In Bent and others v Central Manchester University Hospitals NHS Foundation Trust, an employment tribunal has held that the Trust was not entitled to apply a local policy which sought to deny contractual pay increments where employees exceeded set sickness absence thresholds.

The NHS pay progression system, which was agreed nationally under the Agenda for Change Agreement (AfC Agreement), entitles NHS staff to automatic pay increments provided that their performance is satisfactory and they have demonstrated the agreed knowledge and skills appropriate to their new pay band. The AfC Agreement also states that automatic increments can only be deferred if there are significant weaknesses in performance. In 2010 the Trust introduced a ‘Behavioural Incremental Pay Progression Policy’ (BIPP) under which incremental pay progression was frozen if staff were being managed under the Trust’s sickness absence policy. A group of workers who had been adversely affected by this policy brought claims for unlawful deductions from pay.

The Trust argued that the references to ‘satisfactory performance’ and ‘demonstrating the agreed knowledge and skills’ in the AfC Agreement should be interpreted widely to cover a requirement for regular attendance, and that high sickness levels could inhibit satisfactory performance. It also argued that local employers should be free to determine what is meant by these terms.

The tribunal rejected the Trust’s arguments, agreeing with the claimants that the BIPP was inconsistent with the national pay progression policy which was expressly incorporated into their terms and conditions. Absence due to sickness could not be taken into account when considering performance for the purposes of pay progression under the AfC Agreement. Since the Trust had imposed a unilateral variation of employment terms, failure to pay annual increments under the BIPP amounted to unlawful deductions from pay.