EAT Unlawful Deduction From Wages – The principles enunciated in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 1979 and re-stated in Lordsvale Finance PLC v Bank of Zambia [1996] QB 752, Alfred McAlpine Capital Projects v Tilebox Ltd [2005] EWHC 281 TCC, [2005] BLR 271 and Murray v Leisureplay PLC [2005] EWCA Civ 963, [2005] IRLR 946 are relevant to the issue of unlawful deductions from wages, because if the sum is a penalty then its deduction cannot be lawful; guidance offered to Employment Tribunals on their application. Here the Employment Judge had struck down a recoupment of expenses provision as a penalty but on the wrong basis. He did not address the position at the time the contract was entered into but at the time of breach. Moreover, he never considered whether there was an extravagant or unconscionable gulf that existed between the maximum amount that could be recovered in a common-law action for damages for breach of contract as opposed to the sum stipulated in the agreement.
Hand QC J
[2013] UKEAT 0440 – 12 – 0810
Bailii
England and Wales
Citing:
Cited – Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd HL 1-Jul-1914
The appellants contracted through an agent to supply tyres. The respondents contracted not to do certain things, and in case of breach concluded: ‘We agree to pay to the Dunlop Pneumatic Tyre Company, Ltd. the sum of 5 l. for each and every tyre, . .
Cited – Lordsvale Finance Plc v Bank of Zambia QBD 20-Mar-1996
The court looked at a facility agreement opened by a bank in favour of the defendant which provided that in the event of default the defendant should pay interest during the period of default at an aggregate rate equal to the cost to the bank of . .
Cited – Alfred Mcalpine Capital Projects Ltd v Tilebox Ltd TCC 25-Feb-2005
Validity of penalty clause. . .
Cited – Murray v Leisureplay Plc CA 28-Jul-2005
The court considered the extent to which the content of negotiations leading up to the signing of a contract were admissible. Arden LJ said: ‘Lord Dunedin in the Dunlop case makes the point that, although the issue is one of construction, the court . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 01 November 2021; Ref: scu.518531
