Review of Recent NI Decisions - Withholding Increments and Time Limits

Today's article covers two areas - withholding increments and time limits.

Contractual Right to Withhold Increments

The first case concerned today is Fiona Jamieson, Danielle Courtney and Danielle Spackman -V- AIB Group (UK) PLC T/A First Trust Bank. Case reference 1815/10, 1816/10 and 1817/10 - decision issued May 2012.

Each of the employees were employed and each received an annual increment on their pay from the commencement of employment until 1 September 2009, when the payment of the increment was deferred until 1 July 2009 after negotiations between the Bank and the Irish Bank Officials’ Association (‘IBOA’), which led to an agreement to pay the increment but defer payment until 1 July 2009. No increment has been subsequently received.

Initially, the Bank contended that there was no contractual entitlement to the annual increment; but it was confirmed at the outset of the hearing that it now conceded and accepted that the employees had a contractual entitlement to the annual increments. The amount of the increments due had been agreed between the parties. However, the Bank still resisted the payment of the increment on the following alternative grounds:

(a) that it is implicit in the contract that the Bank can refuse to pay the annual increments on foot of exceptional trading and/or business conditions; and

(b) that the Bank has an express power to unilaterally vary each contract on the basis of –

(i) an express term in each contract;

(ii) an express term in the ‘Info bank’ document, which the respondent contends is incorporated in each claimant’s contract; and

(iii) that the contractual terms relating to payment of the annual increment was frustrated. 

In effect what was being argued was that the Bank sought to have inserted in the contract an implied right that it, as the employer, could withhold contractual payments on foot of exceptional trading and/or business conditions.

The tribunal was unanimously of the view that no such implied term exists. Any previous amendments to pay were dealt with within the collective bargaining system. The Bank did not seek to rely upon any such right in their negotiations with the IBOA. In their resolution of payment of the increment in 2009, the Bank sought to reserve the right to discuss pay issues in 2010. This is far from asserting a contractual right not to pay the increment. The tribunal was astonished that the Bank would seek to contend that it holds a right to unilaterally vary the terms of contracts with their employees because of the underlying financial circumstances the Bank faced in a difficult market place.

The frustration argument was not upheld by the tribunal. The Employees were entitled to their contractual increments and successful in their tribunal claims.

Tribunal Time Limits when Lodging Proceedings

The second case is Paul Patrick Coulter v Ulster Bank Ltd. Case reference: 90/11 FET and 1604/11, decision issued 21st May 2012.

Mr Coulter was dismissed by the Bank with effect from 16 March 2011. He pursued an internal appeal against that dismissal. In mid-June 2011, that internal appeal was still pending. Indeed, he was not informed of the (unsuccessful) outcome of the appeal until August 2011.

He presented his claim to the Tribunal on 8 July 2011. It is agreed between the parties that these proceedings were not presented within the time-limit for the presentation of unfair dismissal claims or discriminatory dismissal under FETO (1998).

The question for the tribunal was whether the time limits should be extended. The tribunal considered in detail the law and issues in both jurisdictions on time limits, where UD and FETO had separate tests.

The reason for extending the time limit under FETO (1998) were:

1. Mr Coulter’s ignorance, as to the length of the primary time-limit, was the fault of his solicitor. Tribunal decided not to impute that error to this claimant in this case.
2. The respondent has suffered no prejudice whatsoever from the delay in presenting the claim. (Its ability to defend itself against the claim of discriminatory dismissal has been in no way impaired by the short delay in presenting these proceedings).
3. The period of delay was very short indeed.

Tribunal stated that in considering the disapplication of primary time-limits, either in the context of personal injuries cases or in the context of discrimination cases, there is no rule of law that the discretion to extend must be denied to a claimant who fails to identify (to the satisfaction of the judicial adjudicator) the true reason for the delay in presenting proceedings.

The Tribunal bore in mind the principle that it is for the claimant to satisfy the judicial adjudicator that the time-limit should be extended and that, if that adjudicator is in doubt as to whether the time-limit extension should be granted, that doubt must be resolved in favour of the respondent.

The unfair dismissal time-limit issues

The Tribunal did not extend time for this claim. At the relevant time the claimant was suffering from depression and a severe family crisis which the tribunal accepted but went on to conclude that neither of these factors was the real reason for the failure to present the claim but that he did not know at any time prior to July 2011 that the time limit would expire in mid-June.
Ignorance of an unfair dismissal time-limit is a circumstance which can render it “not reasonably practicable” to present a claim for unfair dismissal, but only if that ignorance is regarded as being “reasonable” ignorance.

Furthermore, if a claimant is receiving advice from a solicitor during a period while he is ignorant of the time-limit, the reasonableness or unreasonableness of that claimant’s ignorance has to be assessed on the basis that any failures on the part of the solicitor are to be imputed to the claimant.

The Tribunal was satisfied that as a result, any fault on the part of Mr Rafferty has to be imputed to the claimant, in the context of considering whether any relevant ignorance (ignorance of the primary time-limit) was reasonable.

The Tribunal Chairperson concluded that, given the lack of evidence in relation to the omission on the part of the solicitor as to the reason for not advising of the relevant time limit, he was not "satisfied that it was not reasonably practicable” to present the claim within the primary time-limit.