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Grievance outcome letter could bind employer to higher pay

When Sheffield City Council employees lodged a grievance about pay, the Council appointed an HR consultant from its equal pay team to investigate. Her grievance outcome letter informed the employees that they had been placed on a higher grading, which would result in a pay increase. When the pay increase didn’t materialise, the employees raised tribunal claims.

The Employment Appeal Tribunal found that, even though the HR consultant had no authority to make decisions about pay, she was authorised to communicate the grievance outcome on behalf of the employer. The effect of the letter was as if the employer had personally and directly told the employees of a pay rise.

Further, for the offer of higher pay to be binding, there was no need for the employees to ‘formally’ accept it. If employees are notified that they are to receive an additional benefit, such as a pay rise, with no apparent downside, they will usually be taken to have accepted the new terms simply by continuing to work (although in cases where a pay rise is linked to a new role or greater responsibilities something more will be required).

The employees were, therefore, contractually entitled to the higher rate of pay, unless the Council could show that there was a mistake in the grievance outcome letter which the employees recognised or ought to have recognised. The case has been returned to the employment tribunal to determine whether such a mistake was made.

(Hershaw and others v Sheffield City Council).

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