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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Whitehouse v. North Bristol NHS Trust [2006] UKEAT 0133_06_1007 (10 July 2006)
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Cite as: [2006] UKEAT 0133_06_1007

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BAILII case number: [2006] UKEAT 0133_06_1007
Appeal No. UKEAT/0133/06

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
             At the Tribunal
             On 4 May 2006
             Judgment delivered on 10 July 2006

Before

HIS HONOUR JUDGE SEROTA QC

(SITTING ALONE)



DR M WHITEHOUSE APPELLANT

NORTH BRISTOL NHS TRUST RESPONDENT


Transcript of Proceedings

JUDGMENT

___________________________________________________________________

© Copyright 2006


    SUMMARY

    This case concerns the construction of certain terms and conditions of employment of Junior Hospital Doctors, in particular with regard to pay protection. I was told that the case is of general importance to many Doctors and Health Authorities. I was told that varying constructions have been placed on the relevant conditions by different Health Authorities.


     

    HIS HONOUR JUDGE SEROTA QC

    Introduction

  1. This case concerns the construction of certain terms and conditions of employment of Junior Hospital Doctors, in particular with regard to pay protection. I was told that the case is of general importance to many Doctors and Health Authorities. I was told that varying constructions have been placed on the relevant conditions by different Health Authorities.
  2. This is an appeal from a decision of the Employment Tribunal at Bristol promulgated on 12 December 2005. The decision was that of the Chairman R.D. Miles Esq. sitting alone. He dismissed the Claimant's claim for unlawful deduction from wages under S.13 of the Employment Rights Act 1996. It is pleasing to note that the appeal was heard as early as 4th May 2006.
  3. The background to the dispute is to be found in the changes in the pay structure of Junior Hospital Doctors consequent I believe, on a decision to reduce their long hours of duty, under the so called 'New Deal', promulgated in December 2000.
  4. Junior Doctors spend approximately three years in various training posts. These are referred to as a 'rotation'. The rotation period I was told was the period that must elapse before a Junior Doctor is able to apply for a Registrar's post, a clinical fellowship or something similar. These training posts are of relatively short duration and I was told that the posting will generally last for some three months but may be for a longer period of up to a year. Junior Doctors move between posts to gain experience in different fields of medical practice. In the present case Dr Whitehouse will have served in 9 posts over a 3 year period.
  5. The 'New Deal' replaced the existing system of payment for Junior Doctors. The scheme provides for payment for additional duty hours over the standard 40 hour week with a system of pay banding which rates pay for Junior Doctors by reference to a number of factors, including work intensity, hours and unbroken rest entitlements. Band 3 is the highest band and the bands move down through 2a, 2b, 1a, 1b to 1c. Band 3 represents a post which is non-compliant with the New Deal and is thus particularly demanding. The total salary of Junior Doctors would be calculated by reference to base salary to which a supplement, calculated as a proportion of the base salary, is added, according to the band to which the Doctor is allocated. I set out the relevant bands and the uplift on base salary.
  6.  

    Band/date 1 December 2000 1 December 2001 1 December 2002
    Band 3 62% (1.62) 70% (1.7) 100% (2.0)
    Band 2A 50% (1.5) 60% (1.6) 80% (1.8)
    Band 2B 42% (1.42) 42% (1.42) 50% (1.5)
    Band 1A 42% (1.42) 42% (1.42) 50% (1.5)
    Band 1B 30% (1.3) 30% (1.3) 40% (1.4)
    Band 1C 20% (1.2) 20% (1.2) 20% (1.2)

  7. Junior Doctors will accept their posts well in advance. Thus in the present case Dr Whitehouse accepted an offer dated 19 May 2003 for the post of Senior House Officer on Surgical Rotation with some 9 posts for the period 6th August 2003 to 1 August 2006. It happens quite frequently that as the duties of a particular post changes, it will be 'rebanded'. The rebanding may occur between the date of acceptance of the post and the date the Doctor in question actually takes up his position. In order to mitigate the potential hardship that might be caused by rebanding, if a Doctor had budgeted on receiving a particular salary from a given post but found it had been rebanded to a lower band by the time he came to take it up, he was offered a form of pay protection. His salary is guaranteed to at least match the salary he would have received had the placement began at the time of acceptance, notwithstanding a later downward banding. This appeal concerns the construction of what amounts to the pay protection scheme. I note at this point that posts to which pay protection is applied are referred to as 'protected posts'.
  8. The contractual position

