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Chambers & Partners
29/09/2021

EAT judgment concerning right to pay during suspension for zero hours and casual workers

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The EAT has handed down its judgment in Mr A Agbeze v Barnet Enfield and Haringey Mental Health NHS Trust EA-2020-000413-VP(formerly UKEAT023220VP) on 24 September 2021. HHJ Auerbach, in his judgment, provides clarity concerning unlawful deduction wages claims brought by casual and zero hours workers and confirms that there is no general implied term in worker contracts that they should be paid average ‘wages’ while suspended.

Conor Kennedy acted for the successful Respondent.

Background

The claim was for unlawful deduction of wages by a healthcare assistant who provided his services as an NHS “bank” worker. Under the express terms of his contract the Respondent was not obliged to offer him any work at any time, and he was not obliged to accept any assignment in fact offered to him. The contract also provided only for payment in respect of assignments offered to, and accepted by, him. The Claimant was accused of misconduct and had a temporary restriction placed on his ‘bank staff account’, the online platform whereby he could accept shifts as a healthcare assistant. The suspension lasted some months before being lifted. The Claimant brought a claim for unlawful deduction of wages contrary to section 13 Employment Rights Act 1996 (s13 ERA) arguing that there was an implied term that he was entitled to be paid average wages during the suspension period, so long as there was work available to do.

At first instance, before EJ Hyams, the claim failed on the basis that the implication of such a term ran contrary to the contract and did not stand to be implied at common law. EJ Hyams rejected the argument that the case of  Rice Shack Ltd v Obi, UKEAT/0240/17 was persuasive, finding that the ratio in that case did not apply to the present case since Obi had involved a concession by the employer that a zero-hours worker was entitled to average pay during suspension.

Appeal

On appeal the Claimant renewed his argument for an implied term specifically that  “there is an implied term in the contract of every worker ‘that workers are entitled to be paid during a suspension, including zero hours and casual workers, as long as work would otherwise have been available to them’ ” [10].

The Claimant relied on Obi, as persuasive authority for the proposition and asserted that the common law principles set out in North West Anglia NHS Foundation Trust v Gregg [2019] ICR 1279, should be extended to casual and zero hours workers. In essence the Claimant argued that the position regarding suspension with regular salaried employees should be extended to all workers, i.e. that in the absence of an express contractual term to the contrary that suspension be without pay, workers ought to receive average pay when suspended.

The Claimant further relied upon Uber v BV Aslam [2021] ICR 657 to argue that the statutory protection against unlawful deduction from wages should apply purposively, and thus an implied term should be read into the contract.

The Respondent maintained its argument that no wages were “properly payable” to the Claimant in this case since the Claimant was only due to be paid for work done, and there was no contractual obligation to offer any work.

HHJ Auerbach accepted the Respondents arguments that there was:

“ a real and significant difference between the position of an employee under a permanent contract of employment, where the starting point under the contract is that they have an ongoing right to be paid; and the position of a bank worker, where the starting point is that the hirer has no obligation to give them any work, and they only have a right to be paid for such work as they are given and have carried out. The contractual baseline in the two types of case is different. To conflate the position of a suspended conventional employee with that of a restricted casual worker failed to respect the fundamental nature and terms of the underlying contractual relationship”. [35]

It was held that in the present case the express terms of the contract, reading it as a whole, left no space for a term to be implied since the contract made clear that payment was only for time worked with no obligation to offer work. However, HHJ Auerbach went further and considered whether such a term ought to be implied assuming there was room for such an implication. He stated at [77] that:

“ the creation of an implied term, as contended for in this case, would go significantly beyond that which could be rationalised as a necessary incident of all worker relationships, or even a reasonably necessary one, and hence it cannot be supported by the principles of implication that I take from authorities such as Liverpool CC v Irwin [1977] AC 239, and Société Générale London Branch v Geys [2013] ICR 117. It would be of a materially different kind from implied terms, such as the duty of trust and confidence, which reflect features that are inherent in all working relationships, or the term implied in a case such as Geys, which reflects the practically necessary incidents of a notice of termination of employment in every case. Nor do I think that common law principles support the implication of such a term into all worker contracts of the zero-hours or bank types. The introduction of such a term would materially alter the nature of contractual relationships of this type.”

Comment

This appeal resolves an issue which was generating differing first instance decisions and makes clear that casual/zero-hours workers who are suspended and thus not offered work are not entitled to any wages during that time. It further distinguishes Obi and provides clarity to employment tribunals on how to approach wages claims brought by casual workers.

Conor Kennedy appeared for the successful Respondent and was instructed by Capsticks Solicitors LLP.

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Conor Kennedy

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