Mr S Jagpal v Sandwell and West Birmingham Hospitals NHS Trust: 1305160/2023
EMPLOYMENT TRIBUNALS
Case No 1305160/2023
Between
MR SUKHBINDER JAGPALClaimantSANDWELL AND WEST BIRMINGHAM HOSPITALS NHS TRUSTRespondent
Before
Employment Judge N ClarkeMiss J. Twomey (instructed by Counsel) for respondentDate 5 March 2025
JUDGMENT
[1]The complaint about unlawful deduction of wages is unfounded and dismissed.
REASONS
[2]I heard the evidence in this case on 31 January 2025 and reserved judgment, indicating that we would give our decision by way of these written reasons.[3]References to the bundle have the prefix “BP”. Claims and Issues[4]I discussed and agreed the Issues with the parties at the outset of the hearing. They were:a. A. Did the Claimant’s sickness absence from work from 31 January 2023 qualify as “absence caused by injuries diseases, or other health conditions that are wholly or mainly attributable to the employee’s NHS employment and which have been sustained or contracted in the discharge of the employee’s duties of employment..”?b. B. If so, what should he have been paid?c. C. Was the Claimant paid less than he was owed?d. D. Was any deduction required or authorised by a written term of the contract?e. E. Did the Claimant have a copy of the contract or written notice of the contract term before the deduction was made?[5]I explained that these were the only issues I would determine.[6]The Respondent’s case was that:6.1 The Claimant’s contractual entitlement to sick pay was one month’s full pay and two months half pay in his first year of service.6.2 That the Claimant had a period of sickness in October/November 2022.6.3 That he was only, therefore, entitled to half pay from the commencement of his sickness absence on 31 January 2023.6.4 That he had been overpaid, in error, in January and February 2023.6.5 That the overpayment had been recouped in part by a deduction in the March 2023 payment.6.6 That the remaining part of the overpayment was outstanding.[7]The Claimant’s case was that his absence was due to work-related stress and so he should have continued to receive full pay “in subsequent months”. (ET1, BP8)[8]During the course of his evidence, the Claimant averred that his entitlement to sick pay should have “started afresh for February, so I should have been paid full pay in February and half pay for March and April [2023”. This was a different basis to his pleaded case, and so one of the Respondent’s witnesses had to be re-called. In the interests of completeness and finality, I also determined that issue. Law The law is set out in Appendix 1.
Procedure
[10]There was a file of documents of 442 pages, some of which was marked “not agreed”. Apart from the Claimant stating that one document was wrongly placed in the “Claimant’s disclosure” of the file, which did not seem to me to be material, neither party raised any issue with the file before me.[11]I asked the parties to proceed on the basis that I had read the pleadings, the witness statements and any documents expressly referred to in those documents. If either party wanted us to consider other documents, then I would have to be taken to them in evidence or submissions.[12]I considered the witness statements from the Claimant and Mr Grigg and Ms Towe for the Respondent. All witnesses gave live evidence.[13]Both parties made closing submissions.
