Barts and the London NHS Trust v Verma

This case raises a short but very difficult point of construction of certain terms in the NHS Terms and Conditions of Service.

The background is as follows. The appellant is a doctor who specialises in oral and maxillo-facial surgery. She trained as a dentist in India but subsequently qualified as a doctor, and she has been in the United Kingdom since 1996. She worked in various training grade posts from March 1998 until August 2002 and then held a series of locum positions from September 2002 to September 2006.

In November 2006 she took a six-month appointment with the Luton & Dunstable NHS Foundation Trust (“the Trust”). In fact she did not complete the six months and left early in 2007, although nothing turns on that.

She was then offered a post as a “Foundation Year 1, Pre-Registration House Officer” (‘FY1PRHO’) with the appellant. This is a training post, typically taken up by newly qualified doctors, and it is paid accordingly. However, from time to time more senior doctors take such a post when they require further training for one reason or another. In the appellant’s case it was necessary for her to do this training to qualify for an appointment as a consultant in her field of expertise.

The standard NHS Terms and Conditions provide for pay protection in these circumstances. The effect in broad terms is that the trainee can retain the salary earned in the previous post even though it may be significantly more favourable than the salary stipulated for the training post itself. Dr Verma claimed that she was entitled to the benefit of the pay protection provisions and contended that their effect was to oblige the Trust to pay her the basic hourly rate she had formerly been paid in the Luton & Dunstable job for each hour that she worked in the new training post.

The Trust rejected that claim and she commenced proceedings alleging that there had been an unlawful deduction from her wages contrary to Part 2 of the Employment Rights Act 1996. An unlawful deduction includes a case where an employer fails to pay what he is contractually obliged to pay. Dr Verma also claimed a breach of the Equal Pay Act and sought an uplift of compensation on the grounds that the employers had failed to follow the statutory grievance procedures. She succeeded in part on these claims, but they are not relevant to this appeal. We are concerned only with the deduction of wages claim.

The principal relevant terms and conditions are paragraphs 132 and 135. Paragraph 132 describes the operation of the pay protection principle as follows:

“Where a practitioner takes an appointment in a lower grade which is recognised by the appropriate authority as being for the purpose of obtaining approved training (which may include training to enable the practitioner to follow a career in another specialty), the practitioner shall, while in the lower grade, continue to be paid on the incremental point the practitioner had reached in his or her previous appointment. Such a practitioner shall receive the benefit of any general pay awards. On reappointment to the higher grade or on appointment to another higher grade, the practitioner’s starting salary should be assessed as if the period spent in the approved training post had been continuing service in the previous higher grade. Practitioners whose previous appointment was in the Northern Ireland, Isle of Man or Channel Islands hospital service are eligible for protection of salary under the terms of this paragraph.”

Paragraph 135 is an interpretation provision which, so far as is relevant, is as follows:

“a.

the rate of salary for a part-time practitioner shall be taken to be the corresponding point in the salary scale, except for a practitioner employed as a part-time medical or dental officer under paragraphs 94 or 105, for whom it shall be the maximum amount appropriate to nine notional half-days…..

c.

the rate of salary in the previous post shall be taken to be the present rate of remuneration for such a post, whether or not this rate was in fact paid…”

The pay protection provided under paragraph 132 is linked to the pay in the previous appointment. The practitioner “continues to be paid…on the incremental point…reached in…her previous appointment.”

There are four features of Dr Verma’s previous appointment which it is relevant to note. First, the post was described as a “Trust grade doctor in oral surgery (hospital practitioner equivalent)”. It was not strictly a hospital practitioner grade post because Dr Verma was not qualified for that, but it was an equivalent post and it is accepted that it is a previous post for the purposes of the relevant paragraphs. Second, the pay identified on the incremental pay scale is not specified as an annual salary, as with most posts and grades, but is defined by reference to the pay received for working a session or notional half day. A session is equivalent to three and a half hours. Third, the maximum number of sessions for which the doctor can contract in this post (as with other hospital practitioner posts) is five per week. Finally, Dr Verma herself was in fact employed to do only two sessions per week.

The concept of pay protection is widely adopted in industrial relations in a range of circumstances. For example, it may apply where an employee takes a lower paid job following an industrial injury. He or she may continue to receive the salary referable to the former job. Another example is where the pay for certain jobs is reduced following a job evaluation scheme to ensure equal pay between men and women. It is generally thought to be unjust that workers whose jobs have been re-valued downwards should face a pay cut without having a period during which there can be a cushioning of the impact. So pay protection provisions are commonly adopted, and provided any differential in pay does not continue for too long, it is accepted that they may justify what would otherwise be unlawful indirect discrimination: see the Court of Appeal decision in Bainbridge v Redcar and Cleveland Borough Council [2008] EWCA Civ 885; [2008] IRLR 776.

Whenever there is a provision securing pay protection there will be issues such as whether it covers just the basic pay or extends to overtime rates or other supplements. These are matters which are dealt with by the particular pay protection arrangements in place. In this case we are concerned with pay protection in the context of training. One can readily see that it might discourage individuals from being willing to undertake training if they have to take a drop in income during the training period. That could be contrary to the interests of the Health Service itself, so pay protection ensures that there will be no prejudice to the employee who opts for a lower grade post as part of his or her wider training requirements. The question posed in this case is: precisely what income is protected?

The Employment Tribunal and the Employment Appeal Tribunal took different views about that. In the Employment Tribunal it was accepted that Dr Verma would be entitled to the same hourly rate of pay as she received in the Luton & Dunstable post. This involved translating the session pay into an hourly rate. However, the contention for the Trust, and accepted by the Employment Tribunal was that because the contract itself specified a maximum of five sessions per week, that should set the outer limit of the pay protection. The Tribunal therefore calculated the pay that Dr Verma would have received for five sessions, notwithstanding she was only working two sessions per week, and subtracted the salary she was actually receiving in the training post. The difference was the amount of the unlawful deduction.

Dr Verma appealed to the EAT. She contended that the Employment Tribunal had been wrong to limit protected pay to the five sessions. She alleged that she was entitled to protected pay with respect to the former hourly rate of pay, as the Tribunal had found, but she submitted that that rate should be paid for each of the forty hours that she actually worked in the new job.

