Employer Bound by External HR consultant’s mistake

February 12, 2015

When difficult employment issues arise many employers turn to external HR consultants, providers or specialists for assistance. In Hershaw and Others v Sheffield City Council 2014 the employers left the resolution of a particular issue entirely up to the external HR consultants.

Facts

Twelve marked patrol officers, who were employed by Sheffield City Council (SCC) had been put through a pay and grading review. However on its conclusion, they were not notified of the outcome. As a result, they raised a collective grievance which SCC handed to Ms Wadsworth a HR consultant. Although she wasn’t permitted to determine the employees’ grades and pay levels herself, SCC had authorised W to ‘resolve the matter’ on its behalf.

A serious error

When Ms Wadsworth wrote to the twelve employees she erroneously told them all that they had been placed on Grade 5 and were, therefore, entitled to receive a grade 5 salary. The twelve employees continued working under the belief they had received a pay rise. On realising Ms Wadsworth’s mistake, SCC told the employees that the previous information was an ‘error’ but revised their roles to Grade 4. It also increased their pay, but only inline with Grade 4 rates, not those which applied to Grade 5.

Breach of contract claim

The employees then issued a group action for breach of contract and unlawful deductions from wages. By the time the case reached the EAT, SCC had accepted that a pay rise takes effect when an employee who has been notified about it continues in the work they have been doing previously. However, SCC maintained it wasn’t bound by Ms Wadsworth’s error.

EAT’s ruling

The EAT disagreed with this on the grounds that:

1. Ms Wadsworth had been appointed to liaise with the employees with a view to resolving their grievance; and

2. The twelve employees had no reason to doubt that she wasn’t able to discuss, or determine, pay and grade issues.

Therefore, Ms Wadsworth’s letters were contractually binding.

Please note: The content of this article is for information purposes only and further advice should be sought from a professional advisor before any action is taken.

Please contact the Employment Team at Cleaver Fulton Rankin for more information: info@cfrlaw.co.uk or 028 9024 3141