  9. The relevant contractual terms are to be found firstly in the National Health Service Hospital Medical and Dental Staff and Doctors in Public Health Medicine and the Community Health Service Terms and Conditions of Service. This is something of a mouthful so I will refer to them as the 'terms and conditions'. The terms and conditions are part of the Whitley pay structure. The changes brought about by the terms and conditions, with effect from 7th February 2001 by what is referred to as an advanced letter from the NHS Executive. This also has contractual effect.
  10. The relevant provisions of the terms and conditions are to be found at paragraph 21 (f) to (m) which I now set out:
  11. "Principles of pay protection
    f. The principle of pay protection applies to practitioners in all bands for the duration of the post/placement or within a rotation subject to the conditions set out in sub-paragraphs 21.h to m.
    g. Pay protection applies to the base salary on the scale plus the supplement in payment at the time the post or placement is rebanded. The salary shall be increased only to take account of increments in the base salary on the old scale.
    Pay protection in New Deal compliant posts
    h. Where a practitioner reaches agreement with his or her employing authority on a new or revised contract on or after 1 December 2000, the practitioner's post shall be re-assessed in accordance with paragraphs 19 to 23, effective from the date of the change. For so long as it is more favourable, and so long as the practitioner remains in the same post, the practitioner shall retain the overall salary applicable to the band he or she was placed in immediately before the change. The salary shall be increased only to take account of increments in the base salary on the old scale.
    i. If a practitioner in a rotational appointment has accepted appointment to a future post in that rotation for which a New Deal compliant pay band assessment has been made at the time of appointment to the rotation and the duties of that future post have been changed before the practitioner actually takes it up, then sub-paragraph 21.h shall apply, and the practitioner shall be treated as if he or she had already been occupying the post at the time of the change. If no assessment of the pay band has been made at the time of appointment then sub-paragraphs 21.c, d and e apply.
    Pay protection in New Deal non-compliant posts
    j. Where a New Deal non-compliant post/placement (pay band 3) becomes compliant before 1 December 2002, the practitioner shall retain the overall salary protected at the pay band 3 rate applicable at the time of rebanding, for so long as it is more favourable and for the duration of the post/placement. The salary shall be increased only to take account of increments in the base salary on the old scale.
    k. Where a New Deal non-compliant post/placement (pay band 3) becomes compliant on or after 1 December 2002, the practitioner shall have their salary protected at the pay band 2A rate applicable at the time of rebanding, for so long as it is more favourable and for the duration of the post/placement. The salary shall be increased only to take account of increments in the base salary on the old scale.
    l. Where a future post/placement in a rotation, which has been accepted by the practitioner at pay band 3, becomes compliant before 1 December 2002, the practitioner when they take up that post/placement shall retain the overall salary protected at the pay band 3 rate applicable at the time of the rebanding, for so long as it is more favourable and for the duration of that post/placement. The salary shall be increased only to take account of increments in the base salary on the old scale.
    m. Where a future post/placement in a rotation, which has been accepted by the practitioner at pay band 3, becomes compliant on or after 1 December 2002, the practitioner when they take up that post/placement shall have their salary protected at the pay band 2A rate applicable at the time of the rebanding, for so long as it is more favourable and for the duration of that post/placement. The salary shall be increased only to take account of increments in the base salary on the old scale."

  12. I also need to refer to paragraphs 22, 31 and 32 of the Advance Letter which are as follows:
  13. 22. The objective of the contract is, over time, to reduce the hours worked by junior doctors. The changes in contractual terms must not be used as a justification to increase hours worked in any post. On and following implementation, any substantive change to the working pattern of any existing post which may lead to an increase in the hours worked can only be introduced with the assent of the postholder and the approval of the regional improving junior doctors working lives action team (or equivalent). The nature of the approval system is contained in the implementation guidance "A general guide to the new pay system" which accompanies HSC 2000/031.
    Pay protection arrangements for compliant posts after transition
    31. For compliant posts/placements which are rebanded to a lower band, postholders shall have salary protected at the rate of the original band applicable at the time of rebanding on a mark time basis, i.e. for so long as it remains favourable, for the duration of the post/placement. Salaries to be increased only to take account of increments in the base salary on the scale applicable at the time of appointment, excluding any changes to the supplement rate.
    32. For rotations, future posts/placements which have been accepted by the appointee at a compliant band that are rebanded to a lower band shall have salary protected at the rate of the original band applicable at the time of rebanding on a mark time basis, i.e. for so long as it remains favourable, for the duration of the post/placement. Salaries to be increased only to take account of increments in the base salary on the scale applicable at the time of appointment, excluding any changes to the supplement rate.."
  14. I am told by Counsel that a Junior Doctor's salary will increase in two ways. Firstly his salary will increase each year as the result of the annual pay round. Secondly, the salary will increase by reason of increments or spinal points. These are earned by reference both to length of service and acquisition of particular skills as a Junior Doctor completes his various specialist placements.
  15. The proceedings before the Employment Tribunal

