Sunderland Polytechnic v. Evans Employment Appeal Tribunal (EAT) Wood J., Mrs. T. Marsland and Mr. T. C. Thomas WOOD J. The following judgment of the appeal tribunal was handed down. This appeal raises a short but difficult point of law namely the proper construction of section 1(5)(e) of the Wages Act 1986. It will also require us to consider our reasoning in Home Office v. Ayres  I.C.R. 175 *394 . Since the decision in that case the House of Lords has given guidance on the approach which can be utilised in seeking to discover the true intent of Parliament in passing a particular statutory provision: see Pepper v. Hart  I.C.R. 291. We have had our attention drawn to passages in Hansard which indicate that some of the reasoning in Home Office v. Ayres is no longer correct. The applicant, Mrs. Ann Evans, is a barrister and a principal lecturer in law in the School of Business Studies at the Sunderland Polytechnic. She was employed on a full-time basis. She teaches a maximum of 10 sessions per week and undertakes many other responsible duties. She is a member of the National Association of Teachers in Further and Higher Education ("the trade union"). On 28 October 1990 that trade union told the polytechnic that its members intended to take part in a series of one-day strikes. By a letter of 2 November 1990 the director of the polytechnic wrote to all members of staff pointing out that participation in the industrial action, whether for a day or a less period, would constitute a serious breach of the contract of employment and that the polytechnic was not prepared to pay the contractual salary to a member of staff who participated. Participation for less than a day would constitute partial performance which was not acceptable and in those circumstances a full day's salary would be deducted. Any work done for part of a strike day would be regarded as undertaken on a purely gratuitous basis and would not merit pay. On 6 November 1990 the trade union called a half-day stoppage. Prior to that stoppage Dr. Wilson, the applicant's supervisor, had written to her and to others asking whether or not she proposed to join in the stoppage. She did not reply. On 6 November the applicant spent from 8.45 a.m. to approximately noon on the picket line distributing leaflets. After that she resumed her duties on a self-managed basis and finished work at 5 p.m. On 7 November she informed Dr. Wilson of her activities. There is no issue but that she was taking part in industrial action. Approximately 152 other members of staff had taken similar action. At first two of them had not suffered any deduction, but this mistake was subsequently rectified. Nothing turns on this. The sum of £63.99 was deducted from the applicant's salary, being one three hundred and sixty-fifth of her annual salary. She claimed that only one seven hundred and thirtieth, i.e. half a day, should have been deducted. She initiated the grievance procedure, but for some reason, which is not apparent, this was not dealt with appropriately. The applicant, who appeared on her own behalf before the industrial tribunal, submitted that the polytechnic was wrong in looking at the working day as indivisible and asked for a declaration to that effect. Alternatively, she submitted that the "proper" deduction would have been half a day's salary, i.e., £31.99. Before the industrial tribunal, counsel for the polytechnic argued that the only remedy open to the applicant was to sue in the county court as, by section 1(5)(e) of the Wages Act 1986, the provisions of section 1 of that Act did not apply. *395 An industrial tribunal sitting at Newcastle upon Tyne on 12 December 1991 under the chairmanship of Mr. Tavroges heard this matter and gave its unanimous decision that: "the complaint of the applicant that the [polytechnic] had made a deduction from her wages in contravention of section 1(1) of the Wages Act 1986 is to be further examined to determine whether or not the deduction was lawful and if so whether or not the amount of the deduction was incorrect." After the hearing the industrial tribunal became aware of Home Office v. Ayres  I.C.R. 175, which had only been decided on 11 October 1991. The reasoning of the tribunal at the end of its judgment is as follows: "After the hearing the tribunal became aware of the decision of the Employment Appeal Tribunal in Home Office v. Ayres on 11 October 1991 and briefly reported in  42 L.S.Gaz. 32. In the light of that decision the tribunal has decided that it has a duty to examine the lawfulness of the deduction in the instant case. The tribunal considers that the judgment of the Employment Appeal Tribunal, that the true intention of Parliament was best achieved by reading section 1(5)(a) of the Wages Act 1986 as if the word ' lawful' were inserted in the opening phrase 'to any deduction' and before the word 'reimbursement,' applies equally to section 1(5)(e) of the Wages Act 1986 and that, as the [polytechnic] in the instant case have relied on section 1(5)(e) of the Wages Act 1986 by way of a defence to the applicant's claim under section 1(1) of the Wages Act 1986, the applicant must be able to