The Employment Appeal Tribunal (EAT) has allowed an employer’s appeal against a decision that there was an implied term in a lorry driver’s contract that entitled him to be paid for additional hours worked beyond his intended normal working hours.
The driver’s contract required him to work five shifts a week. The average length of a shift was intended to be 9.4 hours, subject to a requirement to work such hours as were necessary for the proper performance of his duties. He was paid overtime when he worked additional shifts or half shifts, and typically received an ad hoc payment when he accepted additional delivery rounds during one of his regular shifts. However, he did not receive any additional payment if his allocated delivery rounds took longer than expected. He brought a claim for unpaid wages under Section 13 of the Employment Rights Act 1996, arguing that he was entitled to pro rata payments based on his annual salary for hours worked beyond his contracted hours.
The ET held that his contract provided for an averaging out of his working hours. It was agreed that his average shift length over the relevant period was 10 hours and 7 minutes. The contract was silent on what should happen if his average shift ended up being longer than 9.4 hours and his employer failed to shorten subsequent shifts in return. The ET found that, had the parties considered that situation when the contract was signed, they would have accepted that the driver would be paid for the additional work instead. The ET ruled that a term to that effect should be implied into the contract and ordered his employer to pay him £4,689.
The employer appealed to the EAT on the ground that it was an error of law for the ET to imply such a term into the contract. The EAT noted that, to imply a term into a contract, it must be necessary to give business efficacy to the contract or it must represent the obvious but unexpressed intention of the parties. A term should not be implied that conflicts with an express term.
The EAT noted the requirement that the driver work such hours as were necessary for the proper performance of his duties. Read as a whole, and having particular regard to that requirement, the references in the contract to intended or average hours were not intended to have the contractual effect attributed to them by the ET. Even if the EAT was wrong about that, the contractual mechanism for ‘averaging out’ that the ET had envisaged did not give rise to the need for an implied term.
The EAT considered that the driver’s contract entitled him only to his basic salary for working five shifts per week of variable length. In any event, neither business efficacy nor the unexpressed intention of the parties justified the implication of a term that he would be paid for additional hours worked where the overtime provisions were not engaged. The EAT set aside the ET’s decision and dismissed the claim.