judge's adverse findings of fraudulent intent and of lying were held to be unsafely reached and should not defeat the claims. The court allowed entitlement to overtime and shift payments, and awarded conveyance and telephone allowances in accordance with the chairman's decision and available evidence.

Background and parties. Mr Minoo Driver was employed by Air India from 1972 until early 2007. Following transfer to London he continued to perform managerial catering duties and claimed unpaid sums for ad hoc overtime, shift allowance, conveyance (car) allowance and telephone expenses. He relied principally on his first contract (effective 1 December 1999), a later short second contract (1 July 2006), long-standing payments up to 2001/2002, and a decision of Air India's chairman dated 28 December 2005 which endorsed payment of applicable overtime, shift allowance and allowances for conveyance and communication.

Procedural posture and relief sought. This was an appeal to the Court of Appeal from the High Court (Queen's Bench Division, His Honour Judge Seymour). At first instance the judge found that the first contract did not create enforceable rights to overtime or shift pay, made adverse findings about the employee's credibility (including that he had fraudulent intent) and dismissed the claims. The Court of Appeal heard the appellant's appeal and further written submissions. Relief sought was payment of unpaid overtime, shift payments, conveyance allowance and telephone costs; alternatively damages for breach of the implied term of mutual trust and confidence.

Issues identified by the court. The court set out the core issues: (i) whether the first contract gave an entitlement to overtime payment; (ii) whether any condition precedent (for example pre-authorisation or timely presentation) existed; (iii) whether entitlement was in the employer's discretion; (iv) whether the chairman's decision created or confirmed rights and whether that was retrospective; (v) the effect of certification by the airport manager and the consequences of any withdrawal of that certification; (vi) the relevance of the judge's findings of fraudulent intent; and (vii) analogous questions for shift, conveyance and telephone allowances and for the second contract.

Reasoning and disposition.

• The court concluded that clauses 10 and 11 of the first contract contemplated payment for overtime and shift work where overtime was "required" and that the absence of separately issued notices or circulars did not negate a contractual right to be paid a reasonable sum.
• No formal condition precedent (such as pre-authorisation) was to be implied from the contract or from contemporaneous managerial correspondence; certification by the airport manager was an evidential safeguard and method of regulation rather than a contractual nullifier of entitlement.
• The chairman's decision of 28 December 2005 was confirmatory and intended to address past unpaid entitlements; it therefore operated retrospectively and supported the employee's claim.
• The trial judge's adverse credibility findings, including the finding of "fraudulent intent" in relation to the retrospective certification, were unsafe: the evidence showed contemporaneous practices, managerial acceptance of the employee's role and overtime requirements, and, at worst, retrospective administrative regularisation rather than dishonesty.
• Accordingly the Court of Appeal allowed the appeal; the court accepted entitlement to overtime payments under the first contract, to shift allowance for the first contract period, to a conveyance allowance of £100 per month (for the stated period) and to a telephone allowance evidenced at £31 per month for the relevant period. Quantum was left to be agreed or determined following the judgment.

Appeal allowed. The Court of Appeal held that the first contract (clauses 10 and 11) did give a contractual right to payment for overtime and shift work when overtime was "required"; the chairman's decision of 28 December 2005 confirmed and operated retrospectively to secure outstanding entitlements; there was no contractual condition precedent that pre-authorisation or perfect compliance with administrative timetables was fatal to entitlement; the trial judge's adverse credibility findings (including that the claimant had "fraudulent intent") were not safely made and should not defeat the claim. The employee was therefore entitled in principle to unpaid overtime, shift allowance and the conveyance and telephone allowances as assessed by the court, with quantum to be agreed or determined.

On appeal from the Queen's Bench Division (High Court), His Honour Judge Seymour (trial reference HQ08X01806). The case was heard in the Court of Appeal (Civil Division) and reported at [2011] EWCA Civ 830.