Unlawful Deduction From Wages – The Claimant claimed sums that he said were due to him by way of unpaid bonus. His written contract of employment stated that any bonus was discretionary but there had been a further agreement regarding his bonus when he was promoted to General Manager in April 2015. The Respondent argued that the bonus remained discretionary; it had been intended that the Claimant would become a shareholding Director and would be paid these sums by way of dividend but, until that had been put into place, the monies due were advanced by way of Director’s loan. The ET held that the method by which the sums were paid to the Claimant did not detract from his entitlement (as agreed and as arising from custom and practice) to the bonus in question; on that basis, it upheld the Claimant’s unauthorised deduction of wages claim.
The Respondent appealed, contending the ET had failed to make the relevant findings of fact or carry out the requisite assessment to support any conclusion that the discretionary nature of the Claimant’s bonus entitlement had been varied (see the guidance laid down in Park Cakes Ltd v Shumba [2013] IRLR 800 CA); its decision failed to have regard to the unchallenged evidence adduced by the Respondent and, given the evidence of the loan payments made to the Claimant, its conclusion was perverse. In support of its arguments on appeal, the Respondent further raised the question whether the ET had jurisdiction to determine the Claimant’s claim given that subsection 27(2)(a) Employment Rights Act 1996 did not extend to loan payments.
Held : allowing the appeal
It was unclear whether the ET had made any finding as to whether there had been an express agreement in April 2015 that varied the previous discretionary quality of the Claimant’s bonus entitlement. In any event, it had failed to make the necessary findings of fact or to carry out the requisite assessment to support its decision that an entitlement had arisen from custom and practice and it had made no finding as to the nature of any agreement reached in April 2015, which was necessary in order to determine whether the payments made to the Claimant were in fact loans (and therefore excluded by subsection 27(2)(a) ERA ). The unauthorised deductions claim would be remitted to a differently constituted ET to determine afresh.
Citations:
[2019] UKEAT 197 – 18 – 1802
Links:
Jurisdiction:
England and Wales
Employment
Updated: 18 June 2022; Ref: scu.635819