It is to be noted that although the Trust contended before the ET that the protected pay should be limited to the salary which Dr Verma was actually receiving in the Luton & Dunstable post, i.e. it should be determined by reference to the fact that she was working two sessions, they did not pursue that argument before the EAT. Mr Welch, counsel for the Trust, submits that this is indeed where the logic of his argument takes him, although he does not wish to upset the Tribunal’s finding that the protected pay should relate to five and not just two sessions.

The EAT in its analysis placed considerable weight on the meaning of sub-paragraph (a) of paragraph 135 and concluded that it involved identifying an hourly rate of payment, rather than any particular amount. The EAT concluded that there was no legitimate basis for limiting the amount to the maximum that could have been earned in the previous post. Since the protected pay was determined by reference to the hourly rate of payment, it was irrelevant both how many hours she actually worked in the previous post or how many hours she would have been entitled to work. The only relevant question was how many hours she was working in the training post. The EAT observed that although the result of its analysis might seem surprising, it was not so odd once it was appreciated that many of those working as hospital practitioners are spending much of their time operating as independent general practitioners, and they will be giving up their GP earnings when carrying on training.

I have not found the interpretation of these provisions easy. Like the Employment Tribunal and the EAT, I think it highly unfortunate that there was no information about the background to the negotiations which established these terms, and in particular no evidence about what the parties assumed they were protecting in paragraph 132 with respect to part-timers. The background to the negotiations may have cast light on these somewhat cryptic terms. But we have to do the best we can with the materials provided to us.

Looking at paragraph 132 alone, and taking the case where a full time employee undertakes the training, the paragraph is consistent with the employee simply continuing to be paid precisely what he or she was paid in the previous job. The reference to continues to be paid on the incremental point suggests that nothing changes and that he or she simply remains entitled to the previous salary. The only qualification to that is that paragraph 135(c) provides that if the basic remuneration in the previous post was not in fact the rate as specified in the terms and conditions, that rate will be deemed to have been paid. Paragraph 132 also envisages that the employee will be treated in every way as though he or she remained in the previous post. Hence the employee receives any general pay increases made whilst he is in training:

“as if the period spent in the approved training post had been continuing service in the previous higher grade.”

There is nothing in the paragraph itself which suggests that the salary will vary with the hours worked in the previous post. In my view the natural construction is that the employee will continue to receive pay on the incremental point by which pay is determined for the previous job and will continue to receive that for the basic hours required to perform the training job. So even if, for example, the basic hours worked in the previous post were less than the basic hours worked during the period of training that would not lead to an increase in salary to cater for those extra hours. The purpose is to protect the salary previously received, not to increase it because there may on occasions be a marginal increase in the hours worked in the training post.

It is also, in my view, pertinent to note that paragraph 132 draws no distinction between full-time and part-time workers. It does not, for example, say that practitioners will be paid at least the salary they actually received in the previous post, nor does it suggest that a part-timer should be paid pro-rata by reference to the incremental point. Indeed, it does not appear to be envisaged that the pay in the previous post could be less than in the training post. It is not said, for example, that the practitioner will continue to receive the previous salary only to the extent that it is an improvement on the salary payable for the training post.

For these reasons, in my view, the natural reading of paragraph 132 is that the practitioner, whether full time or part-time, would in the training post have his or her pay determined by reference to the incremental point in the previous scale. Since the training post is full time for everyone, there is then no basis for limiting the payment merely because the practitioner in the previous job was undertaking a part-time post. An issue arises, however, as to whether that construction of paragraph 132 is affected by paragraph 135a.

Much of the argument before us involved the analysis of paragraph 135a. Counsel for both parties submit that it casts valuable light on the proper construction of paragraph 132 and in particular on the question to what extent the pay of part-time workers is protected. For reasons I develop below, I do not in fact think that it provides any significant help on that question and it does not alter the construction I have adopted focusing on paragraph 132 alone.

Three meanings of paragraph 135a were identified in the course of argument.

The first construction is supported by Mr Welch, counsel for the Trust. Logically, if correct this would in Dr Verma’s case restrict the protected pay to the sum received for working two sessions. Mr Welch asserts that this is indeed the case although curiously the Trust (not then represented by Mr Welch) conceded before the EAT, and again accepts before us, that the protection should extend to five sessions. I discuss below the potential rationale for that. The principal justification for this approach is that it best gives effect to what might have been thought to be the purpose behind paragraph 132. It can be said with some force that protecting pay normally means ensuring that an employee does not suffer economically whilst undertaking a lower paid post but does not mean that the employee should be better off than in the previous post. Accordingly, if a meaning can be given to the concept of “incremental point on the salary scale” which links it to the pay actually earned by the part-time worker in the previous job that would achieve the objective.

Whatever the policy merits of that approach, in my view there is no proper basis for construing the provision in that way. In my judgment the natural meaning of the “corresponding” point in the salary scale is that it refers to the appropriate pay grade for that particular employee in that post. In other words it is simply saying that the rate of pay for that post will be a particular sum per annum. The rate will be no different to that payable to full-timers (and indeed it would be likely to give rise to unlawful indirect sex discrimination if the rates of pay were different.) The pay actually received whilst the worker is working part-time will then be reduced proportionately to reflect that fact. But the rate of pay, as opposed to the pay itself, does not depend on the hours worked, and it is simply the rate of pay which sub-paragraph 135a is seeking to define.

In my judgment, this first construction confuses rate of pay with actual pay, and seeks to give the phrase “corresponding point on the salary scale” a wholly artificial meaning. It defines it in a way which identifies a whole series of new points on the scale defined by reference to the basic hours actually worked. I therefore reject this approach.

The second approach takes the words of paragraph 135a at face value. The corresponding point in the salary scale is simply the point identifying the pay grade for the particular post. It is, therefore, the same point as would apply to a full timer since there is no difference in their rates of pay. On this analysis, since full time and part-timers are on the same point in the salary scale, and since they are paid in accordance with that scale when carrying out the training post, it follows that they receive precisely the same pay protection. For the duration of the training course, whilst they are doing the same work, they will receive the same basic pay. This means that in fact the part-timers are being paid more than would be necessary to ensure that their income did not actually drop, and to that extent it might be said that they are benefiting from something more than strict pay protection requires. They are receiving the pay they would have received had they worked full-time in the previous job.

