|At the Tribunal|
|On 19 January 2018|
HER HONOUR JUDGE EADY QC
PROPERTY MANAGEMENT LTD
Transcript of Proceedings
(3) AJIT SINGH BRAINCH
|For the Appellant||MS BETSAN CRIDDLE
Bar Pro Bono Scheme
Paris Smith LLP
1 London Road
|For the Respondent||MR MARK GREEN
Blackbrook Park Avenue
NATIONAL MINIMUM WAGE
UNLAWFUL DEDUCTION FROM WAGES
National minimum wage - unauthorised deduction from wages - section 23 Employment Rights Act 1996 - sections 9 and 39 Limitation Act 1980
The Claimant had successfully claimed that the Respondent had failed to pay him at national minimum wage rates and, at the subsequent Remedies Hearing before the ET, sought to recover payment for the sums that should have been paid, going back to the introduction of the National Minimum Wage Act, a period of some 15 years. The Respondent resisted that claim, contending that section 9 Limitation Act 1980 meant the Claimant could only recover sums going back six years. The ET agreed with the Respondent, holding that the three-month time limit for bringing an unauthorised deductions claim was concerned only with the question of the ET's jurisdiction to determine the claim and did not amount to a period of limitation for the purposes of section 39 Limitation Act such as to disapply section 9. The Claimant appealed.
Held: allowing the appeal
Where a claim was brought under a statute that prescribed a period of limitation, section 39 Limitation Act 1980 provided that the limitations that would otherwise apply pursuant to that Act (including the six-year limitation under section 9 of the Limitation Act) would not do so. Claims for unauthorised deductions were subject to a period of limitation by virtue of subsections 23(2) and (3) Employment Rights Act 1996. The ET had been wrong to hold that this was not a period of limitation for the purposes of section 39 Limitation Act: section 39 drew no distinction between periods of limitation for jurisdictional or remedy purposes. The Claimant had brought his claim in respect of the series of deductions made from his pay within three months of the last of the deductions in the series, as prescribed by subsection 23(3) and was thus entitled to recover the sums that had been deducted from the wages properly payable to him, as provided by the National Minimum Wage Act, without the imposition of a back-stop of six years.
HER HONOUR JUDGE EADY QC
The Relevant Factual Background and the ET's Decision and Reasoning
Statutory Employment Protections - The Relevant Legal Framework
"(1) A person who qualifies for the national minimum wage shall be remunerated by his employer in respect of his work in any pay reference period at a rate which is not less than the national minimum wage."
"(1) If a worker who qualifies for the national minimum wage is remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage, the worker shall at any time ("the time of determination") be taken to be entitled under his contract to be paid, as additional remuneration in respect of that period, whichever is the higher of -
(a) the amount described in subsection (2) below, and
(b) the amount described in subsection (4) below."
"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.
"(1) In this Part "wages", in relation to a worker, means any sums payable to the worker in connection with his employment, including -
(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,
And see New Century Cleaning Co Ltd v Church  IRLR 27 CA.
"(1) A worker may present a complaint to an employment tribunal -
(a) that his employer has made a deduction from his wages in contravention of section 13 (including a deduction made in contravention of that section as it applies by virtue of section 18(2)),
"(2) Subject to subsection (4), an employment tribunal shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with -
(a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or
(b) in the case of a complaint relating to a payment received by the employer, the date when the payment was received.
(3) Where a complaint is brought under this section in respect of -
(a) a series of deductions or payments, or
(b) a number of payments falling within subsection (1)(d) and made in pursuance of demands for payment subject to the same limit under section 21(1) but received by the employer on different dates,
the references in subsection (2) to the deduction or payment are to the last deduction or payment in the series or to the last of the payments so received.
(4) Where the employment tribunal is satisfied that it was not reasonably practicable for a complaint under this section to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is presented within such further period as the tribunal considers reasonable."
"18. when dealing with a limitation point under the Wages Act the tribunal must ask itself the following questions:
(1) Is this a complaint relating to one deduction or a series of deductions by the employer?
