Kuehne & Nagel Drinks Logistics Ltd v Deadkin & Ors

Where an employment agreement defines payable working time by reference to planned hours and provides that specified breaks are included within those planned hours, the contractual calculation governs. The employer’s treatment of break time as unpaid does not itself constitute an unauthorised deduction from wages under section 13 of the Employment Rights Act 1996. The question is what hours the contract treats as worked and payable, rather than whether the employee was physically present or actually working throughout the planned period.

Drivers employed by Kuehne & Nagel were subject to the Supply Chain North 2 agreement. It provided for unpaid breaks according to the planned length of each shift and stated that break time was to be taken into account and deducted when calculating actual hours worked.

The Employment Tribunal held that pay should instead be calculated by reference to actual working time, excluding breaks, and found unlawful deductions from wages. The employer appealed, contending that the agreement defined the hours for which payment was due and that section 13 was not engaged.

1. Appeal allowed. The Employment Tribunal had misconstrued the agreement.
2. The agreement distinguished between planned shift duration and payable working time. Breaks were built into the planned shift and were not working time. The planned hours therefore determined the hours payable, irrespective of whether the break was in fact taken.
3. The provision requiring break time to be taken into account and deducted in calculating actual hours worked did not mean that the break was to be added only after the six-hour or nine-hour threshold had elapsed. The literal meaning of the agreement was to be followed.
4. The agreement governed how hours worked were to be calculated. It did not promise payment for all hours physically worked regardless of breaks. The employees were entitled to payment only for the hours which the agreement treated as worked.
5. There was consequently no deduction from wages. Section 13 of the Employment Rights Act 1996 was not triggered, because the alleged shortfall resulted from the contractual definition of payable hours rather than an unauthorised deduction.
6. The apparent anomalies in payment around the six-hour and nine-hour thresholds did not justify departing from the contractual wording. The appeal was allowed.

• Employment Appeal Tribunal: allowed the employer’s appeal from the Employment Tribunal’s decision sent to the parties on 29 October 2010.
• Employment Tribunal, Liverpool: held that the employees had suffered unlawful deductions from wages by calculating breaks by reference to attended or actual working time.