Royal Mail Group Ltd v Aldous

An employer’s clear written contractual term may be disapplied where, before agreement, it gives an employee an express oral assurance inconsistent with that term, represents that it knows the contractual position, and the employee is entitled to rely on the assurance. A representation about the effect of the contract may be actionable even though the manager did not know whether it was correct.

Post-contract conduct may be used to the limited extent that it assists in determining what the parties agreed when the contract was varied.

The claimant agreed to reduce his contractual hours under a buy-down arrangement. The written agreement stated that pay-protection measures would cease, but his manager had orally assured him that he would not lose the relevant protected payment. The employer continued paying it for about eight months before disputing entitlement.

An Employment Judge at Bury St Edmunds held that the oral assurance disapplied the contrary written term and awarded £670.80 for unauthorised deductions under section 23 of the Employment Rights Act 1996. Royal Mail appealed. The central issue was whether the manager’s statement could disarm the unambiguous contractual wording.

1. Appeal dismissed. The Employment Judge made no error in holding that the claimant had not agreed to surrender his entitlement to the protected payment.

2. Applying MCI Worldcom International Inc v Primus Telecommunications Inc [2004] EWCA Civ 957, the employer, through its manager, represented that it knew the effect of the proposed contractual variation and that the claimant would retain pay protection. The representation was incorrect: the formal written position was that protection would cease.

3. The manager did not know whether the protected payment would be lost. Nevertheless, given the relative bargaining positions and the circumstances in which the standard-form agreement was presented, the claimant was entitled to rely on the express oral assurance. It was a misrepresentation as to the effect of the contract and was sufficient to disapply the inconsistent written term.

4. The Employment Judge was also entitled to make limited use of subsequent conduct. Continued payment and the employer’s later handling of the grievance supported the conclusion that the claimant had not been correctly informed of what he was giving up when he signed.

• Employment Appeal Tribunal: Royal Mail’s appeal was dismissed.
• Employment Tribunal, Bury St Edmunds: Employment Judge Skinner held the unauthorised-deduction claim well founded and awarded £670.80 under section 23 of the Employment Rights Act 1996.