Freely Available British and Irish Public Legal Information
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Fairfield Ltd v Skinner [1992] UKEAT 390_90_2707 (27 July 1992)
URL: http://www.bailii.org/uk/cases/UKEAT/1992/390_90_2707.html
Cite as: [1992] UKEAT 390_90_2707
[New search] [Printable RTF version] [Help]
At the Tribunal
Before
THE HONOURABLE MR JUSTICE HUTCHISON
MR K GRAHAM
MR J C RAMSAY
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellants MR F PURDY
(LAY REPRESENTATIVE)
S Coltman
Secretary
The Fairfield Group
9 Belltrees Grove
London SW16 2HZ
For the Respondent NO APPEARANCE BY OR
MR JUSTICE HUTCHISON: This is an appeal by the employers from a decision of an Industrial Tribunal in London South given as long ago, it pains me to say, as 7 June 1990. By that decision they declared that the respondents had made unlawful deductions from the applicant's pay contrary to the provisions of the Wages Act 1986 and ordered that they should pay to the applicant £305 unlawfully deducted. Then by a letter of 28 August 1990, the Chairman wrote as follows:
"In exercise of the powers conferred on me by Rule 9(9) of the Industrial Tribunals (Rules of Procedure) Regulations 1988, I hereby correct the clerical mistake in the decision of the Tribunal in the case of:
MR W SKINNER v THE FAIRFIELD GROUP
In paragraph 14, final line delete £305 and substitute £395."
In paragraph 14 the final line was that in which they gave in summary form their decision reflected in the first paragraph of the award:
"14 The Tribunal therefore is of the unanimous decision that (1) there should be a declaration that the respondents made unlawful deductions from the applicant's wages contrary to the provisions of the Wages Act 1986 and that (2) the Tribunal order the respondents to pay to the applicant the sum of £305 [corrected to £395] unlawfully deducted."
If we may just pause there, the position as we understand it from Mr Purdy, to whose helpful arguments we have already alluded, is that the extra £90 was attributable solely to that part of the claim that this employee made for wages in lieu of notice and the Industrial Tribunal were by that addition including in their award the sum that he should have been paid in respect of one week in lieu of notice - he having been as they found summarily dismissed. We will come back to that sum at the end of this judgment.
The material facts as they emerge from the tribunal's decision are quite simple. The applicant was a van driver employed by the respondents with effect from 3 January 1989. He was given an appointment letter containing contractual terms which we have not seen but to which it will be necessary to make reference in a moment. On 3 January he was given a further document governing additional matters concerning the respondents' vehicle policy. The relevant parts of that second document provided that the employee could use company vehicles for personal purposes but would be liable for insurance policy excess for any damage caused whilst using the vehicle for personal purposes and that that there would be certain limits in terms of mileage on the amount of private use that he might make each week. There was a further term governing private telephone calls from the van and a provision that should he make private calls they would be charged at a specified rate.
As the tribunal found the contract and that supplementary document between them contain contractual terms which entitled the employers to deduct from this man's wages sums due under the provisions about damage to the vehicle or excess mileage or private telephone calls.
They found that the applicant was, on 23 October 1989, dismissed summarily for non-attendance. He had been a poor attender but the tribunal found that whatever might have been the inadequacies of his previous attendance record it was certainly not so poor as to justify that draconian step of summary dismissal for his failure to attend on 23 October. He was, therefore, wrongly dismissed and was entitled, in their view, to one week's pay in lieu of notice.
They also found this:
"9 ....... The applicant was told on the day of his dismissal that his wages would be sent to him."
(i.e. the wages accrued due before the 23rd October) "on 30 October 1989 a
cheque and written calculation was sent to him." We emphasise again that we have not seen that that document - which was document 6 before the tribunal - but the effect of it was as follows, as they find:
"The deductions that were made and referred to in the letter are in respect of two sums, one is the cost of repairs to the nearside front door of a Suzuki van"
- damaged while he was using it in the course of his employment and the second sum of £150, described as "Provisional deduction for van telephone calls and private mileage in excess of free
allowance". The upshot of that was that the sum that would otherwise have been due to him by way of wages was reduced by a total of £305 and there was accordingly paid to him not the total sum that he was entitled to but that sum less £305. The tribunal say this about those deductions - dealing first of all with the matter of the damage to the vehicle:
"9 .......... The applicant's evidence was that in August 1989 he sustained an accident while he was using the van privately. He has a skill in carbody repair work. He accepted that the fault was his and he agreed with Mr Purdy the managing director that he would at his own expense repair the van. This he duly did. Mr Purdy was satisfied. The applicant continued to drive the van for the respondents' business. It was not until after he left that that the respondents obtained an estimate for repairing the van in the sum of £160.
10 The Tribunal are quite satisfied from the evidence that the respondents were not entitled to make this deduction in respect of the damage which had already been adequately repaired by the time that the applicant left the respondents' employ."
There is a clear finding that the deduction of £155 purportedly justified by provisions to the contract was not in fact justified because that sum was not due from the employee to the employers. Dealing with the matter of the telephone calls and private mileage they describe the reference to provisional deduction for van telephone calls and private mileage in excess of free allowance as a somewhat curious one and go on:
"The applicant stated to the Tribunal that he had over a long period made no privcate journeys in excess of the 50 miles per week and was careful not to do so. The respondents at no time have shown to him an itemised claim in respect of that alleged excess and indeed it is to be noted that what they are talking about is "provisional deduction". No itemised mileage has been shown to him or indeed to this Tribunal.
"12 As to the deduction for use of the van telephone the provisions in the conditions refer to a monthly deduction in respect of any calls made. There is nothing in this umbrella sum to show what is related to any or what private telephone calls. The Tribunal is far from satisfied that there is any entitlement to the respondents to have made those deductions. No evidence has been produced that telephone calls were made by the applicant in his final month of employment."