raise her argument that the deduction was in whole or in part contrary to the general law." The polytechnic appeal. The relevant provisions of the Wages Act 1986 are: "1. -- (1) An employer shall not make any deduction from any wages of any worker employed by him unless the deduction satisfies one of the following conditions, namely -- (a) it is required or authorised to be made by virtue of any statutory provision or any relevant provision of the worker's contract; or (b) the worker has previously signified in writing his agreement or consent to the making of it .... (5) Nothing in this section applies -- (a) to any deduction from a worker's wages made by his employer, or any payment received from a worker by his employer, where the purpose of the deduction or payment is the reimbursement of the employer in respect of -- (i) any overpayment of wages, or (ii) any overpayment in respect of expenses incurred by the worker in carrying out his employment, made (for any reason) by the employer to the worker; (b) to any deduction from a worker's wages made by his employer, or any payment received from a worker by his employer, in consequence of any disciplinary proceedings if those proceedings were held by virtue of any statutory provision; (c) to any deduction from a worker's wages made by his employer in pursuance of any requirement imposed on the employer by any *396 statutory provision to deduct and pay over to a public authority amounts determined by that authority as being due to it from the worker, if the deduction is made in accordance with the relevant determination of that authority; (d) to any deduction from a worker's wages made by his employer in pursuance of any arrangements which have been established -- (i) in accordance with any relevant provision of his contract to whose inclusion in the contract the worker has signified his agreement or consent in writing or, (ii) otherwise with the prior agreement or consent of the worker signified in writing, and under which the employer is to deduct and pay over to a third person amounts notified to the employer by that person as being due to him from the worker, if the deduction is made in accordance with the relevant notification by that person; (e) to any deduction from a worker's wages made by his employer, or any payment received from a worker by his employer, where the worker has taken part in a strike or other industrial action and the deduction is made, or the payment has been required, by the employer on account of the worker's having taken part in that strike or other action; or (f) to any deduction from a worker's wages made by his employer with his prior agreement or consent signified in writing, or any payment received from a worker by his employer, where the purpose of the deduction or payment is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of any amount by the worker to the employer." There is also a provision, in section 5(7), whereby any deductions illegally and wrongfully made are irrecoverable: "Where a tribunal has under subsection (4)(a) or (b) ordered an employer to pay or repay to a worker any amount in respect of a particular deduction or payment falling within subsection (1)(a) to (d) ('the relevant amount') the amount which the employer shall be entitled to recover (by whatever means) in respect of the matter in respect of which the deduction or payment was originally made or received shall be treated as reduced by the relevant amount." It is common ground that section 1(5) must be read as a whole. In Home Office v. Ayres  I.C.R. 175 we decided that the word "lawful" should be read into section 1(5)(a) before the word "deduction." If the reasoning in that case is to stand, then "lawful" must be read into each of the paragraphs (a) to (f) inclusive. In each of those paragraphs (a) to (f) the structure of the clause is a reference, first, to "any deduction from a worker's wages;" secondly, to some connecting words, for instance, "where the purpose of" or, "in consequence of" or "on account of;" and then, thirdly, what has been termed during submissions as the "trigger" or the operative words. Mr. White for the applicant submits that an industrial tribunal must be allowed to make some inquiry or test to satisfy itself that the deduction is linked to the "trigger", and that in the present case it could look to see whether the deduction of a whole day's pay was linked to the industrial action. The calculation of the amount is not in issue nor *397 that participation in industrial action took place. It would follow that if £31.99 only was deductible then the remainder of the sum making up the total of £63.99 was illegally deducted. Mr. Elias for the polytechnic submits, first, that paragraphs (b), (c), (d) and (f) all deal with third party issues and the amount in each case will be known. Thus, if an industrial tribunal were allowed to investigate the issue of the lawfulness of the amount, it might decide that there had been an error in the third party, for instance, an incorrect coding by the Inland Revenue. In that case, under section 5(7) of the Act of 1986, the additional sum would be