Delaney v Staples: HL 15 Apr 1992

The claimant had been dismissed but had been given no payment in lieu of notice. She claimed to the Industrial Tribunal that this was an unlawful deduction from her wages and that therefore the Industrial Tribunal had jurisdiction.
Held: The claim was a claim in contract, and as such had to be presented to the County Court. ‘Wages’ were a payment for services rendered through the employment. A payment in lieu of notice arose from the termination of the employment contract not from a request for payment for services done, rather than to the provision of services by the employee, and were not ‘wages’. The industrial tribunal had no jurisdiction to deal such a claim. At the same time the Secretary of State should consider extending the jurisdiction of the tribunals to allow such claims.
Lord Browne-Wilkinson set out the four ‘principal categories’ of payment in lieu of notice in the following terms: ‘(1) An employer gives proper notice of termination to his employee, tells the employee that he need not work until the termination date and gives him the wages attributable to the notice period in a lump sum . . (2) The contract of employment provides expressly that the employment may be terminated either by notice or, on payment of a sum in lieu of notice, summarily. In such a case if the employer summarily dismisses the employee he is not in breach of contract provided that he makes the payment in lieu . . (3) At the end of the employment, the employer and the employee agree that the employment is to terminate forthwith on payment of a sum in lieu of notice . . (4) Without the agreement of the employee, the employer summarily dismisses the employee and tenders a payment in lieu of proper notice . . The employer is in breach of contract by dismissing the employee without proper notice. However, the summary dismissal is effective to put an end to the employment relationship . .’ In construing the definition of ‘wages’ 1986 Act 1986 Lord Browne-Wilkinson said that ‘it is important to approach such definition bearing in mind the normal meaning of that word’ and ‘bearing in mind the normal meaning of that word. I agree with the Court of Appeal that the essential characteristic of wages is that they are consideration for work done or to be done under a contract of employment. If a payment is not referable to an obligation on the employee under a subsisting contract of employment to render his services it does not in my judgment fall within the ordinary meaning of the word ‘wages’. It follows that if an employer terminates the employment (whether lawfully or not) any payment of wages in respect of the period after the date of such termination is not a payment of wages (in the ordinary meaning of that word) since the employee is not under obligation to render services during that period.’

Lord Browne-Wilkinson
Gazette 15-Apr-1992, [1992] 2 WLR 451, [1992] 1 AC 687, [1992] ICR 483
Employment Protection (Consolidation) Act 1978 49, Wages Act 1986 7
England and Wales
Appeal fromDelaney v Staples CA 1991
Any failure by an employer to pay any amount of wages properly payable to an employee amounts to a deduction from his wages for the purposes of section 7. The basic object of the 1986 Act is ‘to see that workers receive their wages in full at the . .

Cited by:
CitedKrasner v McMath; in Re Huddersfield Fine Worsteds Limited CA 12-Aug-2005
The administrators had adopted the contracts of certain employees, who now claimed that the protective awards should have priority to the expenses of the administration.
Held: The payments did fall within paragraph 99(5) and do not have . .
CitedOxfordshire County Council v Oxford City Council and others HL 24-May-2006
Application had been made to register as a town or village green an area of land which was largely a boggy marsh. The local authority resisted the application wanting to use the land instead for housing. It then rejected advice it received from a . .
CitedRevenue and Customs v Stringer, Ainsworth and Others HL 10-Jun-2009
In each case, the employee had retired after long term sickness. The Employment tribunal had upheld their ability to claim arrears of sickness pay arising under the 1998 Regulations, as an unlawful deduction from their wages. They now appealed . .
CitedCalor Gas Ltd v Dorey EAT 26-Sep-1997
The employee had complained of unfair selection for redundancy. The effect of a letter dismissing him with notice was questioned.
Held: The appeal was allowed. The Tribunal had erred in not allowing that there might be alternative situations . .
CitedBirmingham City Council v Abdulla and Others SC 24-Oct-2012
Former employees wished to argue that they had been discriminated against whilst employed by the Council. Being out of time for Employment Tribunal Proceedings, they sought to bring their cases in the ordinary courts. The Council now appealed . .
CitedDiscount Tobacco and Confectionary Ltd v Williamson EAT 12-Jan-1993
The company appealed against a finding that they had made an unlawful deduction from the claimant’s salary. He was manager of a store where there had been shortfalls of stock, and had deducted part of its value from his salary on dismissing him. . .

Lists of cited by and citing cases may be incomplete.


Updated: 30 November 2021; Ref: scu.79889