The third approach is favoured by Ms Monaghan QC, counsel for the claimant and reflects the analysis of the EAT. The submission is that paragraph 135a requires the rate of salary to be identified not by reference to an annual amount, as the pay scales in general do, but rather by reference to some smaller period of time, conventionally the hourly rate. As I have said, the significance of this analysis, if correct, is that if in fact a person’s hours are longer in training than they were in the previous job (which does apparently happen from time to time) then they will earn more when training than they did in the previous post. Furthermore, Ms Monaghan submits that this applies as much to full-time as any other workers so that it reflects back on the construction of paragraph 132 set out above. She seeks support for this analysis from the fact that a departmental Circular, which was drawn to our attention, appears to assume, from some of the examples given, that even full time employees who undertake training will have to be paid additional hours at their previous hourly rate if the forty hour training contract is longer than the basic hours they were obliged to work required under the previous contract.

In my judgment, there are a number of difficulties with this analysis. First, the reference to the rate of salary does not assist the argument because the statement of the annual salary itself defines a rate. Indeed, the document setting out the incremental points on the pay scales for the most part identifies the annual salary and is headed “basic rates of pay per annum.” The rate is fixed by reference to the year rather than the hour, but there is nothing in the paragraph to suggest that this is inappropriate. It cannot simply be assumed that rate of pay means hourly rate.

Second, the paragraph states that the rate will be the corresponding point on the scale, not that it will be derived from it. Yet Ms Monaghan accepts that on her construction these additional words, or some to like effect, would need to be implied into the language of the sub-paragraph.

Third, the exception stipulates that in the case of part-time medical or dental officers, the rate shall be the maximum amount appropriate to nine notional half days. So the concept of rate there plainly refers to the salary earned during the year, and the exception caps that sum for these two classes of part-time workers. Framing the exception in this way makes no sense if the rate is intended to be an hourly rate.

In my judgment, the second analysis best reflects the language and intent of the provisions. It does not, however, alter the conclusion that I have reached applying paragraph 132 above. The corresponding point in the salary scale, which identifies the incremental point for part-timers within the meaning of paragraph 132, determines how the salary in the training post is to be determined. The effect is that the part-time employee receives pay protection for the whole of the salary identified in the relevant incremental point. For the duration of the training at least, part-timers are treated in precisely the same way as full time workers in the same grade.

Whilst this goes beyond simply protecting employees from suffering a pay decrease whilst training, there is nothing intrinsically anomalous about the principle. Both full and part-time workers are working full time during the training contract itself and it is a perfectly cogent principle that they should for that period be paid the same, irrespective of their previous working hours.

Moreover, as Ms Monaghan points out, this approach would prevent potential indirect discrimination arguments arising which would be a distinct likelihood if predominantly female part-time employees were to receive less pay whilst training than the predominantly full-time males simply because in the immediate past they have undertaken part-time work.

On this analysis, therefore, in every case where the incremental point refers to an annual salary, it is simply a matter of identifying the appropriate point on the scale for the employee concerned and continuing to pay that salary throughout the training period as if the employee had worked full-time in the previous post. In none of these cases is it necessary to identify an hourly rate of pay for the purposes of translating one period of payment into another; nor is it necessary to vary the salary stipulated in the relevant grade to take account of any extra basic hours worked under the training contract.

An additional potential problem with respect to the appellant is that her pay is not identified by reference to an annual salary on the incremental scales. The relevant incremental point on the salary scale identifies the salary for her particular grade and post by reference to the pay for a session, which is three and a half hours. It could not conceivably have been the intention of the draftsman that the rate per session would constitute the amount which is subject to the principle of protected pay. Accordingly, some translation into a further sum, reflecting in some way an annual salary, is necessary.

The question is: how that salary is to be assessed? There are two possibilities. The first is to say that the full time equivalent could not be any salary greater than the maximum which could be earned in that post. This would justify the protected pay being capped at five sessions, which is what the Tribunal did. The alternative is to translate the hourly pay into a full time equivalent as though there was no cap on the maximum number of sessions which could be worked.

I see considerable force in policy terms of the first approach. There is something arguably counter intuitive in pay being protected at a level which the employee could never have earned. I also recognise that if the exercise is supposed to be one of identifying a whole time equivalent of Dr Verma, it might be said to be someone working the maximum hours open to a worker in that post.

I have two difficulties with this approach, however. First, there is nothing in paragraph 132, which sets out the protection principle, which gives any hint that the assessment of protected pay requires any focus on what a part-time worker could have earned if he or she had been employed full-time in the previous post. Second, paragraph 132a does exceptionally impose a cap on the maximum protected for certain categories of part-time worker, but the practitioner posts of the kind undertaken by Dr Verma do not fall within the exception. Paragraph 69 of the terms and conditions identifies a range of posts where the maximum remuneration is limited by virtue of the hours of work being restricted. However, paragraph 132a imposes the cap on rates of pay in relation to only two of those, namely certain part-time medical and dental officers. I do not think that it is legitimate to infer that the parties must have intended a cap to operate in the case of the other part-time categories also.

Moreover, although I recognise that the result goes further than the principle of protected pay might suggest would be required, it does not in my view begin to create a situation which is so perverse that it can fairly be said that this is not a construction which the parties could possibly have intended. As I have said, if my analysis of paragraph 135a is correct, part-timers in other posts not subject to a maximum cap on hours can receive the full-time equivalent salary whilst training. This is so however limited the number of hours they actually work. Those part-timers will be significantly better off than they were when working in their previous job. It is not obvious why the fact that part-timers like Dr Verma are subject to a limit on hours should be entitle them to less. Also there is every reason why the National Health Service may wish to encourage them to undertake the training by recognising that although their previous posts involved a limit on hours, the training post does not and requires them to work to the same hours as their colleagues.

For these reasons, in my judgment the appeal substantially fails. The session rates of the claimant have to be converted into a full time rate. However, I do not accept that this is 40 hours as submitted by Dr Verma. The full time hours are thirty eight and a half, or eleven sessions (that is the number found on Dr Verma’s pay slip). In my view, the proper construction of paragraph 135a requires the Trust to treat as the corresponding point on the salary scale the sum which would have been stipulated for a person in the General Practitioner job had he or she been allowed to perform the normal NHS basic hours of thirty eight and a half. That would require a modest recalculation of the sum which has been unlawfully deducted. It is a mathematical exercise which I am confident the parties would be able to sort out. However, since I am in a minority, and Rix and Rimer LJJ would limit the protected pay to the pay for five sessions only, it is not an exercise which needs to be undertaken.

