United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M SHERIDAN (of Counsel) Instructed by: Messrs Black Graf Solicitors 14/15 College Crescent London NW3 5LL
For the Respondent	MR A SOLOMON (of Counsel) Instructed by: Chelsea Citizens Advice Bureau Chelsea Old Town Hall Kings Road London SW3 5EE


 


SUMMARY

Unlawful deduction from wages – Exclusions

National minimum wage

This case related to an unhappy dispute between an employer and her former nanny. It concerned a variety of small issues none of any general interest.


 


HIS HONOUR JUDGE REID QC

1. This is an appeal against the decision of an Employment Tribunal held at London Central on 7 February and 13 March last year. The decision was sent to the parties and entered on the register on 22 March. By its decision, the Tribunal unanimously held that the Claimant's claim for the National Minimum Wage was successful and awarded the sum of £2,832.90. Secondly it awarded the Claimant £405.38 for holiday pay. Thirdly it awarded the Claimant £200.00 for an unlawful deduction from wages. It awarded the Respondent £286.15 on the counterclaim.
2. Against that decision the Respondent appeals on a number of grounds. The issues which have been allowed to come to this hearing firstly relate to the unlawful deduction point, secondly relate to a finding as to the reasonable period of notice was to be implied in the Claimant's contract, thirdly relate to the measure of damages on the counterclaim and fourthly relate to the Claimant's other claims which the Employment Tribunal held that it had no jurisdiction to consider.
3. The background to the case is that the Claimant and the Respondent are both Polish. The Claimant answered an advertisement in Poland for a nanny and took up the post of nanny with the Respondent. The terms of that engagement were that the hours of work were 8.30 – 6.00pm, Monday to Friday and 9.00-2.00pm on Saturday. The wages were expressed to be £120.00 per week. Accommodation and food was included. There was to be a trial period of 1 month on each side. 1 month's wages would be taken as a deposit towards a notice period. The agreement would be for a minimum of a year, otherwise the Respondent had the right to keep the deposit. If the postholder accepted the post after the trial period, the postholder's travel costs would be refunded at the end of the contract.
4. The employment commenced on 20 February 2005 and I say the employment commenced advisedly because one of the issues in this appeal was whether the Claimant had been really a worker or was an employee. Insofar as that is concerned, in her ET1 she had described herself as an employee though the Respondent, who was at that stage without the representation, described her as a worker. Clearly that was a matter about which the Tribunal said little but throughout they used expressions such as 'employer' and 'employment' and this is shows that they determined the point that there was a contract of employment. Furthermore at paragraph 48 they said "We find the contract is silent on the length of the notice period, in the circumstances we find the parties were entitled to a statutory notice period of 1 week as prescribed by Section 86 of the Employment Rights Act 1996. We are satisfied the Claimant terminated her employment because she was unwell and not because the Respondent was in a fundamental breach of contract in relation to the National Minimum Wage." That is seems to us makes crystal clear that the Tribunal held that the Claimant was an employee.
5. The first of the issues on the appeal relates to the finding of an unlawful deduction of £200.00. The finding of fact appears to be that four instalments of £50.00 each were deducted towards a deposit by the Respondent from the Claimant's wages and were to be held as a deposit. That was done with the consent of the Claimant. The Tribunal held that this was unlawful because the Respondent did not signify her consent in writing as required by Section 14(4)(a) or (b) of the Employment Rights Act 1996. It is conceded here that the Tribunal was wrong in law in concluding that in order for the deduction to be lawful the Claimant was required to signify her consent to such a deduction in writing pursuant to those subsections because that section applies to arrangements "under which the employer is to deduct and pay over to a third person amounts notified to an employer by that person as being due to him, the worker". The Tribunal therefore misunderstood the law under Section 13 (1) of the Act. There is no prohibition against the making of a deduction by an employer in circumstances where the deduction is authorised by a relevant provision of the worker's contract. It can't sensibly be said, as Counsel for the employer observed, that there was no such relevant provisions in the Respondent's contract.
6. In answer to that, it was pointed out that by virtue of the National Minimum Wage regulations, in particular Regulations 31 and 33, the deduction could not be made if as a result of the deduction the amount being paid over was reduced below the National Minimum Wage. The answer we think to that point is that if that was the case then that was something to be taken into account in the calculation of the amount due to the Claimant under her claim for the National Minimum Wage. That was a claim in which she was successful in being award the sum of £2,832.90. Had the employee wished to uphold the decision of the Employment Tribunal on this new ground the way it ought to have been done was by a cross appeal asserting that the award under the National Minimum Wage was incorrectly calculated and should have been increased by a further £200.00. Since that was not done it seems to us that the point is not open on this appeal and that, in those circumstances, all we can do is overturn the Tribunal's deduction of £200.00 on the basis that it was made on a wrong basis in law.
