Landmark ruling finds Post Office subjected workers to ‘unlawful deduction of wages’

Postal workers have recorded a ‘landmark’ legal victory after an employment tribunal found their employer was unable to impose a change of pay schedule from weekly to monthly without their explicit consent.

In a case that may have broader ramifications in the postal service and beyond, Philip Gower and Julie Donnelly took the Post Office to tribunal through their union after it announced in 2016 that it intended to move 1,230 employees onto a new salary schedule.

While both Gower and Donnelly said they had emphatically rejected the new contractual variations before they came into effect, the Post Office argued that, as both employees continued to attend work and receive pay, they had accepted the change. It added that as the employees had not made it clear they were “working under protest”, and had accepted loans from their employer, they had implicitly agreed to the changes.

However, the tribunal rejected this argument, ruling that, by not paying the workers each week, the Post Office had subjected them to an unlawful deduction of wages. It additionally found the pair were entitled to be paid every week – and for every Friday they were not paid, the Post Office would be in breach of contract.

“In this case, the Post Office tried to impose on employees a variation of their contracts to change from weekly to monthly pay,” Laurie Anstis, employment law director at Boyes Turner, told People Management. “The tribunal found there was no right to vary the contract in this way. The fact that the employees had worked on 'under protest' did not mean they had accepted the change.”

Following the ruling, Communication Workers Union (CWU) assistant secretary Andy Furey said the union, which brought the claim on behalf of its members, had stressed that the Post Office needed to obtain agreement from its employees, and pay compensation to those willing to make the change, if it was to successfully implement a salary alteration.

“Instead, the Post Office just went ahead and tried to impose the change,” he said. “We offered to take the issue to Acas for resolution, but the Post Office dismissed the offer out of hand. Well, now that chicken has come home to roost.”

The tribunal decision additionally ruled that Gower and Donnelly were entitled to two weeks’ extra pay on top of their wages, as the Post Office had imposed the wage change without varying employees’ terms and conditions of employment in a valid manner.

"An employer only has the right to impose a variation such as this where the contract clearly allows it, and by working on under protest the employees retained their right to hold the employer to their original terms and conditions,” Anstis said.

“The judge in this case hinted that the Post Office may have been better off ending the existing contract by dismissing the employees and then offering them a fresh contract on the new terms. That requires careful handling, but will sometimes be a better option for employers than trying to impose a variation.”

The CWU said it was preparing to make similar claims concerning other members being paid weekly, and urged the Post Office to enter arbitration on the matter.

The union is currently pursuing a separate claim at employment tribunal to seek ‘worker status’ for its postmaster members, in line with a series of landmark legal cases on the gig economy. These include a recent Employment Appeal Tribunal ruling, which found that Uber drivers were workers and were therefore entitled to employment rights including paid holiday leave and the national minimum wage. This week, however, delivery company Deliveroo won a case ruling that its drivers were classed as self-employed and could not claim these rights.

A Post Office spokesman said: “We continue to reflect on the judgment and are considering our next steps. The vast majority of people working for Post Office have been paid on a monthly basis for many years. This change was required to ensure all employees are served by a robust and efficient payroll system that also supports meeting our pension automatic enrolment obligations, which were introduced in May 2017.
 
“Post Office went to great lengths to ensure that no employee was adversely affected financially, through providing an interest-free salary advance of four weeks' pay with a variety of repayment options, which included repayment of the loan on the employee leaving the business, payment of any bank charges or penalties incurred and the provision of financial planning advice. It was accepted that the two claimants have not financially lost out because of the change from weekly to monthly pay.”


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