I have had the advantage of reading the judgments of Elias and Rix LJJ in draft. I agree with Elias LJ that the question of construction raised by the NHS Terms and Conditions of Service is difficult. I am, however, with respect unable to agree with his solution to the question or with that of the EAT. Nor do I consider that the ET arrived at the correct answer but since the appellant, Barts & The London NHS Trust, sought neither before the EAT nor before us to challenge the ET’s solution, I would restore its judgment. I respectfully agree with Rix LJ’s very full reasons for allowing this appeal and express my own reasons more shortly in my own words as follows.

Paragraphs 1 and 2 of the applicable conditions are headed ‘Rates of Pay’. Paragraph 1a provides that ‘Practitioners shall be paid at the rates set out in Appendix 1’. Appendix 1 does no more than incorporate the ‘latest Advance Letter’, namely that stated to be available on a given website. The letter relevant for our purposes sets out the rates in a document headed ‘Annex A: Section 1: Basic rates of pay per annum, effective from 1 April 2006’. Annex A is a table in which the left hand column is headed ‘Grade’, below which are listed 12 grades of appointment (including, for example, consultant, registrar and specialist registrar). Against each grade there is then set out the ‘basic salary’ (meaning annual salary) for it according to the incremental point on the scale the employee has attained. Thus, for a consultant, the minimum basic salary is £57,944, following which there are four incremental points, rising from £62,161 (point 1) to £75,404 (point 4). For a registrar, the minimum basic salary is £28,930, following which there are four incremental points, rising from £30,395 (point 1) to £35,092 (point 6). For a specialist registrar, the minimum basic salary is £28,930, following which there are nine incremental points, rising from £30,395 (point 1) to £43,931 (point 9).

The feature of the table thus far described is that each of the 12 grades is one for which full-time appointment is available, although no doubt part-time employment may also be available. The full-time employee will earn the full basic annual salary at least at the minimum level or else at the level of the higher incremental point applicable to him. The part-time employee will receive a proportionate amount of such basic annual salary.

Dr Verma’s appointment as a ‘Trust grade doctor in oral surgery (Hospital Practitioner Equivalent) …’ by the Luton and Dunstable Hospital NHS Foundation Trust (‘the Trust’) did not fall within any of the 12 grades to which I have just referred. The grade applicable to her was the thirteenth (and last) in the left hand column of Appendix A. It is there described as ‘Hospital practitioner/session’. The adjoining row then shows a minimum salary of £4,218 followed by six increasing incremental points, point 1 being £4,462 and point 6 being £5,683. A ‘session’ for this purpose is 3.5 hours. The way that row 13 works is that each of the seven rising figures is, according to which one applies to the particular practitioner, the basic annual figure for each session per week worked by the practitioner. The incremental point at which Dr Verma was placed was point 6 and so she was employed at the annual rate of £5,683 per weekly session worked. She was in fact appointed for just two sessions a week (seven hours), or £11,366 a year. The maximum number of sessions per week for which she could have been (but was not) appointed at such grade was five sessions (17.5 hours), or £28,415 per year. That was the maximum salary it was possible for her to earn per year at the ‘hospital practitioner’ grade to which the Trust appointed her.

It is at this point worth standing back and considering the nature of that part of Dr Verma’s claim before the ET with which we are concerned. Her appointment by the Trust as a ‘two session’ Trust grade doctor entitled her to annual pay of £11,366. Had she chosen to work the maximum of five sessions for which the conditions permitted her to be appointed, she could still only have earned maximum annual pay of £28,415. She was not, however, so appointed. Her subsequent appointment by the appellant as what Elias LJ has called a FY1PRHO was at an annual salary of £23,762 (she had in fact originally been paid less than that, having been wrongly placed at the bottom point of the grade, but the appellant later accepted that should have been placed at third incremental point and that £23,762 was the applicable salary. Nothing turns on the error in that respect). Her point before the ET was, however, that she was entitled to pay protection under the conditions. That was because her appointment by the appellant was ‘for the purpose of obtaining approved training’ within the meaning of condition 132; and that condition 132 entitled her ‘while in the lower grade [as a FY1PRHO], [to] continue to be paid on the incremental point [she] had reached in … her previous appointment [by the Trust] …’.

It is not in dispute that the training appointment was in a lower grade than Dr Verma’s prior appointment with the Trust. Nor, therefore, is it in principle in dispute that the pay protection provisions applied to Dr Verma whilst in her training post. Her case before the ET was that, for the purposes of condition 132, the incremental point she had reached as a Trust grade doctor was pay at the annual level of £65,931; and that, therefore, was the level of salary to which she was entitled whilst performing the training contract with the appellant. Given the figures summarised in the previous paragraph, such a claim appears to me to be a startling one. How, it might be asked, could it be justified? The answer is that it is said that as she worked a 40-hour week in the training post, she should be rewarded for each hour in the training job at no less than the same hourly rate at which she was paid as a Trust grade doctor. That was not straightforward arithmetically. Eleven (impermissible) weekly sessions with of the Trust grade job would still be the equivalent of only a 38.5 hour week and so her case was that the sessional figure had to be reduced to an hourly rate and then multiplied to produce an annual salary entitlement appropriate to a 40-hour week. That exercise produced an annual figure of £65,931, the figure at which she claimed to be entitled to protection.

The ET rejected that argument and favoured the view that the protection to which Dr Verma was entitled was pay at the top level of her Trust grade doctor post, namely the annual pay for the maximum of five sessions (or 17.5 hours) a week, which was £28,415, although the ET concluded that the relevant figure was in fact £28,845. A remedy hearing was, if it should be necessary, directed to determine what if any underpayment of salary the appellant had made. The EAT accepted the correctness of Dr Verma’s argument and allowed her appeal accordingly.

I respectfully disagree with the EAT’s conclusion. In the circumstances that I have related, the notion that Dr Verma should be entitled to pay protection at a salary level which she did not earn and could not have earned in her post as a Trust grade doctor is counter-intuitive. I consider that it finds no support in the conditions.

Of some relevance to the question raised by this case is what the conditions mean in their reference to the ‘rate’ or ‘rates’ of pay. The word ‘rates’ is used in condition 1a, which provides that ‘Practitioners shall be paid at the rates set out in Appendix 1’. Neither ‘rate’ nor ‘rates’ is, however, used in condition 132 although ‘rate’ is then used five times in condition 135. I shall set out conditions 132 and 135, which are central to the argument, in full:

“PROTECTION

132.

