Glasson v London Borough of Bexley

An employer’s contractual scheme may confer a discretionary power to make temporary additional payments without creating a permanent right to them. A payment properly made under such a scheme may be received as an entitlement once discretion has been exercised. That does not require the employer to continue paying it after the scheme condition has ceased.

Where restructuring places the relevant duties within a newly evaluated role, those duties are no longer additional. The contractual basis for an honorarium can therefore end. Stopping it does not constitute an unauthorised deduction if it is no longer wages properly payable. A concise tribunal judgment is adequate if it identifies the dispute, material facts, reasoning and outcome sufficiently for the parties and an appellate court to understand the decision.

The claimant was employed by the respondent council at pay grade B9. From 2007 she received monthly payments described as an honorarium while undertaking additional responsibilities. Following a 2011 restructuring, she was assimilated into a newly evaluated B9 role with a revised job description. The council stopped the payments with effect from 31 October 2012.

The Employment Tribunal at Ashford dismissed claims under the Employment Rights Act 1996, holding that there was no contractual entitlement to the payment after July 2011. The claimant appealed, alleging inadequate reasons, legal error in classifying the payment as an honorarium, and perversity in the Tribunal’s findings.

1. Appeal dismissed. The Employment Tribunal’s reasons met the standard in Meek v City of Birmingham District Council, [1987] IRLR 250. Although succinct, they identified the parties’ cases, made findings on the material facts, explained the nature and basis of the payments, and showed why the claim failed. They therefore permitted informed appellate review.

2. The Tribunal was entitled to find that paragraph 35B of the council’s conditions of service formed part of the contract of employment. The provision established an honorarium scheme under which the council could make a temporary additional payment when specified conditions, including the performance of additional duties, were met.

3. The Tribunal’s use of “entitlement” for the period from April 2007 to July 2011 did not disclose legal error. Once the manager exercised the contractual discretion under the scheme, the claimant was entitled to receive the resulting legitimate payments. She nevertheless had no absolute contractual right requiring the employer to exercise that discretion in her favour. The contractual operation of a discretionary scheme did not make the payment permanent.

4. After the restructuring, the duties for which the honorarium had been paid were incorporated into the claimant’s new job description. Her new role was evaluated at the applicable B9 rate. The condition that she perform additional duties had therefore ceased, and the scheme no longer authorised the payment. The Tribunal was entitled to find that there was no contractual entitlement to it after July 2011.

5. The perversity challenge failed. Applying the stringent approach in Yeboah v Crofton, [2002] EWCA Civ 974, the findings challenged were open to the Tribunal on the evidence. One observation that the claimant should have queried the continuing payment overstated the position, but it was immaterial. Since the payment was not wages properly payable after July 2011, its cessation did not amount to an unauthorised deduction.

• Employment Appeal Tribunal: appeal dismissed. The Tribunal upheld the dismissal of the unlawful-deduction claim.
• Employment Tribunal at Ashford: on 14 January 2013, dismissed the claimant’s claims under the Employment Rights Act 1996.