  16. The order in which the Claimant's placements were to be taken as set out in Dr Whitehouse's letter of appointment dated 19 May 2003 was evidently changed. Dr Whitehouse worked as a Senior House Officer in Trauma and Orthopaedics from 2 February 2005 until 3 May 2005. (The letter of appointment does not in fact refer to this placement, but nothing appears to turn on this). The post was originally banded as 2A which at the relevant time attracted an uplift of 80%. However in August 2003 it was rebanded to band 2.b which attracted an uplift of 50%. It thus became a protected post.
  17. Dr Whitehouse contended that he was entitled to be paid at the point in the scale (point 2) he had reached at the time he took up the post but at the pay scale in force immediately before the rebanding. He claimed the sum of £12,184 gross. The Respondent contended that he was entitled only to be paid at the scale point he had reached at the time of rebanding (scale point 0) on the pay scale in force at that time so he would be entitled to receive £10,744 gross. Dr Whitehouse claimed the difference as a wrongful deduction from wages under S. 13 of the Employment Rights Act 1996. The issue between the parties was clearly whether Dr Whitehouse was entitled to the benefit of the increments or spinal points he had earned as at the date he took up the Senior House Officer post in Trauma and Orthopaedics on 2 February 2005.
  18. I note at this stage that despite the varying constructions that have been placed on the relevant conditions by different Health Authorities, the Department of Health has declined to become involved in the proceedings.
  19. The Chairman, Mr. R. D. Miles noted that neither party had adduced evidence as to the intention of the parties when the terms were negotiated, nor had any evidence as to custom and practice or other evidence as to construction consistent with practice. He approached the question on the basis that the terms in question were negotiated between bodies representing the interests of the employers and the employed Doctors whose bargaining power was as approximately equal insofar as the position in pay negotiations as between an employer and employee could ever be so described. I shall approach this appeal on the same basis. I do not doubt that useful evidence as to the relevant factual matrix could have been given by those responsible for negotiating the 'New Deal' both at the British Medical Association and at the Department of Health.
  20. I also agree with the Chairman that there is confusion in terminology manifest throughout all the contractual documents and that it is unsurprising different NHS Trusts have interpreted them differently.
  21. The Chairman considered that the Pay Protection Scheme was in concept not a basic [or base] salary scheme in itself but a system of extra payments applied to basic salary in certain circumstances. He gave particular weight to the stipulated principles of pay protection to be found in clause 21 [f] – [g] of the terms and conditions as being the best evidence of what the parties intended to achieve by the Pay Protection Scheme. Clause 21 [g] was clumsily worded but clauses 21[h] – [m] were an aid to the construction of clause 21 [g] because the last sentence of 21 [g] was deliberately repeated in clauses 21. [j], [j], [k], [l] and [m]. The Chairman considered that the clause applicable to Dr Whitehouse was 21 [h].
  22. The Chairman recorded at paragraph 20 that 'it is agreed that the base salary applicable to a protected placement increases, for example by reason of seniority increments and the annual NHS pay round'. He went on to say that as the career of a Junior Doctor progresses through the system his position will advance and with it command commensurate increases in base salary. Thus a pay protected salary cannot of necessity last for a long time and it would seem logical to regard the Pay Protection Scheme as running parallel to non-pay protected salary. He acknowledged that there were some cases in which a Junior Doctor could earn more than an immediate senior because of intensity of work rosters. Nevertheless consistent with the principles of the Pay Protection Scheme, pay protection should not mean that an individual's overall protected salary would year on year be higher than the salary levels the Doctor would receive on the current applicable non-protected basis.
  23. The Chairman concluded that 'overall salary' in clause 21 [h] means properly read, 'salary in the relevant year'. Accordingly he concluded that the Pay Protection Scheme runs in parallel with the non-protected system of pay and as the base salary of the individual increases through the annual pay round or uplifts for skills and experience, the additional supplement (which together with the base sum constitutes the overall salary) will diminish gradually until the two parallel systems harmonise. This would enable the Doctor having achieved promotion as appropriate, to move through the career structure on a non-protected basis simply because the original protection envisaged during the period of training falls away.
  24. In the circumstances he did not consider it necessary to have recourse to doctrine of contra proferentem urged upon him by the Claimant as he had reached his decision by striving to discern the parties' intention by fairly construing the words used in their proper context and in accordance with their proper meaning. He was thus able to deal with the apparent conflict between first and second sentences of clause 21 [g] and the conditions such as clause 21 [h] to which the principle [of pay protection] is expressly subject. The effect of his findings was that the Respondent had calculated the salary correctly for the relevant period by discounting the increments that would have been payable in respect of a non-protected post. In the circumstances Dr Whitehouse had failed to show that the sum was 'properly payable' under a 'relevant provision' and his claim was dismissed.
  25. I note that the Chairman did not rely upon any provisions of the Advance Letter in reaching his conclusions.
  26. The Claimant's submissions