Where a practitioner takes an appointment in a lower grade which is recognised by the appropriate authority as being for the purpose of obtaining approved training (which may include training to enable the practitioner to follow a career in another specialty), the practitioner shall, while in the lower grade, continue to be paid on the incremental point the practitioner had reached in his or her previous appointment. Such a practitioner shall receive the benefit of any general pay awards. On appointment to the higher grade or on appointment to another higher grade, the practitioner’s starting salary should be assessed as if the period spent in the approved training post had been continuing service in the previous higher grade. Practitioners whose previous appointment was in the Northern Ireland, Isle of Man or Channel Islands hospitals ser eligible for protection of salary under the terms of this paragraph. …

INTERPRETATION

135.

For the purposes of paragraphs 121 to 134:

a.

the rate of salary for a part-time practitioner shall be taken to be the corresponding point in the salary scale, except for a practitioner employed as a part-time medical or dental officer under paragraphs 94 or 105, for whom it shall be the maximum amount appropriate to nine notional half-days.

b.

service in a part-time or honorary appointment shall count in exactly the same way as service in a whole-time appointment;

c.

the rate of salary in the previous post shall be taken to be the present rate of remuneration for such a post, whether or not this rate was in fact paid;

d.

the rate of salary in the previous post of a practitioner shall be inclusive of any allowance paid for acting as Medical Superintendent and of the allowance to SHMOs or SHDOs occupying posts graded as consultants. It shall exclude London Weighting, extra duty allowance, or other fees payable by the health authority or allowances for junior doctors in peripheral hospitals.”

Taking condition 135 first, as Rix LJ has observed, it is not an interpretation provision applicable only to condition 132: it applies for the purposes of the interpretation of all of conditions 121 to 134, and he has summarised the areas they cover. Although we had considerable argument directed to condition 135, I regard it as of little assistance in the interpretation of condition 132. In providing, as condition 135(a) does, that ‘the rate of salary for a part-time practitioner shall be taken to be the corresponding point in the salary scale, …’, I cannot see that it is doing more than making express that which would anyway seem obvious, namely that the part-timer’s salary shall be an appropriate proportion of the incremental point salary scale applicable to his post. It cannot sensibly be read as meaning that a part-time practitioner to a particular post on, say, incremental point 4 is entitled to be paid the same amount as a full-time practitioner on the same incremental point. Whatever the reason for the exception to condition 135(a), it does not apply to Dr Verma’s case, nor does it qualify the ordinary sense of its primary provision. Condition 135(b) appears to me to be of no present materiality. Condition 135(c) is, I consider, of some relevance to the interpretation of condition 132 but shows no more than that, having identified the relevant ‘incremental point’ there referred to, the pay protection is at the level of the current rate for that incremental point even if that rate was not what had been paid to the practitioner. That is anyway also apparent from condition 132. Condition 132(d) does not in my view shed any relevant light on the question.

As it seems to me, therefore, condition 135 assists little in the determination of the issue before us. In my view that issue turns upon the interpretation of condition 132, which says nothing about a ‘rate’ or ‘rates’ of pay by reference to which the prescribed pay protection is to be fixed. All that it explains for present purposes is that a practitioner to whom it applies ‘… shall, while in the lower grade, continue to be paid on the incremental point the practitioner had reached in his or her previous appointment. Such practitioner shall receive the benefit of any general pay awards.’ That fixes the practitioner’s protected pay by reference to the current level of pay under the incremental point he had reached in his previous appointment. In the case of a practitioner who was, say, previously a full-time registrar on incremental point 4, that is the level (plus subsequent pay awards) at which, whilst he is in the lower grade, his pay will be protected. In the case of a practitioner who was previously a part-time registrar who was paid, by reference to incremental point 4, a proportion of the annual salary of a full-time registrar also on point 4, I can see nothing in condition 132 that entitles him, whilst in the lower grade, to enjoy pay protection at other than the same level (plus proportionate subsequent pay awards). In particular, I can see nothing in condition 132 that would entitle him to pay protection at the level of a full-time registrar on point 4. That not only appears to me to make no sense, it sits uneasily with the fact that all that condition 132 entitles him to is a right to ‘continue to be paid’ on the incremental point he had reached in the prior post. The word ‘continue’ in that context is not necessarily conclusive on the point, but it would seem to me that its more natural interpretation in the context is that it is referring to a continuation of that which the practitioner had previously enjoyed. It is therefore pointing against any notion that he will overnight become entitled to an immediate hike in his former pay and receive a level of remuneration that he had not previously earned. That result could only be achieved if condition 132 is interpreted as concealing within it an unspoken scheme by which the required task is to identify the hourly rate at which the practitioner was formerly paid and then to apply that hourly rate to the hours worked in the lower grade. There is, however, nothing in condition 132 or anywhere else in the conditions that says or suggests that this is the scheme. If it were the intended scheme, it appears to me that it would call for express explanation. I also see no basis for implying any such scheme into condition 132.

Dr Verma’s position is different from the registrar examples just given because, in her Trust grade appointment, she could not work full-time or part-time in any comparable sense; she could only work on a sessional basis, doing a maximum of five sessions, or 17.5 hours, a week. Since I would reject the notion that condition 132 requires, for pay protection purposes, the conversion of the practitioner’s former pay (whether full-time or part-time) to an hourly rate which is then multiplied by the hours worked in the lower grade, the different nature of the basis upon which she was engaged appears to me, however, to make no difference. The only question is how her pay protection was to be calculated. Condition 132 tells us that she was entitled to ‘continue to be paid on the incremental point [she] had reached …’. She had reached incremental point 6. Reference to Appendix A reveals merely the figure of £5,683, which is the point 6 annual rate for a single weekly session. It can make no sense to limit her to pay protection at that level, because she was working two sessions a week. Nor in my view is there any justification for the ET’s view that the relevant pay protection was at the maximum level she could have earned, namely five sessions a week, which at point 6 would yield £28,415. The scheme of condition 132 is, in my view, to give practitioners pay protection (with subsequent pay awards) at the level they were previously enjoying. In Dr Verma’s case that was pay protection at the level of two sessions a week, or £11,366. That, in my judgment, is what the ET ought to have held. That was in fact the appellant’s original, unsuccessful argument before the ET, although it did not seek to advance it before the EAT and it expressly disclaimed it before us. It follows from that concession that, if, as I consider, the appeal should be allowed and the order of the EAT set aside, this court should simply restore the judgment of the ET. That is what I would order.

