Variation of contract proves expensive

Variation of contract proves expensive
Chubb Security Personnel Limited v Bates, EAT, 3 August 2004

Bates worked as a security guard on a shift system. In a three-week period, he worked 18, 45 and 60 hours respectively – an average of 41 hours a week. Overtime was paid at time-and-a-half at the basic rate of pay calculated on a 41-hour working week.

Following the transfer of the business to Chubb, Bates’ hours of work did not change. However, rather than paying him a notional 41 hours per week, he was paid each week for the actual hours worked on an hourly basis. Consequently, his take-home pay varied from month to month depending on the cycle of three weeks.

Bates brought a tribunal complaint arguing that because of the changes to the pay arrangements and the fact that his basic contractual hours were 41 hours per week, anything he worked in excess of that (in his case, weeks two and three of the cycle) should be paid at Chubb’s overtime rate. Failure to do so constituted an ongoing unlawful deduction of wages.

The majority of the tribunal (the chairman dissenting) agreed that despite being taken over the full three-week period, Bates was not actually working any more hours than he had been previously. Chubb unsuccessfully appealed. Again by a majority, the Employment Appeal Tribunal found that Chubb had unilaterally decided to alter the method of payment of wages, in breach of TUPE, and in doing so, had brought the overtime provisions into effect.

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