  27. Mr Nicholas Smith, who appeared for Dr Whitehouse correctly submitted that the question of construction of the terms and conditions was a matter of law and relied upon Davies v Presbyterian Church of Wales [1986] IRLR [HL] 194. This is not controversial. He also correctly identified the crucial clauses as being 21 [g] and 21 [h].
  28. Mr Smith firstly submitted before me as he had before the Chairman, that the sentence common to both clauses specifically envisaged increases in overall salary.
  29. "The salary shall be increased only to take account of increments in the base salary on the old scale"

  30. He submitted that this clearly envisages that increases to overall salary are contemplated but limited to 'increments'. This would not include increases that accrued as result of the annual pay round. In his submission 'the salary' must mean 'overall salary'. If it meant 'base salary' only the sentence would not read correctly because the word 'base' would have been used twice in the same sentence. Accordingly if 'salary' in those sentences is correctly defined as 'overall' salary, there would be an inconsistency in finding that the protected pay will diminish until a point where the two systems [protected pay and unprotected pay] harmonise.
  31. In his notice of appeal Mr Smith suggested that the Chairman had not adequately explained how he reached conclusion that there was a mechanism that allowed the supplement to gradually diminish and that accordingly his reasoning or failure explain his reasoning was an error of law or perverse
  32. The second and third grounds of appeal also raise issues as to absence of reasoning on the part of the Chairman. Ground 2 makes a point in relation to the construction of the phrase 'for so long as it is more favourable' in clause 21 [h]. Ground 3 suggests that the Chairman was wrong in failing to find the basis upon which any element of pay [basic or the supplement] could be reduced during the currency of a rotation when the contractual terms expressly provided for the increase 'only to take account of increments in the base salary' in clauses 21 [h], [j], [k], [l] and [m]. He also made no findings as to the interpretation of the Advance Letter. The Advance Letter was relevant because of the use of the expression 'mark time' which was not used in the terms and conditions. Moreover paragraph 32 of the Advance Letter makes no reference to 'overall salary' as one finds in clause 21 [h] of the terms and conditions. This is said to reinforce the submission there is no material distinction between 'overall salary' and 'salary' and also to support the contention that overall salary can be increased 'only to take account of increments in the base salary on the scale applicable at the time of appointment'. The suggestion that the Chairman had failed adequately to explain his reasoning was never raised with him after his decision was promulgated.
  33. It will be seen that Dr. Whitehouse in both his notice of appeal and in Mr Smith's skeleton argument was attempting to raise an argument based on Meek v City of Birmingham 1987 IRLR 250 [CA] to the effect that the decision was defective because of lack of adequate findings or reasoning. I do not consider that such an argument is necessary in this case, which depends on a clear point of construction, and indeed it was not advanced in oral submissions. I had, however, drawn the parties' attention to my decision in the case of Bansi v Alpha Flight Services [unreported] UKEAT/0652/03. I should like to take the opportunity to reiterate what I said in that case with the concurrence of the then President, Sir Michael Burton.
  34. "21 In English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605, [2002] 1 WLR 2409 the Court of Appeal gave guidance as to the circumstances in which a Judge might be invited to amplify his reasons and findings where these are considered to be insufficient. The EAT has adopted the approach recommended by the Court of Appeal on a number of occasions and remitted cases to the ET for amplification of reasons at an early stage in the appeal process; see Adebowale v Peninsula Business Services (EAT/1135/02/DA) in which the President said that the Court of Appeal had
    "expressly encouraged Courts considering whether an appeal should proceed on grounds of alleged failure to make findings, or alleged absence of reasons, to consider referring the case back to the lower Court for clarification"".
    We need not, therefore set out the dicta in English v Emery Reimbold & Strick.
    22 In Re T (a child: contact) 2003 1 FLR 303 (a care case) the Court of Appeal took the question of seeking clarification from a first instance Judge a stage further. Arden LJ , having considered English v Emery Reimbold & Strick Ltd went on to say that the principle applied to appeals in care cases as well as to other appeals. She said at p.320
    "In a complex case, it might well be prudent, and certainly not out of place, for the judge, having handed down or delivered judgment, to ask the advocates whether there are any matters which he has not covered. Even if he does not, as a matter of courtesy at least, to draw the judge's attention to any material omission of which he is then aware or then believes exists. It is well-established that it is open to a judge to amend his judgment, if he thinks fit, at any time up to the drawing of the order. In many cases, the advocate ought to raise the matter with the judge in pursuance of his duty to assist the court to achieve the overriding objective (CPR 1.3, which does not as such apply to these proceedings); and in some cases, it may follow from the advocate's duty not to mislead the court that he should raise the matter rather than allow the order to be drawn. It would be unsatisfactory to use an omission by a judge to deal with a point in a judgment as grounds for an application for appeal if the matter has not been brought to the judge's attention when there was a ready opportunity so to do. Unnecessary costs and delay may result. I should make it clear that there are general observations for assistance in future cases, and that I make no criticisms of counsel in this case".
    In our opinion it is certainly good practice where parties are legally represented in Employment Tribunals, for advocates to ask the Tribunal to amplify its reasoning where it is considered that there has been a material omission in its findings of fact or in its consideration of the issues of fact and law before it. Where reasons are given extempore the application should be made at the time. If reasons are given in writing the request should be made as soon as possible after the reasons are received. We would encourage advocates to seek clarification from the ET promptly in any case where there might otherwise be an appeal based on alleged insufficiency of reasons. It is much easier for Tribunals to deal with requests for clarification when they are fresh in their minds and the amplification of insufficient reasons and finding will save the parties time and expense and may in some cases obviate the need for an appeal and subsequent remission of the case.
    23 The approach we have set out above is wholly consistent with the overriding objective and the principles that should govern appeals before the EAT."