The difficulty of the issue of construction in this case is demonstrated by the unfortunate fact that the ET, the EAT and this court itself have arrived at different solutions to it. I am grateful to Lord Justice Elias for setting out the factual and background material and describing the rationale of pay protection. I need not repeat any of that, save for the critical provisions of the NHS Terms and Conditions (the “NHS terms”). I regret to conclude, however, that I do not agree with his solution.

The issue before us, as before the specialist tribunals below, is created by the special facts that (i) Dr Verma’s previous post could not provide employment or pay for more than five sessions (of 3.5 hours each) per week; (ii) Dr Verma had been working in that post for no more than two such sessions per week; and (iii) in her new training post with the Trust she was now working for 40 hours per week. She seeks to receive pay protection for that 40 hour week. The Trust argued before the ET that pay protection should be limited to two sessions (7 hours) per week. The ET awarded her pay protection for five sessions (17.5 hours) per week. The EAT awarded her pay protection for 40 hours, as she had sought. Before the EAT, the Trust did not seek to upset a financial award based on pay protection for 5 sessions per week, although the logic of its submissions, as advanced again before this court, was consonant with the position that pay protection was limited to two sessions only.

The ET (which had many other issues to contend with) dealt with the issue of pay protection relatively briefly. It said:

“86.

The terms and conditions of service provide that hospital practitioner posts are for a maximum of five sessions per week. The maximum salary, therefore, for an individual on the top incremental point of a hospital practitioner post, as the Claimant was at Luton and Dunstable, was, therefore, five times the sessional rate. This amounted to £28,415.

87.

We do not accept, therefore, Mr Kemp’s argument that the Claimant was entitled to pay protection on what she would have obtained if she had worked 11 sessions per week. The terms and conditions stipulate a maximum of five sessions per week and this is the figure to which she was entitled to pay protection under the contractual provisions in force.”

The EAT’s judgment was more complex. It proceeded on the basis that “a part-time practitioner who moves to a full-time training post in a lower grade is entitled to protected pay at the full-time equivalent of his or her previous pay” (at para 23). However, it ignored the fact that the maximum amount which Dr Verma could have earned in her previous post was for five sessions and scaled up that maximum by finding an hourly rate payable for those five sessions and then pro-rating that salary upwards upon the assumption that Dr Verma had worked a standard 38.5 hours (the typical number of hours, or eleven sessions, on which the salary of NHS posts, other than training posts, carrying full-time earning potential was based). Hence the reference in the ET judgment to Dr Verma’s claim being based on “11 sessions per week”. It was the EAT’s view that what was protected under paragraph 132 was the “rate of salary” in the previous post (see the opening words of the explanatory paragraph 135(a)) rather than the actual amount previously earned or capable of being earned. Thus the EAT’s judgment argued as follows:

“If the general approach of the pay protection provisions is, as we have held, that a practitioner should receive in her training post protection at the rate that she received in her previous appointment, irrespective of the actual hours worked, it seems to us immaterial that the reason why she did not work full-time in the previous post is that the terms and conditions did not permit it” (at para 25).

The EAT derived support for that conclusion from the fact that in paragraph 135(a) of the NHS terms the exception provided for certain part-time posts, for which the test would not be “the rate of salary” but “the maximum amount appropriate to nine notional half-days”, did not embrace the post with which we are here concerned in Dr Verma’s case. “The only legitimate conclusion from the fact that Hospital Practitioners are not included in the classes covered by the words of exception is that the general rule is intended to apply to them” (para 26).

The EAT then applied the hourly rate so derived to the number of hours performed by Dr Verma in her new training role, namely 40 hours. (Some material put before us suggested that a training role could have involved not 40 hours a week, but 48 hours. If that had applied to Dr Verma, then on the EAT’s approach, her pay protection would have risen by a further 20% or roughly £13,600).

The EAT accepted that its conclusion “may at first sight seem surprising” (at para 28), first because this level of pay protection resulted from working only two sessions a week in Dr Verma’s previous post, and secondly because the level of protected pay was almost three times that received by an ordinary trainee or “Foundation Year 1 Pre-Registration House Officer (or “FY1PRHO”). I would agree that the EAT’s conclusion does seem surprising, but not so much for the reasons it gave, but rather because it would seem irrational and contrary to the whole policy and purpose of a protected pay regime that a recipient of such pay should obtain far more than he or she had in fact earned in their previous role or could ever earn. That rationale is acknowledged by Elias LJ at paragraph 24 above.

In my judgment, this irrationality requires us to consider with great care whether the relevant provisions do in fact demand the result arrived at by the EAT. I am not persuaded that they do.

I begin with paragraph 132 of the NHS terms, which is headed “PROTECTION” and thus provides the basic framework for protected pay as follows (I have interpolated numerals to enable me to number and identify the clauses of this paragraph, but these numerals do not appear in the original):

“132, (i) Where a practitioner takes an appointment in a lower grade which is recognised by the appropriate authority as being for the purpose of obtaining approved training (which may include training to enable the practitioner to follow a career in another specialty), (ii) the practitioner shall, while in the lower grade, continue to be paid on the incremental point the practitioner had reached in his or her previous appointment. (iii) Such a practitioner shall receive the benefit of any general pay awards. (iv) On reappointment to the higher grade or on appointment to another higher grade, the practitioner’s starting salary should be assessed as if the period spent in the approved training post had been continuing service in the previous higher grade…”

The critical words are to be found in clause (ii) and are “shall…continue to be paid on the incremental point…reached in his or her previous appointment”. Clause (i) merely sets up the situation for the protected pay regime, which it is common ground applies to Dr Verma. Clause (iii) merely emphasises that the benefit of ongoing pay awards applies. Clause (iv) is of interest because it provides for continuity into the period beyond training, and emphasises that the practitioner’s “starting salary” shall be on the basis that the practitioner had never left his or her higher grade post.

