Hellewell and Another v Axa Services Ltd and Another: EAT 25 Jul 2011

EAT UNLAWFUL DEDUCTION FROM WAGES
The Claimants made claims against their employer for an unlawful deduction from their wages contrary to the provisions of section 13 of the Employment Rights Act 1996, in respect of money due under its bonus scheme for the years 2009 and 2010. The Claimants had been dismissed by reason of gross misconduct by the end of April 2010. The Employment Tribunal held that because the Claimants had been dismissed by reason of gross misconduct they were not entitled to receive their bonuses.
The Claimants appealed.
Held:
Dismissing the appeal because: –
1. A decision to pay or not to pay a bonus does not constitute ‘a deduction from wages’ so as to engage the consent provisions in section 13 (1) of the Employment Rights Act 1996 (‘ERA’);
2. For there to be a deduction for the purposes of section 13 (3) of the ERA, there has to be a sum to which an employee has some legal but not necessarily contractual entitlement from which the deduction could be made;
3. There is therefore an exercise which has to be completed before section 13(1) and (2) could apply with the preliminary stage being considering whether there is a sum legally payable in accordance with section 13(3) and it is only if the answer is in the affirmative that there has to be a consideration as to whether there is a deduction from that sum so as to invoke sub-sections (1) and (2) of section 13;
4. The defendant’s bonus schemes for 2009 and 2010 did not amount to a variation of contract so as to engage section 13(5) ERA; and
5. The Claimants were not entitled to their bonuses for 2009 and 2010 and there had been no deduction of their wages.

Judges:

Silber J

Citations:

[2011] UKEAT 0084 – 11 – 2507

Links:

Bailii

Statutes:

Employment Rights Act 1996 13

Jurisdiction:

England and Wales

Employment

Updated: 16 September 2022; Ref: scu.442200