  35. In his oral submissions Mr. Smith stressed the importance to Junior Doctors of being able to budget their income and expenditure at the time they agree a rotation.
  36. At one time he was minded to concede that if his construction was correct there never could be a time when the protected salary would be higher than the actual salary because it would always increase by more than any increase in the actual salary for the particular rebanded post. However, he later acknowledged that this was not correct because the old salary would remain static (in the sense that increases from the annual pay round would not be included) and the Claimant would only be entitled to increases by way of increment. The increment would of course be earned as a result of length of service and experience obtained. I can see that in certain circumstances, for example a Junior Doctor whose 1A post is rebanded to 1B at the beginning of a rotation, but who takes up the post over 2 years later might be better off on the new rather than the protected salary, assuming there to have been relatively generous awards in the annual pay round.
  37. The Respondent's submissions

  38. Mr Donovan who appeared for the NHS Trust naturally supported the decision of the Chairman but he also sought to justify the construction favoured by the Chairman on wider grounds.
  39. Mr Donovan submitted that the term "overall salary" in clause 21[h] meant the salary that pertained in the year in which the rebanding occurred. This constituted the salary that is protected. I do not see any difficulty with the submission thus far. However, Mr Donovan went on to submit that the overall salary remained fixed and constant. He sought to draw assistance from the use of the word 'retain' in the phrase 'the practitioner shall retain the overall salary'. He submitted that a salary is not 'retained' if it is increased by increments. Mr Donovan asked that I should conclude the last sentence should be understood as referring to an increase in base salary and not overall salary. The last sentence of clause 21[h] should be read as though it said 'The [base] salary shall be increased only to take account of increments in the base salary on the old scale'.
  40. Mr Donovan made two further points. Firstly he submitted that clauses 31 and 32 of the Advance Letter was an important tool in the construction of clause 21[h] because of the reference to salary being protected on a 'mark time basis' which suggested that the protected salary was in effect to remain constant until overtaken by the actual salary. He also suggested that clause 41 of the Advance letter [which I have not set out] provides that only base pay and not the banding supplement is pensionable. It is therefore in the interests of postholders for the ratio of base salary to increase during a placement because that enhances pensionable pay even though it does not increase take home pay.
  41. The points made by the Mr Donovan that I have set out in the preceding two paragraphs do not appear in the reasoning of the Chairman.
  42. Conclusions