What is “the incremental point” referred to in clause (ii)? It is to be found in a so-called “Annex A” headed “Section 1: Basic rates of pay per annum”, incorporated in Dr Verma’s conditions of employment and forming part of the NHS terms. This annex sets out annual rates of pay for various grades, which, for any particular grade, rise in accordance with a point system, numbered “min” (minimum) and then 1 to 13 (although not every grade rises to any particular number within that spread of 1 to 13). These figures are not hourly figures, but annual amounts, plainly on the basis of full-time working. Only in one case, however, are the salary figures not full-time annual salaries, and that is in the grade relevant to Dr Verma and this appeal, the grade of “Hospital practitioner”, and in that case the salary is given on a per session annual basis. Thus a hospital practitioner who performs one session on an annual basis receives from £4218 (minimum) to a maximum on point 6 of £5,683 per session. (Those figures are the relevant figures effective 1 April 2006.)

It is to my mind difficult to the point of impossibility to construe paragraph 132 as referring to hourly rates of pay, as the EAT reasoned. Hourly rates are not referred to.

The word “continue” in clause (ii) and the concept of unbroken continuity embedded in clause (iv) emphasise in my view that what continues is what has been and will be the relevant salary rate, which in our case is a rate per session.

The question then arises, and it is the question which lies at the heart of this appeal: What happens if the practitioner who is entitled to protected pay under the provisions of paragraph 132 has been working on a part-time rather than a full-time basis? Paragraph 132 itself throws no light on this, other than to suggest that, outside the instant case of the grade of hospital practitioner, a practitioner’s salary is known by its annual amount (which of course assumes that the practitioner works full-time on an annual basis); and that, in the case of the hospital practitioner, a practitioner’s salary is known on an annualised per session basis. That, however, makes no assumption about the number of sessions that such a hospital practitioner works. We know that in the case of Dr Verma’s former role, she could not perform more than five sessions a week (paragraph 6(d) of the NHS terms) and in fact performed two sessions per week. We do not know why the grade of the hospital practitioner is dealt with in this special way in Annex A. Generally speaking, however, we are perfectly familiar with a person’s salary being known on an annual basis. That is not to say, of course, that that is the amount that an employee will receive in any twelve month period. That will depend on whether the employee is working full-time or part-time, and may also be affected by a number of special arrangements, such as various allowances (or, possibly, overtime). In such circumstances, just as the annual income of an employee in the grade of hospital practitioner will depend ultimately on the number of sessions he or she will work throughout the year, so the annual income of an employee in any of the other grades will depend on whether he or she works full-time or part-time. Thus it is reasonable to assume that the salary would be adjusted, in the cases where an annual salary is identified, by reference to both the annual salary in question (ie the rate for the job) and the amount of part-time work undertaken, and, in the case of the hospital practitioner, by reference to the number of sessions which are performed in that role, where it is the rate for the session, rather than the rate for the year, which is definitive of the rate for the job.

I now come to paragraph 135, which is headed “INTERPRETATION” and provides as follows:

“135.

For the purposes of paragraphs 121 to 134:”

a.

the rate of salary for a part-time practitioner shall be taken to be the corresponding point in the salary scale, except for a practitioner employed as a part-time medical or dental officer under paragraphs 94 or 105, for whom it shall be the maximum amount appropriate to nine notional half-days.

b.

service in a part-time or honorary appointment shall count in exactly the same way as service in a whole-time appointment;

c.

the rate of salary in the previous post shall be taken to be the present rate of remuneration for such a post, whether or not this rate was in fact paid;

d.

the rate of salary in the post of a practitioner shall be inclusive of any allowance paid for acting as Medical Superintendent and of the allowance to SMHOs or SHDOs occupying posts graded as consultants. It shall exclude London Weighting, extra day allowance, or other fees payable by the health authority or allowances for junior doctors in peripheral hospitals…”

It is in my judgment important to recall that this interpretation section has to do duty not merely for paragraph 132, but for the whole of paragraphs 121 to 134 of the NHS Terms. Thus paragraph 121 is concerned with “Starting Salaries and Incremental Dates”; paragraphs 122 to 125 deal with “Counting of Previous Service”; paragraphs 126 to 131 regulate “Increments on First Appointment to a Grade”; paragraph 133 deals with “Promotion Increase”; and paragraph 134 deals with “Hard to fill Consultant Posts”. Paragraph 135, which is not specifically referred to in paragraph 132, has to do duty for all these paragraphs, and not merely paragraph 132.

In these circumstances, it is in my judgment highly unlikely that any of the language of paragraph 135 will provide that a person performing work in any of the specified grades in Annex A will, if working only part-time, have his or pay protected as if he or she was working full-time. But it is the essential burden of Dr Verma’s submission that that unlikely construction is just what paragraph 135 achieves. It remains to be seen if the language of paragraph 135 drives one to accept that submission. (I note, however, that Elias LJ seeks to find his solution of pay protection essentially in paragraph 132, and finds no significant help in paragraph 135: see paras 21/22 above).

Paragraph 135(a) states as its essential message that “the rate of salary for a part-time practitioner shall be taken to be the corresponding point in the salary scale” (and there then follows an exception). This then is a general principle (going well beyond the context of pay protection) concerned with part-time employment. In my judgment it can only mean that a part-time employee is paid at the same rate as a full-time employee (at any corresponding point in the salary scale). It cannot of course mean that a part-time employee gets the same amount in a year as a full-time employee. Thus an employee who works half-time will receive half of the salary at the corresponding point as a full-time employee. This is a principle that an employee in any grade at any point in the scale on that grade is paid pro rata for the work that he or she does, ie pro rata to what Annex A calls the “basic rates of pay per annum”.

How that principle is worked out in practice is not divulged and would not affect any matter of construction of the paragraph. Thus it could in practice be worked out on a monthly, weekly, daily, hourly or sessional basis. The principle is, however, simply that you get paid for the amount of work you are employed to work at the rate for the job you are employed to do, whether you work full-time or part-time.

Paragraph 135(a) then goes on to deal with an exception defined as “a practitioner employed as a part-time medical or dental officer under paragraphs 94 or 105”. For such part-time practitioners the “rate of salary…shall be the maximum amount appropriate to nine notional half-days”. Nine notional half-days (query if such half-days are the same as “sessions”, but I think they are, see, for instance, para 6 of the NHS terms) cannot be very far removed from a five day week. That maximum amount is the rate. Plainly, however, if a particular practitioner only performs less than nine such half-days, he or she is paid only for what he or she does, but at the rate defined. Thus one half-day will be paid at one-ninth the rate of the maximum. It is as unbelievable that a practitioner who only works one half day earns as much as a practitioner who works nine half-days, as it is that in the ordinary, unexceptional, case an employee who works only part-time earns as much as an employee who works full-time a whole year round.

