Appeal No. UKEAT/0391/11/LA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At
the Tribunal
On
23 April 2012
Before
HIS HONOUR JUDGE DAVID RICHARDSON
BARONESS DRAKE OF SHENE
MR P GAMMON MBE
MS
W J FAHEY APPELLANT
PLYMOUTH
HOSPITALS NHS TRUST RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
UNLAWFUL DEDUCTION FROM WAGES
The Respondent deducted sums from the Claimant’s pay during her
notice period in respect of incapacity benefit which it assumed she would be
receiving. However, before the Tribunal the Respondent did not establish any
statutory or contractual requirement or authority for the deductions (see
section 13 of the Employment Rights Act 1996). Appeal allowed.
HIS
HONOUR JUDGE DAVID RICHARDSON
1.
This appeal concerns one small aspect of a judgment dated 12 April 2011
by the Plymouth Employment Tribunal (Employment Judge Griffiths presiding). By
its judgment the Tribunal dismissed claims brought by Ms Wendy Fahey (“the
Claimant”) against her former employers the Plymouth Hospitals NHS Trust (“the
Respondent”). She appeals against the dismissal of a claim for unlawful
deduction of wages.
The background facts
2.
The facts can be stated in a short compass. The Claimant was employed
by the Respondent successively as a ward administrator and theatre
co-ordinator. She was absent from work on the grounds of ill health from 24
July 2009 until her employment came to an end on 30 July 2010.
3.
For much of the time between those dates the Claimant was on sickness
pay – first at full rate, then at half rate. When she was given notice,
however, the Respondent reverted to paying her in full at her basic rate of
pay.
4.
Her complaint of unlawful deduction relates to this notice period. She
says that deductions were made from her basic pay in both June and July 2010
which were unlawful. Her wages slips indeed show that deductions were made in
both June and July 2010 – respectively in the sums of £452.27 and £791.48.
Allowing for some other adjustments, the Claimant says that the balance of
£654.49 is due to her by reason of these deductions.
5.
Before the Tribunal the Respondent said that it had made the deductions
in respect of incapacity benefit. It was the Respondent’s case that it was
entitled to make this deduction; and that otherwise the Claimant would have
been better off when sick than she would have been if she was working.
Statutory provisions
6.
At this point it is convenient to set out relevant parts of sections 13
of the Employment Rights Act 1996 which confers upon a worker a right
not to suffer unauthorised deductions from wages.
“13 Right not to suffer unauthorised deductions
(1) An employer shall not make a deduction from wages of a
worker employed by him unless -
(a) the deduction is required or
authorised to be made by virtue of a statutory provision or a relevant
provision of the worker’s contract, or
(b) the worker has previously
signified in writing his agreement or consent to the making of the deduction.
(2) In this section “relevant provision”, in relation to a
worker’s contract, means a provision of the contract comprised –
(a) in one or more written terms of
the contract of which the employer has given the worker a copy on an occasion
prior to the employer making the deduction in question, or
(b) in one or more terms of the
contract (whether express or implied and, if express, whether oral or in
writing) the existence and effect, or combined effect, of which in relation to
the worker the employer has notified to the worker in writing on such an
occasion.
(3) Where the total amount of wages paid on any occasion by an
employer to a worker employed by him is less than the total amount of the wages
properly payable by him to the worker on that occasion (after deductions), the
amount of the deficiency shall be treated for the purposes of this Part as a
deduction made by the employer from the worker’s wages on that occasion.”
7.
Section 14 sets out statutory exceptions for certain types of deduction
(for example, overpayments of salary or expenses, agreed payments to third
parties and payments required by court order). No relevant exception applies
in this case.
8.
Section 23 provides for a worker to present a complaint to an employment
tribunal on the grounds that a deduction has been made in contravention of
section 13.
The Tribunal’s reasons
9.
