United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR LAMB (of Counsel)


 


JUDGE PETER CLARK: This is an appeal by Mr Adhia against a decision of the Stratford Industrial Tribunal sitting on 6 November 1996, 26 February and 25 March 1997, dismissing his complaints of unauthorised deductions from his wages and failure to provide written particulars of his terms and conditions of employment brought by him against the Respondent, Bhadresa & Co. Extended Reasons for that decision are dated 21 April 1997.

Mr Adhia was employed by the Respondent firm of Solicitors from 7 June 1993 until 17 November 1995. He was a fee earning Solicitor, earning £15,000 per annum until 31 March 1995.

In March 1995 Mr Bhadresa, the firm's principal, came to the conclusion that the Appellant was not generating sufficient fee income to cover his salary. Accordingly he told the Appellant that he was going to alter the basis of his remuneration to payment by commission. He suggested 30 per cent, the Appellant contended for 40 per cent and they settled for 35 per cent.

The parties further agreed that the Appellant would continue to receive £1,250 per month gross, his then salary, and that at the end of three months his profit costs would be calculated and adjustment made either way based on the new 35 per cent formula.

No express agreement was reached as to what would happen so far as commission earned was concerned after the termination of the employment. The Industrial Tribunal declined to imply a term as to what was then to happen.

In October 1995 the Appellant gave one month's notice to terminate the employment. That notice was due to expire on 15 November, but in the event he stayed on until 17 November in order to complete a County Court case, that of Nakum, which he had conducted.

On 15 November the parties entered into discussions as to what would happen about outstanding commission following termination. The Industrial Tribunal found as a fact that it was orally agreed that the Respondent would pay commission on fees attributable to the Appellant and paid to the Respondent by 15 December 1995.

On 20 December the Respondent paid commission in the sum of £3,573.39 in respect of the months July to September 1995.

On 5 February 1996 the Appellant received a further cheque in the sum of £958.24, which was said to represent final payment of commission due up to 15 December 1995.

Subsequently the Appellant maintained that he was to receive continuing commission in respect of fees paid after 15 December 1995, but in respect of work done by him prior to the termination of the employment. The Industrial Tribunal rejected that case, having found that the parties had reached the compromise agreement which we have set out above.

In July and August 1996 the Respondent made two further payments to the Appellant of £514.69 and £21.20 respectively, being further payments due in respect of the period ending on 15 December 1995.

Before either of those payments were made the Appellant presented his complaint to the Industrial Tribunal on 8 July 1996.

Limitation

Non-payment by the employer of sums due to an employee by way of commission falls within the scope of the expression "deduction from wages" for the purposes of Section 13(3) of the Employment Rights Act 1996: see Delaney v Staples [1991] ICR 331 (CA). The appeal to the House of Lords in that case did not touch that finding.

By Section 23(2) of the Act a complaint of unlawful deduction from wages must be presented before the end of the period of three months beginning with the date of the payment of wages from which the deduction was made.

In this case the final relevant payment prior to the presentation of the complaint, so the Industrial Tribunal held, was that made on 5 February 1996. Time began to run from that date. The further payments made in July and August following presentation of the complaint did not restart the clock.

Accordingly, the complaint presented on 8 July 1996 was outside the primary limitation period. In the exercise of their discretion the Industrial Tribunal declined to extend time under Section 23(4) of the Act.

As to the claim for a written statement of terms, the Industrial Tribunal found that the claim was not made within three months of the termination of the employment on 17 November 1995, and again refused to extend time. There is no appeal against that latter finding.

The Appeal

Mr Lamb, who appears on behalf of the Appellant, takes the following points. First he submits that, as a matter of long-standing common law (and he has referred us to a number of cases to this effect) where the contract is silent as to whether or not commission is payable after termination of the particular engagement in respect of which commission is payable, there is to be implied a term that the commission will continue to be paid after termination in relation to commission for work done before termination.

Accepting that submission we turn then to his second point which is that the Tribunal's finding that the parties entered into the compromised agreement on 15 November 1995 was a perverse finding, in that the Appellant would have been entitled under the ordinary implied term of the agreement, to continue to receive commission on work which he had done up until 17 November 1995 whenever the fees in respect of that work were received by the Respondent.

How then could he be said to have entered into such an unfavourable bargain? That is not the question for us or indeed for the Industrial Tribunal. The factual question was whether or not the parties did enter into that oral agreement on 15 November 1995. If so, the resulting express term renders implication of a term otiose.

That was the finding of the Industrial Tribunal and, in support of their finding they relied in particular on a subsequent letter written by the Respondent on 12 January 1996, which referred to the Respondent letting the Appellant have a final accounting very shortly for the commission due up until the cut-off date of 15 December 1995. The Tribunal noted that that proposition was not challenged by the Appellant at the time, nor indeed up until receipt of the cheque on 5 February 1996.

We have been shown a subsequent letter in March 1996 from the Appellant in which he contends that he was entitled to further commission on fees received after 15 December 1995. However, it seems to us that this was a finding of fact which it was open to the Industrial Tribunal to make and we cannot interfere with it.

There is an application, on behalf of the Appellant, to adduce evidence before us which was not before the Industrial Tribunal under the principles in Wileman v Minilec Engineering Ltd [1988] ICR 318.

We are not satisfied that that material falls within the Wileman principle and we are not prepared to admit that in evidence. Indeed, we think it very unlikely that the admission of that evidence would have any material bearing on the limitation issue which arises for determination in this appeal.

Having reached those conclusions we think Mr Lamb accepts that, for the purposes of Section 23 of the Act, the final payment in respect of which an unlawful deduction is said to have been made was that received by the Appellant on 5 February 1996. It follows that the Originating Application was presented outside the primary three month limitation period. As to the Tribunal's exercise of its discretion not to extend time under Section 23(4) that is dealt with in paragraph 28 of the Tribunal's Extended Reasons. They say this:

"The Applicant has submitted that we should exercise our discretion to extend time under Section 23(4). We refuse to do so. It was reasonably practicable to present the Originating Application within three months of 5 February 1996. The fact that there was continuing correspondence between the parties after 5 February 1996, and a continuing dispute does not render it impracticable to have presented an Originating Application within three months of 5 February 1996. It is a common occurrence for persons to present Originating Applications to protect their position while a dispute and/or negotiations are continuing."

We can see no error of law in the Tribunal's exercise of its discretion under Section 23(4) and, in these circumstances we have come to the conclusion that this appeal raises no arguable point of law to go to a full hearing of the Appeal Tribunal and consequently we must dismiss the appeal at this stage.