It is argued that this exception supports the EAT’s conclusion (or that of Elias LJ) on the ground that it does not apply to the role of hospital practitioner. Therefore it is argued that the appropriate maximum of five sessions cannot provide the amount to be provided under the protected pay regime. This is to make use of the maxim that the expression of one example excludes another (expressio unius exclusio alterius). Quite apart, however, from the fact that a maxim of this kind could in my judgment not easily subvert the dominant rationality of the purpose of a general provision, there is above all the matter that the exception does not as it seems to me detract from the principle of the general proposition with which the sentence begins, even if it differs as a matter of detail.

I confess that I do not know why an exception is made for the “part-time medical or dental officer under paragraphs 94 or 105”, either for that appointment’s own sake, or for a reason which does not embrace the grade of hospital practitioner specified in Annex A. Nor has the matter been explained to us. It may be that the excepted officer is not scheduled in Annex A and therefore some special provision must be made. Be that as it may be however, paragraph 69(a)(ii) refers to a maximum remuneration for part-time appointments of “nine notional half-days” for “practitioners in the grades of consultant, AS, SHMO and SHDO, and for practitioners holding appointments under paragraphs 94 and 105 who also provide medical or dental services under Part II of the National Health Service Act 1977” (emphasis added). It is only in the emphasised cases that the paragraph 135(a) exception applies. Paragraph 94, headed “Part-time medical officers”, provides:

“a.

In convalescent homes, general practitioner maternity hospitals where no other rate is appropriate, including general practitioner hospital units in respect of work not covered by payments into the staff fund, payment shall be made at the rates set out in Appendix I for each weekly notional half-day or less a year, the notional half days being assessed as in paragraph 61.

b.

Where a practitioner holds appointments under this paragraph with more than one authority or holds one or more appointments under this paragraph and one or more appointments under paragraph 61, the practitioner’s remuneration in respect of each appointment shall be calculated in accordance with the methods set out in paragraphs 71 to 75.”

Paragraph 105 is to the same effect in the case of “part-time general dental practitioner appointments” and refers back to paragraph 94.

The case in point appears to be a special one and it is governed by complex provisions, and I would therefore in general be unwilling to derive any inference from them for the purposes of the exercise of construction in which we are engaged. However, I note from paragraph 94(b) that it is possible to hold several, or at least more than one, such part-time appointments at one and the same time. It is possibly for this reason that a special provision is needed in paragraph 135(a) to emphasise that the rate referable to such appointments is governed by the maximum of nine notional half-days.

I pass to paragraph 135(b). That merely emphasises that for all the purposes covered by paragraphs 121 to 134 part-time service and whole-time service shall count in exactly the same way. This plainly does not mean that a part-time employee earns as much as a full-time employee of the same grade or rank.

Paragraphs 135(c) and (d) return to the concept of “rate of salary”. The former emphasises that the current rate applies, whether or not in fact paid (something already anticipated in paragraph 135’s clause (iii)); and the latter defines what the rate includes and excludes. Neither as it seems to me throws any further light on the issue before us.

In sum, there is in my judgment nothing in paragraphs 132 or 135 to supersede or undermine the natural, rational and purposive interpretation of these provisions relating to protected pay as protecting the practitioner for the pay in a previous role which he or she earned, at the rate to which he or she was entitled to (ie either the rate earned or, where that rate has been improved under current awards, at the current rate), and not as extending their pay to a figure possibly far in excess of any figure previously earned. It is simply counter-intuitive to suppose that the less a part-time practitioner worked in a previous post, the more he or she is “protected” in a training post. It seems to me to be barely if at all relevant that the training post may be full-time (a matter no where touched upon in paragraph 132 or elsewhere) whereas the practitioner may have worked in his or her previous post only part-time. The balance of their time will have either been spent perhaps in some other earning role within the NHS (and how would that be reflected in Dr Verma’s scheme of things?) or, as I believe in Dr Verma’s case, by medical work outside the NHS, or in greater leisure or private pursuits. I acknowledge that, if an employer wants to encourage its employees to enhance their training, there is in theory no limit to the inducements which it could put in their way to achieve its purpose: nevertheless, I cannot conceive that it would be realistic to suppose that an employer, and perhaps especially a public employer, would wish to pay an enhanced “protection” to an employee who had performed only minimal part-time work for it in the past, on the basis that the employee’s private earnings or private leisure needed to be compensated by “protection” of merely theoretical, but not actual, earnings in that employer’s service.

If, therefore, the appellant Trust had not conceded a willingness to pay Dr Verma protected pay at the maximum possible rate of five sessions per week, I would have concluded that Dr Verma was entitled to protection at the rate on the appropriate scale on Annex A for only two sessions per week. As it is, Mr David Welch, on behalf of the Trust, made it clear that the Trust did not seek to go behind the concession which it had made before the EAT. It made that concession, not because of the logic of its argument, but because the ET had made its award on the five-session basis and the Trust did not seek to appeal that award. However, it would be an error to suppose that that entirely pragmatic approach to this litigation undermined the Trust’s argument. In this respect it seems to me that the EAT misled itself, when it sought to derive, not from any express concession of principle, but from an inference which it purported to draw from what was in truth the Trust’s pragmatism. Thus at para 18 of its judgment the EAT said:

“The case before us, reflecting the decision of the Tribunal, was that the Appellant was entitled, but entitled only, to protected pay for the equivalent of five sessions. That necessarily involves, though we are not sure that this was fully appreciated, at least a limited acceptance that what is protected is the rate of pay. The Trust’s case is, in truth, that the Appellant is entitled to be paid at the rate derived from the two sessions which she in fact worked but subject to a cap on account of the maximum prescribed by para. 6(d).”

But, for the reasons which I have sought to explain above, reference to “rate” advances Dr Verma’s argument not a bit.

I would therefore allow the Trust’s appeal and restore the ET’s award. In the light of the judgment of Lord Justice Rimer, with which I agree, it follows that the Trust’s appeal is allowed and the ET’s award restored.