(2) If a single deduction, what was the date of the payment of wages from which the deduction was made?
(3) If a series of deductions, what was the date of the last deduction?
(4) Was the relevant date under (2), alternatively (3), above within the period of three months prior to the presentation of the complaint?
(5) If the answer to question (4) is in the negative, was it reasonably practicable for the complaint to be presented within the relevant three-month period?
(6) If the answer to question (5) is in the negative, does the tribunal consider that the complaint was nevertheless presented within a reasonable time?"
"79. Whether there has been a series of deductions or not is a question of fact: "series" is an ordinary word, which has no particular legal meaning. As such in my view it involves two principal matters in the present context, which is that of a series through time. These are first a sufficient similarity of subject matter, such that each event is factually linked with the next in the same way as it is linked with its predecessor; and second, since such events might either be stand-alone events of the same general type, or linked together in a series, a sufficient frequency of repetition. This requires both a sufficient factual, and a sufficient temporal, link.
81. Since the statute provides that a tribunal loses jurisdiction to consider a complaint that there has been a deduction from wages unless it is brought within three months of the deduction or the last of a series of deductions being made (section 23(2) and (3) of the [ERA] taken together) I consider that Parliament did not intend that jurisdiction could be regained simply because a later non-payment, occurring more than three months later, could be characterised as having such similar features that it formed part of the same series. The sense of the legislation is that any series punctuated from the next succeeding series by a gap of more than three months is one in respect of which the passage of time has extinguished the jurisdiction to consider a complaint that it was unpaid."
"(4A) An employment tribunal is not (despite subsections (3) and (4)) to consider so much of a complaint brought under this section as relates to a deduction where the date of payment of the wages from which the deduction was made was before the period of two years ending with the date of presentation of the complaint."
" insert a limitation on how far back in time an employment tribunal is able to consider when determining whether a worker has suffered unauthorised deductions from their wages. "
"(1) it shall make a declaration to that effect and shall order the employer -
(a) to pay the worker the amount of any deduction made in contravention of section 13;
The Limitation Act 1980
"(1) An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued."
"This Act shall not apply to any action or arbitration for which a period of limitation is prescribed by or under any enactment (whether passed before or after the passing of this Act) "
Other Statutory Provisions referred to in Argument
"123. Time limits
(1) proceedings on a complaint may not be brought after the end of -
(a) the period of 3 months starting with the date of the act to which the complaint relates, or
(b) such other period as the employment tribunal thinks just and equitable.
(3) For the purposes of this section -
(a) conduct extending over a period is to be treated as done at the end of the period;
(b) failure to do something is to be treated as occurring when the person in question decided on it.
(4) In the absence of evidence to the contrary, a person (P) is to be taken to decide on failure to do something -
(a) when P does an act inconsistent with doing it, or
(b) if P does no inconsistent act, on the expiry of the period in which P might reasonably have been expected to do it."
"3. Extension of jurisdiction
Proceedings may be brought before an employment tribunal in respect of a claim of an employee for the recovery of damages or any other sum (other than a claim for damages, or for a sum due, in respect of personal injuries) if -
(a) the claim is one which a court in England and Wales would under the law for the time being in force have jurisdiction to hear and determine;
(b) ; and
(c) the claim arises or is outstanding on the termination of the employee's employment.
7. Time within which proceedings may be brought
An employment tribunal shall not entertain a complaint in respect of an employee's contract claim unless it is presented -
(a) within the period of three months beginning with the effective date of termination of the contract giving rise to the claim, or
(b) where there is no effective date of termination, within the period of three months beginning with the last day upon which the employee worked in the employment which has terminated, or
(c) where the tribunal is satisfied that it was not reasonably practicable for the complaint to be presented within whichever of those periods is applicable, within such further period as the tribunal considers reasonable."
The Appeal and the Claimant's Submissions
The Respondent's Case
The Claimant in Reply
Discussion and Conclusions