Williams v Surrey Heath Borough Council

A contractual reference to a spinal column point does not necessarily confer a right to every later increase attached to that point. Where an employee occupies a personal grade created to protect pay after job evaluation, the contract must be construed in context. An increase introduced for posts properly evaluated at a higher grade may be withheld if it was not intended to extend pay protection and would produce an increase unrelated to the value of the employee’s post. An anomalous or personal grade does not determine the contractual entitlement. The central question is what the contract, including the original pay-protection terms, requires.

The appellant had worked for the local authority since 1968. Following a 1999 job evaluation, her post was assessed as grade SH8, but she received a personal grade using grade 9 spinal column points to preserve her existing pay. She progressed to SCP 9.38.

In 2004, the authority increased the salary attached to SCP 9.38 for posts properly evaluated as grade 9. The appellant had retired by redundancy in 2005, and her redundancy and pension benefits were calculated using the lower salary. After proceedings in the Guildford County Court, the central issue on appeal was whether her contract entitled her to every salary increase attached to SCP 9.38.

The appeal was dismissed unanimously. Lord Justice Elias gave the judgment, with Lord Justice David Richards and Lord Justice Longmore agreeing.

1. The contractual arrangement created two categories of employees who could be paid by reference to SCP 9.38. One category comprised employees whose posts were properly evaluated as grade 9 posts. The other comprised employees placed on personal grades for pay-protection purposes after their posts had been evaluated at a lower grade.
2. The appellant belonged to the second category. The 1999 letter made clear that her post was evaluated as grade SH8 and that the grade 9 points were used only to ensure that her maximum basic salary was no less favourable than under the former arrangements.
3. The 2004 restructuring increased the salary for SCP 9.38 as part of the new pay structure for employees whose posts were properly characterised as grade 9 posts. It did not extend that increase to employees on personal grades created for pay protection.
4. The appellant therefore had no contractual right to the increase. Applying it would have produced an unjustified increase unrelated to the value of her post and would have exceeded the pay protection promised by the contract. The fact that the arrangement left her in an anomalous grade was irrelevant; the question was what the contract required.

The alternative arguments concerning limitation and laches did not arise for decision.

• Court of Appeal (Civil Division): [2017] EWCA Civ 23. Appeal dismissed.
• Guildford County Court: The decision of Mr Recorder Andrew Lydiard QC was appealed on the contractual entitlement to the revised SCP 9.38 salary and its effect on redundancy and pension calculations.