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Pay grades and contractual rights

Payslip iStock 000005826087XSmall 146x219Claire Booth reports on a Court of Appeal ruling on whether a council employee had a contractual right to be paid whatever salary was attached to a particular grade in all circumstances.

In Williams v Surrey Heath BC [2017] EWCA Civ 23 (CA) W was employed by the council as a revenue control officer. The council introduced a new pay structure in 1999 as part of a job evaluation scheme. W's job was found to have been over-valued and it was categorised as a lower grade, grade 8, in the pay structure.

The council therefore created a "personal grade" for her which reflected as closely as possible, and was no less favourable than, her current pay and she was placed in grade 9.37. She could move up that grade until she reached at least the maximum which she could have attained in her former position but could then rise no further. She reached that highest point, 9.38, in 2000.

In 2004 salary levels for higher grade posts were increased following a regarding exercise and salaries for posts at 9.38 were increased but W's salary did not increase. W retired in 2005 and her pension was calculated by reference to her 40 years' service and her final salary.

W contended that her ongoing pension payments were under-calculated as a consequence of the wrong final salary being adopted in the relevant calculations – she argued that her contractual right was to be paid whatever salary was allocated to 9.38 so when that sum was increased following the 2004 restructuring, she was entitled to it in the same way as any other employee on that grade. She submitted that by refusing to pay the increase to her, the council was in substance placing her on a completely new grade which was not found on the council's salary scales at all. She sought a declaration as to what her final salary ought to have been, and also claimed damages for breach of various contractual rights including loss of pay and pension. The issue was whether she had a contractual right to be paid whatever salary was attached to grade 9.38 in all circumstances.

The court held, dismissing her appeal, that there were in effect two different categories of officers on grade 9.38: those where the scale properly reflected the value of the job, and those where the scale did not reflect the value of the job but were personal grades conferred for protected pay reasons. Her placement in 9.38 was not because she held a grade 9 post, and the terms of her contract did not entitle her to benefit from pay increases which were intended only for officers whose posts were properly characterised as grade 9 posts. The council had honoured the terms of her contract.

Claire Booth is an Associate Professional Support Lawyer at Bevan Brittan. She can be contacted on 0370 194 1705 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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