Phoenix Legal Solicitors acted on behalf of Angela Maull in a claim for breach of contract against the Home Office who, after offering our client a position on £33,032 in November 2018 and paying her the agreed salary for over 4mths, unilaterally and without agreement reduced our client’s basic salary to £29,040 by sending our client a new contract of employment. Our client refused to sign the new contract of employment.
The Home Office claimed that they had made a mistake in our client’s place of work, when sending her the original contract, as they had her place of work as Croydon, when her place of work was Liverpool. The Claimant stated that she did go to Croydon for work, approximately 3 days a week, until she fell ill, after which it was agreed that she would work out of Liverpool whilst undergoing tests. Our client’s case was that the Defendant had deliberately offered her £33,032 salary to match her previous salary in the NHS, otherwise she would not have taken the job and this was supported by a business cases as per their own policy not to start on the lowest pay banding due to extensive experience. Even if the salary was offered in mistake (which she did not accept) she had signed the contract in good faith and both her and the Defendant were bound by its terms.
From June 2019 the Defendant paid our client a reduced ‘Basic Rate’ of £29,040pa and an additional amount described as ‘Mark Time’ of £3,992pa. The Defendant submitted that as a result our client received the agreed salary of £33,032 and so had suffered no loss and in turn no breach of contract. It was argued that nothing within the Terms and Conditions of Employment granted the Defendant a right to reduce our client’s basic rate of pay and describe a portion equal to the reduction as “Mark Time” such that it did not then attract salary related workplace benefits.
In October 2019 and November 2020 members of staff at the Home Office were awarded a pay increase. As a result of our client being in receipt of “Mark Time” our client did not receive the benefit of the pay increases as the Marked Time errored any pay increase. Furthermore, when our client was on secondment, she was entitled to a 10% pay increase. However, due to the Mark Time payment, our client did not receive this pay increase either. Therefore, it was submitted, that although our client did receive a yearly total of £33,032, as this was split between a reduced basic salary and Marked Time it caused detriment to our client which resulted in a loss in pay and loss in pension contributions.
The Defendant argued that our client had no entitlement to any pay increases as these are at the Defendant’s discretion and so this did not constitute a breach of contract.
Despite repeated offers to settle by the Claimant, the Home Office did not enter into negotiations, and ran the matter to a final hearing. At the hearing a costs schedule was submitted by the Home Office of almost £50,000 meaning that the Home Office had spent nearly £50,000 of tax-payers money in its unsuccessful defence of the claim.
At the hearing it was submitted that there was an offer of a basic salary, there was acceptance of that offer and consideration passing between the parties and therefore a contract by which the parties were bound. Although the Defendant had offered the Claimant a new contract with the only changes being her place of work and a reduced salary, nothing else changed and nor did her role. The Claimant had never accepted the offer of a new contract with reduced basic pay.
At the hearing the Judge found that the Claimant applied for an HEO role. She had been working in the NHS on £33,271. In June she had an interview and she accepted the provisional offer. In December 2018, she got a job offer, which said her starting salary would be £33,032. She accepted that and started work on 10 December 2018. In April 2019, she was sent a revised offer which said her salary was £29,040. The Claimant took issue with this. Part of her salary was then reduced salary and part of it was Mark Time. In October 2019, there was a pay increase but the Claimant’s pay did not go up.
In July 2020, she began a Secondment. In November 2020, there’s a further salary increases and again the Claimant’s take home pay remained unchanged.
The Claimant’s manager asked for an increase because of the Secondment by submitting a business case. However, the Defendant’s case is that the original offer of £33.032 was in error and because there was no evidence, she would have left her specialist role on the secondment she wasn’t entitled to the increase.
The Claimant said she never agreed to the variation and that she should be paid as per the December 2018 contract, and she says she has incurred losses because of the Defendant’ s position.
The Defendant has not suggested that the contract should be set aside because of unilateral mistake. The Defendant recognised the hardship and paid the Claimant at an increased rate, not by maintaining her salary but by reducing her salary and paying a further adjustment, ie Mark Time.
The Claimant gave evidence in a straightforward manner about her medical condition meaning that she didn’t visit Croydon and as part of her return to work, she worked in Liverpool.
In terms of the Defendant’s evidence, it was accepted that the use of Mark Time is to correct an error or to add a shortfall in earnings.
It was submitted by the Defendant that the location of work changed. This was rejected by the Judge, who stated that this was not how it was presented to the Claimant. Had the Defendant moved her and physically changed her work, that may result in a reason for reducing the salary, but there was no change here. The change was to correct an error that crept in earlier.
It deciding whether the Claimant had suffered loss the Judge commented that there are three ways in which it is less advantageous.
- The pay increases are applied to basic pay
- TCA secondment – the 10% is applied to the basic pay, Mark Time is excluded
- Mark Time is temporary. As basic pay increases, the amount of Mark Time decreases so the Claimant’ s monthly pay didn’ t increase for many years and she saw no benefit of her pay increase. Whilst pay increases are discretionary, they were paid.
In terms of assessing her damages, the Judge stated that the Claimant had to be put in the same situation as if the contract had been performed. The Claimant was entitled to an uplift in October 2019 and 2020 and she missed out on those. She further missed out in respect of the secondment.
The Court found in favour of the Claimant and sums were awarded in respect of the loss of secondment pay, loss in increases and loss in pension contributions.
Counsel instructed for the Claimant was Peter Harthan of 7 Harrington Street Chambers who commented as follows: “The Home Office picked the wrong person to short change and I was struck by the Claimant’s sturdy, radical, independence of mind in taking on and winning her legal fight against a big Government department with far greater resources. This was a case about offer and acceptance. The Home Office spent nearly £50,000 of taxpayer’s money on legal services only to get the wrong answer to a topic which is covered in the first lecture of a Contract Law course. I am delighted to have assisted the Claimant in ensuring that the Home Office paid her as agreed on her contract of employment. Her victory in Court shows that Government departments must meet their contractual obligations to civil servants and cannot assume that employees will roll over or be pressured into accepting less favourable terms of payment to those which have been agreed.”
Angela Maull comments: I am absolutely delighted to have won my case which I would not have done without the help and confidence boost from Alisha and her team at Phoenix Solicitors and Mr Peter Harthan who explained the legal process and the law when I was very unsure and a bit scared to challenge such a big government organisation. The Home Office behaviour is very disappointing and a waste of taxpayer money. I hope my Home office colleagues read my story (because I know I’m not the one they have done this to) and get in touch with Alisha at Phoenix Solicitors to pursue and receive what they are rightfully owed if they are on marked time.
Alisha Butler from Phoenix Solicitors comments: “Angela had a very strong case from the outset which to us was a very clear breach of contract. It is a shame that the Home Office chose to waste nearly £50,000 of tax payers money on a claim that could and should have been settled when we made early attempts to negotiate. Our attempts were ignored and this is a the problem facing Claimant Solicitors. Often we are portrayed as “ambulance chasers” when the reality is we just want justice for our clients. Our costs in this matter were assessed by the Court at around £7,600 yet the Home Office were content to spend vast sums defending a very simple case of breach of contract. The right decision was made by the Court and we would invite anyone else in the same situation to get in touch with us”
You can contact Alisha Butler on ab@phoenixlegalsolicitors.co.uk or by calling 0151 306 3694
This story is covered by the Wirral Globe – https://www.wirralglobe.co.uk/news/20610767.neston-ex-home-office-employee-awarded-underpayment-costs/