irrecoverable by the employer from the employee. Thus, for instance, if under paragraph (d) an employer had deducted certain dues by way of "check off", which were subsequently found to have been excessive, the employer would be unable to recover that amount either from the employee or from the trade union. He submitted, therefore, that the word "lawful" could not properly be read into any of those clauses. Secondly, Mr. Elias submits that, although once the Act "bites" an industrial tribunal can in its investigation apply common law principles: see Fairfield Ltd. v. Skinner  I.C.R. 836, this case is to be distinguished in that the issue is whether the Act bites at all and not what an industrial tribunal is entitled to do after the proceedings before it are within the Act. In carrying out the various tests within section 1(5) the purpose is not to question the amount of the deduction but the cause of the deduction. It may be that once the Act "bites" the mischief is to ensure that the deduction is lawful, but section 1(5) is dealing with exceptions, and the issue is: does the industrial tribunal have any jurisdiction in this case? Thirdly, Mr. Elias submits that, if Parliament had intended to give industrial tribunals jurisdiction to investigate the issue involved, the word "lawful" could have been inserted and it was not. He submitted that, as we were construing an exception, it should be construed strictly and that we should not look for a purposive construction. He drew our attention to a passage in the speech of Lord Diplock in Jones v. Wrotham Park Settled Estates  A.C. 74, 105-106: "My Lords, I am not reluctant to adopt a purposive construction where to apply the literal meaning of the legislative language used would lead to results which would clearly defeat the purposes of the Act. But in doing so the task on which a court of justice is engaged remains one of construction; even where this involves reading into the Act words which are not expressly included in it. Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd.  A.C. 850 provides an instance of this; but in that case the three conditions that must be fulfilled in order to justify this course were satisfied. First, it was possible to determine from a consideration of the provisions of the Act read as a whole precisely what the mischief was that it was the purpose of the Act to remedy; secondly, it was apparent that the draftsman and Parliament had by inadvertence overlooked, and so omitted to deal with, an eventuality that required to be dealt with if the purpose of the Act was to be *398 achieved; and thirdly, it was possible to state with certainty what were the additional words that would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the Bill passed into law. Unless this third condition is fulfilled any attempt by a court of justice to repair the omission in the Act cannot be justified as an exercise of its jurisdiction to determine what is the meaning of a written law which Parliament has passed. Such an attempt crosses the boundary between construction and legislation. It becomes a usurpation of a function which under the constitution of this country is vested in the legislature to the exclusion of the courts." One of the problems, in cases such as the present, is for an applicant who may well be acting in person to know in which jurisdiction to bring a claim, whether in the county court or before an industrial tribunal. We have long since suggested that the jurisdiction should be co-ordinated and it may be that this is soon to take place as a result of amendments in the Trade Union Reform and Employment Rights Bill now before Parliament. However, until that Bill becomes an Act we must take the law as it exists. Our decision in Home Office v. Ayres  I.C.R. 175 was perhaps affected by an enthusiasm to save multiple litigation. Lastly, he submits that, if the wording of section 1(5) is not thought to be sufficiently clear on its face, and he submits that it is, then he relies on Pepper v. Hart  I.C.R. 291 and he placed before us excerpts from Hansard, which in his submission put the intention of Parliament beyond doubt. Before we are entitled to have regard to the contents of Hansard we must look to the advice given by the House of Lords in Pepper v. Hart. We refer only to the speech of Lord Browne- Wilkinson, at p. 317: "My Lords, I have come to the conclusion that, as a matter of law, there are sound reasons for making a limited modification to the existing rule (subject to strict safeguards) unless there are constitutional or practical reasons which outweigh them. In my judgment, subject to the questions of the privileges of the House of Commons, reference to Parliamentary material should be permitted as an aid to the construction of legislation which is ambiguous or obscure or the literal meaning of which leads to an absurdity. Even in such cases references in court to Parliamentary material should only be permitted where such material clearly discloses the mischief aimed at or the legislative intention lying behind the ambiguous or obscure words. In the case of statements made in Parliament, as at present