7. The second point that was raised on the appeal was the Tribunal erred in the paragraph that I have already read out, that is to say paragraph 48 of its decision, in holding that the appropriate length of notice period in this contract of employment was 1 week. The argument ran that the contract did not contain any express term for a period of notice, therefore as a matter of common law a reasonable period of notice was to be inferred. It was as a matter of statute that one week was the minimum period of notice. It was said that the Tribunal had erred in leaping from saying that there was no express period of notice to holding that the appropriate period of notice was therefore the one week statutory period. In our judgment the Tribunal did not make that error. The sentence that I have already read is, "In the circumstances, we find the parties were each entitled to statutory notice period of 1 week as prescribed by Section 86 of the Employment Rights Act 1996." It seems to us that the Tribunal having recited all the findings of fact before setting out this conclusion was saying that, in the circumstances, 1 week (i.e. the statutory notice period) was the appropriate period. It had rejected a claim that there was an express contractual one month period. It no doubt looked at a number of factors. It was apparent e.g. that the employer was able to obtain a replacement nanny immediately. No doubt they looked also at the fact that the so-called month's deposit was in fact limited on their findings to £200.00, a sum which might be thought to be more akin to a week's wages at the agreed, as opposed to the statutory, rate plus a few add-ons, rather than a month's payment. In our judgment, the employer had failed to make out any error on the part of the Tribunal in that conclusion.
8. The ground that follows relates to the measure of damages on the counter claim. What occurred in this case was that the employee nanny left without giving any notice. The Tribunal awarded one week's money for that breach of contract. It is conceded that the Tribunal erred in simply awarding that week's pay as the measure of damage. The true measure of damage it was accepted was the difference between the amount which should have been paid to the nanny if the minimum wage regulations had been complied with (£286.15) and the amount that had to be paid to the stand-in nanny who was obtained. The evidence was the stand-in nanny was obtained at £300.00 per week. The difference was therefore £13.85. The employer has therefore succeeded in showing that the Tribunal's decision was wrong but regrettably from her point of view has succeeded also in showing that in lieu of the figure of £286.15 she should be awarded a sum of £13.85. Had she of course succeeded in showing that a reasonable period of notice was 4 weeks she would have been entitled to four times that. It was argued that on behalf of the nanny that since it was found that she had given notice because she was ill or she had left because she was ill there might have been a need to employ another nanny in any event, but that appears to have been contradicted by the finding of the Tribunal awarding the sum of a week's wages which of course they would not have been awarding had they found that the nanny was unable to work over that week and the contract was therefore effectively frustrated. It follows that that part of the appeal is allowed but with, it turns out, adverse consequences to the Appellant's employer.
9. The remaining ground related to the other cross claims which the employer made. The Tribunal held that it had no jurisdiction in relation to those claims. The reasoning in relation to that was in paragraph 49, the Tribunal having listed at paragraph 47 what it said were the items being counterclaimed. The Tribunal said "We are satisfied that there is nothing in the Claimant's contract of employment that permits the Respondent for the other items as listed above [i.e. Other than the claims for failure to give notice] accordingly, the counterclaim for these items fails." The employer said that that was a conclusion which was wrong in law because by virtue of Section 3(2)(a) of the Employment Tribunal's Act 1996 the Tribunal had jurisdiction if a claim was for damages for breach of a contract of employment or other contract connected with employment.
10. So far as some of those items are at least concerned it seems to us that the Tribunal was wrong in its conclusion that it had no jurisdiction. Turning to paragraph 47 of the decision, items 1 and 2 have already been dealt with, that is, the notice monies and cost of employing a live-out nanny. Item 3 described as "computer repair" of £80.00 was not in our judgment, something which would have been within the jurisdiction of the Tribunal. It is difficult to see how that could have been a term of either the contract of employment or of any contract running with it. The ET3 had put that claim in this way, "The cost of the repair of the computer which crashed due to viewing unsecured porn sex sites (it then lists some of them) while I was away, £120.00." There is no explanation between the difference of £120.00 and the £80.00 but in any event that is not something which could have been in the jurisdiction of the Tribunal.
11. Then there was a claim for an allegedly stolen CD and skirt. So far as that is concerned, there appears to be nothing in the Tribunal's findings which would justify a finding of theft in relation to the CD and there is nothing in the ET3 which refers to any stolen skirt. Whilst this would have been within the jurisdiction of the Tribunal because there is an implied term of fidelity in any contract of employment, it seems to us that it would be wholly wrong for a matter of £15.00 to return this matter for a fresh hearing before the same or indeed any other tribunal. We take the view in the absence of any evidence recorded on which the theft could be proven that that claim should rightly continue to stand dismissed.
12. On the other hand, so far as the unpaid telephone bill and the refund of the travel ticket in the sum of £65.01, those clearly were matters could properly be said to be repayment claims arising out of a contract connected with the employment. Reimbursing one's employer for use of the telephone, and reimbursing one's employer who has paid on their credit card for a ticket to go home for a holiday are clearly connected with employment.
13. Given the current state of the findings and of the pleading, it seems to be that there is enough material for us to say (rather than remitting £74.00 worth of claim to an Employment Tribunal for a rehearing) that these items have been made out. It does not appear that there was any denial either that the ticket had been paid for or that it cost £65.01 or, in respect of the telephone bill, that the modest sum of £9.50 was not owing. It seems to us therefore that the appropriate course in relation to this head of claim is to allow the appeal and for the dismissal of the remainder of the counterclaim to substitute an award of £74.51. That deals with all the points that have been raised. It also disposes of the appeal without the need for any remission to anybody. We cannot, of course, prevent the employer launching proceedings in the county court if she thinks it appropriate to do so for the small sums involved and given the county court fees involved. We will therefore allow the appeal to the extent that I have indicated.