Findings of Fact
[14]I made the following findings of facts on the balance of probabilities. Where a fact was in dispute, I explain why I made the particular finding. Where it was not in dispute then it is recorded without further comment. I did not make findings on every fact in dispute, but only those relevant to the issues in the claim.[15]The parties’ relationship, was governed by a contract of employment (BP 92), which was sent to the Claimant before it commenced on 5 September 2022. The contract incorporated the following terms:15.1 15. Deductions from Pay. The Trust reserves the right to make all deductions required by law or as a result of salary overpayment (i.e. anything in excess of contractual pay entitlement)15.2 17. Sickness Absence. Sickness absence is managed in accordance with the Trust’s Sickness Absence Policy And this is your responsibility to ensure that you adhere to local reporting and operational arrangements as detailed in the policy and as communicated to you locally…15.3 Occupational Sick Pay. Occupational Sick pay Based on reckonable service as set out in Section 5. Further details can be obtained in the Agenda for Change Terms and Conditions of Service Handbook. Payment, subject to adherence to the correct notification of absence, is as follows: During the first year of service: One month’s full pay in two months half pay[16]The Contract also incorporated the “Agenda for Change” (BP266). (The Claimant agreed that there was no material difference between the version in the bundle, which was a 2024 document, and the one that applied at the relevant time.) The material parts are:16.1 14.2. Employees absent from work owing to illness will be entitled, subject to the conditions of this agreement, to receive sick pay in accordance with the scale below …: - during the first year of service - one month’s full pay in two months’ half pay16.2 14.7. The period during which sick pay should be paid on the rate of sick pay for any period of absence is calculated, by deducting from the employee’s entitlement on the first day of sickness, the aggregate periods of paid sickness absence during the 12 months immediately preceding that day. In aggregating periods of absence due to illness the following absences will be disregarded: - unpaid sick absence - absence caused by injuries, diseases, or other health conditions that are wholly or mainly attributable to the employee’s NHS employment and which have been sustained or contracted in the discharge of the employee’s duties of employment, as defined in paragraph 22.3.16.3 22.3. Eligible employees who have injuries, diseases or other health conditions that are wholly or mainly attributable to their NHS employment, will be entitled to an injury allowance, subject to the conditions set out in this section. The injury, disease, or other health condition must have been sustained or contracted in the discharge of the employee’s duties of employment or injury that is not sustained on duty but is connected with or arising from the employee’s employment.16.4 22.5. Employees claiming injury allowance are required to provide all relevant information, including medical evidence, that is in their possession or that can reasonably be obtained, to enable the employer to determine the claim.[17]The Claimant had a period of sickness absence from 6 October to 25 November 2022 and then from 31 January 2023 and continuing thereafter. He has not returned to work.[18]In terms of salary and payments:18.1 In January and February 2023, the Claimant’s payslips show full gross salary and he was paid his full net pay.18.2 In March 2023, his payslip shows SSP of £809.01, Basic Pay of -£1468.25 and “Gross Overpayment” of £1468.25. The net pay figure is £627.96, but the Claimant was not paid at all for that month.18.3 The payslip for April 2023 shows SSP only.[19]On around 6 February 2023, the Claimant submitted a MED3 Statement of Fitness for Work to the Respondent, which stated that the Claimant was not fit for work due to “Stress at work” from 31 January 2023 until 28 February 2023.[20]In recording this absence on the electronic records (known as ESR), Warren Grigg, the Claimant’s line manager at the time, ticked a box headed “Work Related” (see BP 262). I accept his explanation that he did this, and because the MED3 stated “Stress at work” because:20.1 I found him to be a credible witness. His oral evidence was consistent with his written evidence. He made appropriate concessions, such as accepting that he had made an error by ticking “Work related” and that he should “in retrospect” have looked into the consequences of his subsequent unchecking of that box.20.2 There is an obvious connection between the words, “Stress at work” on the MED3 and “work related” on ESR, and I can understand how one might lead to the other.20.3 ESR has, (BP262), a number of boxes to consider. I can see that it would be easy to check a box without giving much thought to the reason or possible consequences.20.4 I do not accept that there was a conspiracy to push the Claimant out of the business, not least because he remained employed, but not working at the time of the hearing. I accept Mr Grigg’s evidence that the Respondent wants the Claimant to come back to work, not the other way round.