Unauthorised deductions from pay
In Farrell Matthews & Weir v Hansen, the EAT holds that a non-contractual bonus that had been declared constituted wages under s.27(3) of the Employment Rights Act 1996. The employer's failure to pay it therefore amounted to an unlawful deduction from wages.
In Guthrie v Scottish Courage Ltd [2004] All ER (D) 15 (Jun) EAT, the Employment Appeal Tribunal upheld a tribunal chair's decision that the employer had made an unlawful deduction from wages when it withheld company sick pay because it had reached a perverse conclusion that the employee's illness was not genuine.
An employer was not entitled to withhold sick pay from an employee who took sick leave because of anxiety and depression immediately after being disciplined for misconduct, notwithstanding a contractual clause excluding such entitlement where sickness was "due, or attributable, to his own misconduct", the EAT holds in Manchester City Council v Thurston.
In Beveridge v KLM UK Ltd [2000] IRLR 765 EAT, the EAT held that when an employee is fit and willing to work, the employer is obliged to pay the employee his or her normal wages or salary unless there is an express term in the contract of employment authorising the employer to withhold pay in certain defined circumstances.
A compromise to settle an employee's claim for compensation for unfair dismissal, reached during the employment tribunal proceedings and recorded by the tribunal in a document headed "Decision of the [employment] tribunal", did not prevent the employee from subsequently bringing proceedings in the county court for unpaid wages, holds the Court of Appeal in Dattani v Trio Supermarkets Ltd.
In Robertson v Blackstone Franks Investment Management Ltd, the Court of Appeal holds that an investment consultant suffered unlawful deductions from his wages when commission earned in respect of work done before his contract was terminated, but payable after termination, was not paid.
The posting in a factory of a notice which stated that accrued holiday pay would not be given to employees dismissed for gross misconduct did not amount to the requisite written notification to the workers of a contractual term authorising a deduction from their wages, holds the EAT in (1) Kerr v The Sweater Shop (Scotland) Ltd (2) The Sweater Shop (Scotland) Ltd v Park.
An employer was contractually entitled to make changes to an incentive bonus scheme without the consent of employees individually or their trade union representatives, holds the EAT in Airlie and others v City of Edinburgh District Council.
Where employees argue that they have not received the full pay to which they are entitled and that this amounts to an unlawful deduction under the Wages Act, the industrial tribunal must first determine any dispute about what wages are properly payable under the contract, the EAT confirms in Yemm and others v British Steel plc.
In Discount Tobacco & Confectionery Ltd v Williamson [1993] IRLR 327 EAT, the EAT upheld an employment tribunal's decision that in order for a deduction to be lawful, it is not sufficient that the employee gives written consent before the deduction is made. The employee's written agreement must have been given before the conduct or event giving rise to the deduction.
Employment law cases: HR and legal information and guidance relating to unauthorised deductions from pay.