Goldwater v Sellafield Ltd

On the proper construction of a contractual promotion and transfer rule, an employee entitled after six weeks to the pay and conditions of a new post is entitled to all monthly remuneration intrinsic to that post. This includes shift and contact-area supplements where the new post carries them.

The words must be construed in their contractual setting and against the relevant background. A prior practice of paying only basic pay does not establish a binding custom without evidence of the circumstances in which the practice operated. Clear contractual wording should not be restricted by implying an exclusion that the parties could readily have expressed.

The claimants were employees at Sellafield Ltd. Their contracts incorporated a collectively agreed rule providing that, on promotion or transfer, employees would receive the pay and conditions of the new post when they moved to it and, in any event, no later than six weeks after notification of selection.

The Employment Judge rejected claims for unlawful deductions from wages. He held that shift and contact-area supplements were not included in the rule. Mr Whitefield's claim concerning shift supplements remained material because its resolution would determine the construction issue for the outstanding claimants. The claimants appealed on that issue.

1. Appeal allowed in part. The Employment Judge's construction of the six-week rule was unsustainable. Shift pattern and work location were intrinsic features of Mr Whitefield's new post. The associated supplements formed part of his automatic monthly remuneration, rather than payments dependent upon shifts or locations actually worked.

2. Applying the contractual-construction principles stated in Investors Compensation Scheme v West Bromwich Building Society [1998] 1 All ER 98, the natural and ordinary meaning of the first limb of the rule was that the employee would receive all remuneration payable on taking up the new post. The second limb required the employee to receive, six weeks after selection, the same pay and conditions as would be received on moving to it. Accordingly, the expression included basic pay and, where applicable, shift and contact-area supplements.

3. The background did not justify treating the language as erroneous or as silently excluding supplements. The supplements had already been introduced as part of the pay package. The new rule deliberately added the words and conditions and omitted earlier wording more closely tied to basic pay. That construction also furthered the rule's purpose of discouraging management delay in implementing successful applications.

4. The absence of earlier payments or complaints did not establish a custom and practice capable of restricting the rule. There was no finding of such a custom and no evidence of the circumstances in which the rule had operated.

5. Mr Whitefield was entitled under Employment Rights Act 1996, section 23, to recover the shift supplements that he would have received had he moved six weeks after 13 February 2012. Paragraph 2 of the Employment Judge's judgment, containing a determination under section 11, was set aside.

• Employment Appeal Tribunal: allowed the appeal to the extent of Mr Whitefield's claim for shift supplements and set aside paragraph 2 of the Employment Judge's judgment.
• Employment Tribunal: judgment sent to the parties on 17 December 2013 dismissed the unlawful-deduction claims on the construction issue, subject to separate findings on the offer letters.