The Tribunal’s reasons for the most part concern other claims which the
Claimant had presented – in particular unfair dismissal and disability
discrimination. It turned to her claim under section 23 of the 1996 Act in
paragraph 30 of its reasons: –
“30. The claimant asserts that she is owed money deducted from
her salary in respect of incapacity allowance. We are satisfied that she has
been paid everything to which she is entitled. The Trust accepts that the way
in which her pay was managed could have been better. She had a period of
sickness absence on full pay, a period of sickness on half pay and a period
while absent, when she was paid and entitled to holiday pay. She was in
receipt of benefit and through some errors in the information as to the dates
of her commencing her period of sickness absences, some overpayments were made
which were then deducted in subsequent months, and then deductions made to take
account of benefits received. The matter is not without its complexities, but
we are satisfied that the respondent, following full enquiry and subsequent
payments, has paid to the claimant all sums due to her arising out of her
employment or its termination.”
The appeal
10.
The Claimant’s grounds of appeal are straightforward. She says that the
Respondent accepted at the Tribunal that the deductions had been made, but
never put forward any justification meeting the requirements of section 13. In
particular she had never signified in writing her consent to the deduction; and
the Principal Statement of Employment and attached conditions of employment
which were produced to the Tribunal contained no provision requiring or
authorising the deduction to be made. There was accordingly no basis in law or
fact for the Tribunal’s conclusion. On the evidence, the Tribunal was bound to
find that an unlawful deduction had been made.
11.
The Respondent, represented today by Mr Watson, is constrained to accept
that the Tribunal had before it no contractual document requiring or authorising
the deductions to be made. The Claimant’s Principal Statement of Employment
and attached conditions of employment indeed did not do so.
12.
He submits, however, that the Tribunal was entitled to accept oral
evidence from the Respondent’s witnesses to the effect that employees on full
notice pay were not entitled to accept Department of Work and Pensions Benefits
as these would have represented an overpayment. Alternatively he submits that
the Tribunal was entitled to infer, from correspondence where the Claimant was
told that she was paid less “incapacity benefit assumed”, that there must have
been a contractual term entitling the Respondent to deduct benefits from pay.
He says that the focus at the hearing was not on the right of the Respondent to
make a deduction but on the nature of the benefit concerned.
13.
We reject these submissions. The Tribunal found that deductions were
made “to take account of benefits received”. There was no evidence before the
Tribunal of any contractual provision authorising these deduction. The
Tribunal was not entitled to infer that there may have been such a provision on
the say-so of witnesses or from the nature of correspondence given the
contractual documentation produced to it.
14.
The Tribunal was bound, on the evidence before it, to hold that the
deductions were unauthorised. It follows that the appeal will be allowed; and
an order made requiring the Respondent to pay to the Claimant the sum of
£654.49.
15.
As we leave this case, we should record the following points.
16.
Firstly, when the Respondent filed an Answer to this appeal it also made
an application to the Registrar of the Appeal Tribunal to adduce further
contractual documentation, which did not on the face of it form part of the
Claimant’s Principal Statement of Employment or the attached conditions which
were produced to the Tribunal. The Registrar rightly refused the application
to adduce this evidence. If the Respondent wished to argue that it formed part
of the Claimant’s contract of employment the time for doing so was before the
Tribunal.
17.
Secondly, the Claimant says that in June and July 2010 she was not
entitled to incapacity benefit as the Respondent thought; but was in receipt of
Employment and Support Allowance. It follows that for the period of her notice,
when she was paid full pay less the deductions to which we have referred, she
may indeed be better off (once she has been paid the deducted sum) than if she
had been employed. We record that the Department of Work and Pensions was
notified by the Appeal Tribunal of this appeal and asked whether it wished to
be a party. It declined to intervene. Although recoupment provisions apply to
certain awards made by Employment Tribunals, they do not apply to an award made
under section 23 of the Employment Rights Act 1996. This being so,
whether any sum is repayable to the Department of Work and Pensions is a matter
between the Claimant and the Department which does not concern the Appeal
Tribunal.