There again is a finding that the alleged entitlement to deduct was not an entitlement at all because it was not established that anything was due.
The crucial paragraph Mr Purdy contends, is paragraph 13 of the tribunal's decision. We do not propose to read it because it is susceptible of a briefer summary. In that paragraph the Industrial Tribunal express the clear conclusion that as a matter of construction the contract contained provisions which satisfied Section 1(1)(a) of the Wages Act 1986 and would have entitled the employers to make these deductions had the evidence shown that factually they were entitled to do so and that the claim failed, therefore, not on the basis of the construction of the statute or the contract but on the facts, because neither sum was due.
Mr Purdy, who has presented this appeal most eloquently, has argued to this effect. He says, rightly in our judgement, that the first question that any tribunal entertaining a claim for wages which falls within the Wages Act has to ask itself is -"what amount was properly due to the employee by way of net wages?" i.e. after deduction of tax and PAYE. Having done that he says the second question is: "has there been a deduction and if so for how much?". In this case plainly the tribunal had, or must be inferred to have satisfied itself that the first question could be answered by deciding that a particular sum was due and that there had been a deduction in the sum of £305.
Then, says Mr Purdy, comes the third question and the third question is a very circumscribed one, namely, "does the ground on which the employee justifies that deduction appear to fall within the provisions of the contract and the terms of Section 1(1)(a) or (b) of the Wages Act?" Mr Purdy argues that if the answer to that question is that as a matter of construction the ground which the employer asserts for deduction falls within the Section and the contract that is an end to the matter. The tribunal is not entitled to continue on a factual enquiry to discover whether the sums deducted do actually fall within the contractual provisions. In that situation the employee must go to the county court if he wishes to challenge the factual basis of the deduction. We consider that this is a matter which depends entirely on the correct construction of Section 1(1)(a) which provides:
"(1) An employer shall not make any deduction from any wages of any worker employed by him unless the deduction satisfies one of the following condition, namely-
(a)it is required or authorised to be made by virtue of any statutory provision or any relevant provision of the worker's contract; or
(b)the worker has previously signified in writing his agreement or consent to the making of it."
Those are simple words and for the purposes of this case since it was Sub-section (1)(a) on which the tribunal relied, involve a construction of the words "it is required or authorised to
be made by virtue of any statutory provision or any relevant provision of the worker's contract". The question the tribunal, who were of course considering a claim in respect of unauthorised deduction under Section 5(1) of the Act, had to ask themselves was "were the deductions that had here been made such as were authorised to be made by virtue of any relevant provision in the worker's contract?". Mr Purdy seeks support for his construction by reference to a passage in the judgment of Nicholls LJ in the Court of Appeal case of Delaney - a case which has subsequently gone to the House of Lords - reported in [1991] ICR 331 and at page 339H:
"The Act is, indeed, concerned with unauthorised deductions. But section 8(3) makes plain that, leaving aside errors of computation, any shortfall in payment of wages properly payable is to be treated as a deduction. That being so, a dispute, on whatever ground, as to the amount of wages properly payable cannot have the effect of taking the case outside section 8(3). It is for the industrial tribunal to determine that dispute, as necessary preliminary to discovering whether there has been an unauthorised deduction."
- and we come then to the words which Mr Purdy particularly relies on:
"Having determined any dispute about the amount of wages properly payable, the industrial tribunal will then move on to consider and determine whether, and to what extent, the shortfall in payment of that amount was authorised by the statute or was otherwise outside the ambit of the statutory prohibition: for example, by reason of section 1(5). To the extent that the shortfall is found to be a contravention, the industrial tribunal will make an appropriate declaration and orders, in accordance with section 5(4) to (6)."
Mr Purdy suggests, but we disagree, that in that passage Nicholls LJ is to be taken to laying down that it is merely a matter of construing the contract and the statute against the employers' professed reason for deduction and does not contemplate an enquiry into the facts of the case. There is no justification for construing that passage, where Nicholls LJ plainly was not addressing a problem such as we are concerned with in this case, in that way. One has only to reflect on the extraordinary results that would follow - which it is unnecessary to elaborate - if Mr Purdy's suggestion were correct to realise that it cannot be.
As a matter of simple language it seems to us that Section 1(1)(a) contemplates that the Industrial Tribunal must, where there is a dispute as to the justification of the deduction, embark upon the resolution of the dispute. They have done so here: they have concluded that, in the absence of any evidence that the sums deducted were due from the employee they were not satisfied that the contract entitled the employers to make either deduction. In the circumstances their conclusion is unimpeachable and there exists no good ground for allowing this appeal on the main argument that has been presented.
That leaves the £90 - and we confess that we are hesitant as to what to do about that. Lacking as we do any of the material documents, or any argument from respondent who has not appeared today to contest this appeal, we have some doubt as to whether we can properly proceed on the basis that the additional £90 does indeed reflect payment in lieu of notice. Mr Purdy assures us that it does and assuming that he is right it is quite clear from the decision of the House of Lords in Delaney v Staples [1992] IRLR 191, that the tribunal had, in fact, no jurisdiction to entertain that part of the claim, which was in truth a claim for damages for breach of contract and did not fall within the Wages Act. We propose in the circumstances to allow the appeal only to this extent - that the sum awarded will be reduced by £90 to £305: but we direct that the Order be not drawn up until 14 days after the respondent has been informed by letter of the proposed order and of his right to apply to this Court if (and only if) he disputes the proposition that that sum was awarded in respect of wages in lieu of notice. For that purpose he has liberty to apply.