  43. Neither party has sought to draw my attentions to any authorities relevant to the construction of documents but I have reminded myself of the principles set out by Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, in which he said:
  44. "My Lords, I will say at once that I prefer the approach of the learned judge. But I think I should preface my explanation of my reasons with some general remarks about the principles by which contractual documents are nowadays construed. I do not think that the fundamental change which has overtaken this branch of the law, particularly as a result of the speeches of Lord Wilberforce in Prenn v Simmonds [1971] 3 All ER 237 at 240–242, [1971] 1 WLR 1381 at 1384–1386 and Reardon Smith Line Ltd v Hansen-Tangen, Hansen-Tangen v Sanko Steamship Co [1976] 3 All ER 570, [1976] 1 WLR 989, is always sufficiently appreciated. The result has been, subject to one important exception, to assimilate the way in which such documents are interpreted by judges to the common sense principles by which any serious utterance would be interpreted in ordinary life. Almost all the old intellectual baggage of 'legal' interpretation has been discarded. The principles may be summarised as follows.
    (1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
    (2) The background was famously referred to by Lord Wilberforce as the 'matrix of fact', but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
    (3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.
    (4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax (see Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] 3 All ER 352, [1997] 2 WLR 945.
    (5) The 'rule' that words should be given their 'natural and ordinary meaning' reflects the commonsense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Cia Naviera SA v Salen Rederierna AB, The Antaios [1984] 3 All ER 229 at 233, [1985] AC 191 at 201:
    '… if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.'"

  45. The object of the system of pay protection, was I have noted, to mitigate the potential hardship that might be suffered by a Doctor who budgeted on the basis of his expected income in the expectation that ho would receive not less than the amount payable for each post in the rotation at the time the rotation is agreed. To some extent this object would be achieved by adopting the Respondent's construction. The Doctor would never receive less than the salary pertaining to the post in question at the time the rotation was agreed. However, in my opinion a Doctor budgeting on the basis of his income at the commencement of the rotation will know, and will presumably anticipate and will certainly be able to predict, that his salary will increase by reason of length of service end experience. Thus when he enters the post in question he will be anticipating receiving salary based on his length of service and experience. This particular point rather supports the Claimant's case.
  46. It is common ground that increases in base salary that accrue as a result of the annual pay settlement are excluded from the equation that determines the amount of protected pay.
  47. I take a different view to the Chairman and reject Mr Donovan's submissions, however, more on simple linguistic grounds. It seems to me that the 'salary' referred to in the last sentence of clause 21[h] of the terms and conditions is the 'overall salary' referred to in the previous sentence. It seems to me that the last sentence is explaining how and to what extent that salary is to be increased for the purposes of pay protection. The construction placed upon it by Mr Donovan is unreasonable as it would require the use of the term 'base salary' on two occasions. This would be clumsy and strained and would lead to what I consider a less likely meaning than that contended for by the Claimant. That meaning, as it seems to me, is more akin to the literal meaning of the provision.
  48. Further, Mr Donovan's construction would in effect deprive the last sentence of clause 21[h] of any meaning. The salary would not be increased to take account of increments or at all. Such a construction would do violence to the language and in my opinion, run counter to the obvious intention of the provision as expressed in its language. I cannot see that the phrase was intended simply to deal with pensionable pay. I prefer the construction that would limit protected pay to the old salary overall, including increments but ignoring the effects of the annual pay rise.
  49. I also do not draw any particular assistance from the word 'retain'. This, it seems to me in context, simply means that the practitioner will keep his base salary on the old scale but subject to increments as provided for in the following sentence. I do not see how it suggest that increments that would be earned regardless of the rebanding, are to be excluded,
  50. I appreciate that in paragraphs 31 and 32 of the Advance Letter salary is to be salary protected 'at the rate of the original band applicable at the time of rebanding on a mark time basis, i.e. for so long as it remains favourable'. I do not consider that the reference to 'a mark time basis' excluded increments accruing as a result of service and experience but would be meet to catch the annual pay round increases, which are clearly excluded.
  51. In the circumstances, therefore, I am unable to agree with the decision of the Chairman and would reverse the decision and find that on a true construction of the contractual provisions there has been an unlawful deduction of £1440.00 (or whatever the correct amount of the deduction is calculated to be in accordance with this judgment).
  52. It only remains for me to express my gratitude to Counsel for their helpful submissions and economic use of time.


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