[21]I also accept Mr Grigg’s evidence that he was not making an assessment of Injury Allowance when he ticked the “work related” box because:21.1 As I have already observed, I found him to be a credible witness and accept this part of his evidence.21.2 Injury Allowance is a “top up payment” that tops up sick pay to 85% of pay (BP208 and the evidence of Miss Towe).21.3 The application process for Injury Assessment (BP140) provides that(i) Employees should apply in writing detailing the reasons and providing supporting documents,(ii) a manager must investigate the application and gather appropriate documentation for submission to the relevant Group Director and(iii) the Group Director or equivalent will make a decision. None of these steps had taken place: the Claimant had not applied for Injury Allowance or provided any documentation in support of any application, a manager had not investigated the application and a Group Director had not made a decision on the application.21.4 It is inherently unlikely that Mr Grigg would have intentionally allowed Injury Allowance for the Claimant without following proper process. It represented significant cost to the Respondent (and value to the Claimant) compared to ordinary sick pay. Mr Grigg would not have made such a significant decision lightly and without authority.[22]The Claimant relies on an email of Lakhbir Kaur (BP 147) of 3 May 2023, who states, “the absence was first recorded as work related – giving him a new entitlement to sick pay. … The impression I got was that his sickness was due to work related issues and therefore he has not been overpaid.”[23]I accept Miss Towe’s evidence that the statement by Lakhbir Kaur that the Claimant, “has not been overpaid” must be incorrect because:23.1 I found her to be a credible witness. Her oral evidence was consistent with her witness statement and she also made sensible concessions, such as conceding that she did not understand why the payment in February had gone through as a 100% payment, rather than 85%, which would have been the Injury Allowance rate.23.2 I was not taken to any other policy or process upon which the Claimant would be entitled to full pay, other than Injury Allowance.23.3 There is an obvious connection between “work-related” in ESR and “injuries attributable to employment” in the Injury Allowance policy.23.4 It follows that the only likely basis on which the Claimant could have been entitled to more than sick pay was if Injury Allowance applied.[24]For whatever reason, and like Miss Towe, I do not understand it, the Claimant was paid full pay in January and February 2023. If he had been paid Injury Allowance, this ought to have been 85% of his pay.[25]Mr Grigg later realised his mistake and on around 7 March 2023 unchecked the “work-related” box. This caused the payroll system to generate a gross overpayment and to deduct some of this from the Claimant’s March 2023 wages, being the deduction of £880.95.[26]There were various discussions between the Claimant and his colleagues thereafter which do not bear on the issues under consideration here.
Conclusions
[27]The Claimant was not, in my judgment, entitled to full pay in respect of his sickness absence from 31 January 2023 for the following reasons:27.1 He was in his first year of service and sick pay entitlement was, under the contract, 1 month’s full pay and 2 months’ half pay.27.2 The method of calculation under the contract was to consider the, “12 months immediately preceding” the first day of sickness. The Claimant had a period of more than one month’s sickness in the 12 months before 31 January 2023 (being the period of sickness absence in October/November 2022) and so his entitlement to full pay had expired.27.3 Whilst the Agenda for Change made provision for Injury Allowance for “Eligible employees”, the Claimant had not applied for, been assessed or approved for Injury Allowance at that time and was, therefore, not entitled to it.[28]It also that there was no basis on which the Claimant’s sick pay entitlement should re-start in February 2023, as he asserted.[29]The Claimant complained about unfairness in his witness statement and in his questions of the Respondent’s witness Miss Towe. In his closing submissions he said that the Respondent had been unreasonable. However, in my judgment, fairness and reasonableness have no application to the question of what wages he was owed. That comes down only to application of the terms of the contract.[30]Why the Claimant was paid full pay from 31 January 2023 is not clear to me, or to the witnesses, but the reason is immaterial. The important point is that he was paid more than he was entitled. That must have been, I conclude, the result of a mistake; for the reasons I have already stated - I do not believe that it was part of some wider conspiracy by the Respondent.