A local authority's decision not to award incremental pay increases resulted in unlawful deductions of wages for some of its employees.

That was the decision of the Court of Appeal in a case involving Nottingham City Council and three groups of its employees.

The authority's administrative staff were graded on a "spinal column", with each spinal column point (SCP) denoting a salary level. They were entitled to move each year to the next SCP until they reached the top of their grade.

Manual workers had no such progression and so the authority wanted to eliminate that difference.

It created a new "core contract" with new terms and conditions for all employees, which did not explicitly mention pay progression but discussed bands and SCPs. A booklet illustrating the new system was issued, which stated that employees would gain an SCP each year.

In July 2010, the authority reached a collective agreement with the relevant trade unions, which did not explicitly refer to pay progression. The new terms took effect in November. In December, it announced a freeze on pay progression.

In 2013, the unions activated a grievance procedure. The authority denied that there was any contractual right to pay progression, and if there had been, the employees had accepted a variation to their contract by continuing to work without protest until 2013. 

The case went all the way to the Court of Appeal which ruled in favour of the employees. It held that the terms accepted by the administrative staff were contained in the booklet, which stated they had an entitlement to a pay progression.

The fact that the other two groups of employees never received the booklet was not important. The core contract implied pay progression. New employees would reasonably understand that their position would be the same as that of existing employees.

The court also rejected the authority's submission that the employees had accepted the variation by continuing to work without protest. It held that the variation had been wholly disadvantageous to the employees, yet the matter had not been put to them as requiring their agreement.

There had also been union protest before and after implementation of the freeze.

For further advice on any of the issues raised in this article, or for employment law advice more generally, please contact JPP Law on 020 3468 3064 or email info@jpplaw.co.uk