advised, I cannot foresee that any statement other than the statement of the Minister or other promoter of the Bill is likely to meet these criteria." And he says, at p. 323: "I therefore reach the conclusion, subject to any question of Parliamentary privilege, that the exclusionary rule should be relaxed so as to permit reference to Parliamentary materials where (a) legislation is ambiguous or obscure, or leads to an absurdity; (b) the *399 material relied upon consists of one or more statements by a Minister or other promoter of the Bill together if necessary with such other Parliamentary material as is necessary to understand such statements and their effect; (c) the statements relied upon are clear." As can be understood from the submissions which have been made to us the construction of this legislation leaves the position somewhat obscure. If we are wrong and it is not obscure and section 1(5) must be read literally, then the appeal must succeed. However, in order to satisfy ourselves that this is the proper approach in the light of the reasoning which persuaded us in Home Office v. Ayres  I.C.R. 175, we feel this is an occasion where we should look at Hansard for guidance. It was not seriously argued to the contrary. Indeed, Mr. White asked us to look at a passage from the debate in the House of Lords. We have been referred to two passages from Hansard. The first is a report of Standing Committee K on 27 February 1986 when clause 1 was being debated. The relevant minister was the Parliamentary Under Secretary of State for Employment, Mr. David Trippier. The relevant passage is, Hansard (H.C. Debates), 27 February 1986, cols. 124-125: "Mr. Trippier: I ask the committee to accept the need for an amendment to clause 1(6). There is concern about the possible implications of the Bill for industrial tribunals. If a worker is involved in a go slow or similar industrial action where he stays at work but deliberately hampers production, the employer is often entitled to make a deduction from his wages. There may be an express term in the contract that allows for such an eventuality, but more often there is an implied term in the contract that the worker does not behave in that way. However, if the worker does behave in that way, his employer is not obliged to pay his wages in full. The worker can go to a civil court and argue that the employer is in breach of contract in making such a deduction. There have been a number of such cases, and where courts have disagreed with the employer's interpretation of the implied term, an award has been made to the worker. The amendment seeks to leave unchanged the situation relating to deductions made because of the worker's part in industrial action .... "Clause 1 will not apply to tax deductions. If the worker believes that a deduction is not contractually authorised, his means of redress is the civil court for breach of contract, rather than an industrial tribunal. Such contentious and difficult problems where, as the Committee knows, emotions occasionally run high are best dealt with by the courts, not industrial tribunals. Therefore, deductions made as a result of industrial action should be separated from those deductions about which a complaint may be made to an industrial tribunal. That would not alter the right of workers to claim back deductions not authorised by the contract, but the avenue of redress would be changed. Complaints of breach of *400 contract would be to the courts, not to a tribunal. I ask the Committee to support the amendment." The other passage is from the debate in the House of Lords on the Wages Bill on 24 June 1986, where the Minister for Employment, Lord Trefgarne, gives an indication to the same effect. We need only refer to two paragraphs from his speech, Hansard (H.L. Debates), 24 June 1986, col. 205: "Lord Trefgarne: Perhaps I may just swiftly explain the objective of clause 1(5)(e). If a worker is involved in industrial action, for example, in a go-slow or other similar action in which the worker stays at work but deliberately hampers production, the employer is often entitled to deduct something from his wages. There may be an express term in the contract that allows for that, but more often there will be an implied term in the contract that the worker does not behave in that way and that, if he does, the employer is not obliged to pay him his wages in full. The worker can of course go to the civil court and argue that the employer is in breach of the contract in making such a deduction. There are a number of cases where a worker has taken an employer to court and, in some instances, the courts have disagreed with the employer's interpretation of the implied term of the contract and have made an award to the worker." These passages clearly support the submissions placed before us by Mr. Elias. It follows from what we have said above that some of the reasoning of the appeal tribunal in Home Office v. Ayres  I.C.R. 175 can no longer stand. We allow the appeal and find that the industrial tribunal in the present case had no jurisdiction to hear the applicant's claim. Appeal allowed. Leave to appeal.