[31]The consequence, I conclude, is that the Claimant was paid more wages than he was contractually obliged to. The Claimant was paid full pay for 31 January and all of February 2023 when he was not entitled to it.[32]The deduction in March 2023 was, I conclude, for the purpose of reimbursing the Respondent in respect of the overpayment of wages because:32.1 The Claimant had been overpaid, for the reasons I have already outlined.32.2 Mr Grigg’s unchecking of the “work related” box on ESR had the effect of prompting the payroll system to recoup the overpayment.32.3 The deduction of £880.95 from the March 2023 pay period was, on any view, less than the overpayment, but as much as could lawfully be recouped at that time.[33]That deduction is, therefore, within the exception provided by section 14 ERA, being reimbursement of the Respondent in respect of overpayment of wages.[34]For the avoidance of doubt, there were no other deductions. By the April pay period, the Claimant’s entitlement to contractual sick pay had expired.[35]Even is section 14 ERA does not apply, the Respondent was entitled to make the deduction under section 13 in my judgment because:35.1 Clause 15 of the contract allowed the Respondent to make deductions in respect of salary overpayment. That was a relevant provision of the contract under section 13(1)(a) ERA.35.2 The deduction was in respect of a salary overpayment for the reasons already given.35.3 The Respondent did not need the Claimant’s agreement or consent, which only applies under section 13(1)(b).[36]The claim for unlawful deductions is therefore unfounded and dismissed. EJ N. Clarke 5 March 2025 APPENDIX 1 LAW Unlawful Deduction of Wages
LAW
[1]Section 13 of the Employment Rights Act 1996 provides: 13.— Right not to suffer unauthorised deductions.(1) An employer shall not make a deduction from wages of a worker employed by him unless— (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction.(2) In this section “relevant provision” , in relation to a worker's contract, means a provision of the contract comprised— (a) (a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or (b) (b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.(4) Subsection (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion.(5) For the purposes of this section a relevant provision of a worker's contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect.(6) For the purposes of this section an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified.[2]Section 14 provides: Excepted deductions. (1)Section 13 does not apply to a deduction from a worker’s wages made by his employer where the purpose of the deduction is the reimbursement of the employer in respect of— (a)an overpayment of wages, or .. made (for any reason) by the employer to the worker.[3]There is no distinction to be drawn between a deduction from a sum due and nonpayment of that sum. Delaney v Staples (t/a De Montfort Recruitment) 1991 ICR 331, CA.[4]A ‘deduction’ under S.13(3) ERA does not include deductions that are the result of an error of computation. This is because S.13(4) states that S.13(3) ‘does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion’.[5]“Error of computation” means a mistake, something incorrectly done through ignorance or inadvertence, which affects the way the employer ascertains, by a process of counting and calculation, the gross amount of wages properly payable to the worker, Morgan v West Glamorgan County Council 1995 IRLR 68, EAT. In that case There was no error of computation because the deficiency in the employee’s wages was attributable to a considered and deliberate decision by the employer to demote him. The EAT said that deductions made in consequence of a deliberate, albeit legally erroneous, decision are not deductions in consequence of an error of computation.[6]The question of what wages are ‘properly payable’ to the worker under S.13(3) of the Employment Rights Act 1996 (ERA) is critical to determining whether an unlawful deduction has been made. Deciding whether wages are ‘properly payable’ will require the Tribunal to resolve any disputes as to the meaning of a contract, including questions of interpretation and implication, Agarwal v Cardiff University and anor 2019 ICR 433, CA.[7]Section 13(1)(a) ERA permits deductions where they are authorised by ‘a relevant provision of the worker’s contract’. This phrase is defined in S.13(2) as a provision contained in one or more written contractual terms of which the employer has given the worker a copy before the deduction is made.[8]Section 13(2)(a) is satisfied if the employer gives a copy of the contract containing the relevant term to the worker. There is no requirement under section 13(2)(a) that the worker’s attention is drawn to the specific contractual provision(s) authorising the deduction. Section 13(2)(b), by contrast, provides that the employer must notify the worker about the existence and effect of the specific term(s).
Law
[9]For the purposes of the S.14(1) exception, there is no limitation either as to the amount that may be recovered or the period of time within which any recovery can be made — Key Recruitment UK Ltd v Lear EAT 0597/07.