Tax and deductions from pay
In Pepper (HM Inspector of Taxes) v Hart and others [1993] IRLR 33 HL, the House of Lords held that in-house benefits, and particularly concessionary school fees for teachers' children, should be assessed for tax on the basis of the additional or marginal cost to the employer of providing the benefit.
In Fairfield Ltd v Skinner [1993] IRLR 4 EAT, the EAT held that there must be justification for making a deduction from wages, even when authority has been given in the contract.
An agreement under which an employee was liable to repay a proportion of a training course fee to his employer if his employment terminated within a certain period did not specifically authorise repayment by way of a deduction from wages, holds the EAT in Potter v Hunt Contracts Ltd.
An employer's right to require overtime from an employee who is under a contractual obligation to be "on call" for a specified number of hours in excess of his basic working week, is subject to the employer's implied duty to take reasonable care not to injure its employee's health, holds the Court of Appeal in Johnstone v Bloomsbury Health Authority.
In Glynn v Commissioner of Inland Revenue [1990] 2 WLR 633, the Judicial Committee of the Privy Council found that school fees paid on behalf of an employee were a taxable benefit.
In Coales v John Wood & Co [1986] IRLR 129 EAT, the EAT held that the obligation on an employer to provide an employee with a written itemised pay statement at or before the time at which any payment of wages or salary is made is an absolute one and is not conditional upon the employee requesting such a statement.
In Postcastle Properties Ltd v Perridge [1985] 276 EG 1063 CA, the Court of Appeal held that an occupier of premises who had been the employee of the then owners when his occupation began was a tenant. Whether or not he had originally been granted a tenancy or a licence, the evidence showed the grant by the subsequent owners of a service tenancy.
In Street v Mountford [1985] AC 809 HL, the House of Lords held that an agreement that provided for exclusive occupation for a rent was a tenancy, although it had been described as a licence. Circumstances where a person with exclusive occupation will not be a tenant include where an employee occupies his employer's premises in order to perform his duties as an employee.
Where employers pay for an employee's training, they can require a reasonable minimum period of service after the training is completed. In Strathclyde Regional Council v Neil, the Sheriff Court holds that a contractual provision for repayment by the employee of the costs incurred is not a penalty and can be enforced, provided the amount relates to the loss suffered by the employer.
Where an employer has mistakenly overpaid an employee, the money can be recovered if it was paid because of a mistake of fact. However in a warning to employers operating computerised payment systems, the Court of Appeal in The County Council of Avon v Howlett holds that the defence of estoppel may operate to prevent recovery of all the money even if the employee has spent only some of it.
Employment law cases: HR and legal information and guidance relating to tax and deductions from pay.