Mr R Mumford v Helston Garages Group Ltd: 1400622/2022
EMPLOYMENT TRIBUNALS
Case No 1400622/2022
Between
Mr R MumfordClaimantHelston Garages Group LtdRespondent
Before
Employment Judge BeltonIn person for claimantMr Brittenden (instructed by counsel) for respondentDate 15 December 2022
JUDGMENT
The Claimant’s claim for unlawful deduction from wages is dismissed.
REASONS
1.1 This is the decision in the case of Mr R Mumford v Helston Garages Group Ltd 1400622/2022.[1]The claim 1.2 By a Claim Form dated 15 February 2022, the Claimant brought a complaint of breach of contract, whistleblowing and unlawful deduction from wages. 1.3 The complaints of whistleblowing and breach of contract were withdrawn by the Claimant on 23 May 2022.[2]The evidence2.1 I heard oral evidence from the Claimant and, for the Respondent, I heard from Mr Glanville.2.2 The following documents were produced at the commencement of the hearing; a) Hearing bundle comprising of 93 pages (including index); b) Respondent’s witness statement comprising of 4 pages; c) Claimant’s witness statement comprising of 4 pages; and I was also provided with a skeleton argument on behalf of the Respondent.[3]The issues 3.1 The issues in the case were as follows: Unauthorised deductions (Part II of the Employment Rights Act 1996) a) Did the Respondent make unauthorised deductions from the Claimant’s wages and if so how much was deducted? b) Was any deduction required or authorised by statute? c) Was any deduction required or authorised by a written term of the contract? d) Did the Claimant have a copy of the contract or written notice of the contract term before the deduction was made? e) Did the Claimant agree in writing to the deduction before it was made? f) How much is the Claimant owed?[4]Findings of fact4.1 I find the relevant findings of fact on the balance of probabilities. I attempted to restrict my findings to matters which were relevant to a determination of the issues. Page numbers of the bundle have been cited in this Judgment in square brackets.4.2 The Claimant commenced working for the Respondent on 6 April 1998.4.3 The Claimant’s contract of employment dated 6 April 1998 [52] makes no reference to commission.4.4 An updated contract of employment from 2004 states the amount of the Claimant’s salary “plus commission”. There is no further reference to how commission is calculated or paid [53].4.5 The Respondent contends that the Claimant was provided with an updated contract in 2014 and 2017. The Claimant denies this. The Respondent was unable to evidence a signed copy or evidence that such contracts were issued to the Claimant. In my judgment, I have therefore not taken into account what was specified in those later contracts in respect of commission.4.6 The Claimant admitted that the commission metrics changed over the years and that the Respondent has discretion to vary the scheme but he had “hoped” that this was with agreement however conceded that this was not necessarily the case.4.7 Prior to 2020, the last Pay Scheme signed by the Claimant was dated 25 March 2016 [54b-c]. In that Scheme it states he will receive a “variable pay element” “based on performance against set criteria for the previous quarter” and that “at the beginning of every quarter the sales exec will be given a series of targets”. It also stated that “Helston Garages Ltd reserves the right to amend or vary the scheme by giving at least 30 days’ notice”.4.8 In January 2020 the Claimant was presented with a new quarterly Commission Scheme [55-56] to take effect in April 2020 and which he objected to [63].4.9 The Respondent business was closed from March 2020 due to the pandemic and the Claimant was furloughed and returned to work in August 2020.4.10 At this point the Commission Scheme changed again to a monthly commission scheme rather than a quarterly one. The Claimant was not given 30 days’ notice. This was not the same scheme that had been given to him in January 2020.4.11 From August 2020, the Claimant submitted monthly spreadsheets upon which the terms of the scheme are repeated, and he was paid commission under that scheme accordingly.4.12 In May 2021 the Claimant formally raised his concerns about the commission scheme and on 21 May 2021 a formal meeting was held with the Claimant [65-67].4.13 On 2 June 2021 the Respondent wrote to the Claimant and stated that he will revert to the previous scheme backdated to 24 August 2020 and he was served with three months’ notice of a new commission scheme to take effect in September 2021 [71].4.14 On 7 June 2021 the Claimant stated that he did not accept the latest commission structure [72].[5]The Law 5.1. Section 13(1) of the Employment Rights Act 1996 provides that an employer shall not make a deduction from wages of a worker employed by him unless 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 the worker has previously signified in writing his agreement or consent to the making of the deduction. An employee has a right to complain to an Employment Tribunal of an unlawful deduction from wages pursuant to Section 23 of the Employment Rights Act 1996. 5.2. Section 13(3) Employment Rights Act 1996 provides: “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.” 5.3. In relation to implied terms, whether a particular term should be implied into a contract is a question of law and a court will look at the presumed intention of the parties at the time that the contract was made (Casson Beckman and Partners v Papi 1991 BCC 68, CA). 5.4. In Ali v Petroleum Co of Trinidad and Tobago 2017 ICR 531, PC, Lord Hughes explained that: ‘A term is to be implied only if it is necessary to make the contract work, and this it may be if(i) it is so obvious that it goes without saying (and the parties, although they did not, ex hypothesi, apply their minds to the point, would have rounded on the notional officious bystander to say, and with one voice, “Oh, of course”) and/or(ii) it is necessary to give the contract business efficacy. Usually the outcome of either approach will be the same. The concept of necessity must not be watered down. Necessity is not established by showing that the contract would be improved by the addition. The fairness or equity of a suggested implied term is an essential but not a sufficient precondition for inclusion. And if there is an express term in the contract which is inconsistent with the proposed implied term, the latter cannot, by definition, meet these tests, since the parties have demonstrated that it is not their agreement.’ 5.5. The traditional requirement for the implication of terms by custom and practice is that the custom in question must be reasonable, notorious and certain (Sagar v H Ridehalgh and Son Ltd 1931 1 Ch 310, CA). This means that the custom must be generally established and well known; and that it must be clear cut.[6]Conclusions 6.1. Due to The Deduction from Wages (Limitation) Regulations 2014 (SI 2014/3322) I cannot consider complaints of unlawful deduction from wages that occurred prior to 15 February 2020. 6.2. It is admitted by the Claimant that there is no express term of his contract of employment to identify how commission is calculated and paid. 6.3. I therefore have to consider whether there was an implied term. 6.4. As the initial contract of employment is silent on commission, I do not find that there was a presumed intention at the point of entering into the contract how commission would be calculated and paid. 6.5. I also do not find that it is necessary for the contract to work that the specific terms of the commission scheme should be implied into the contract. 6.6. Although by custom and practice the commission schemes have always been in existence, by the Claimant’s own evidence, they can be varied and during his employment the schemes “have changed many times over the years”. 6.7. I therefore find that the commission scheme was not an implied term of the Claimant’s contract of employment as the scheme was not certain and clear cut. 6.8. Regardless of the incorrect notice given to the Claimant in relation to the scheme in August 2021, this makes no difference to my judgment. On the evidence before me the scheme is non-contractual and discretionary and therefore there is no recourse as a result of the Respondent’s failure to provide the stated notice. 6.9. On that basis I find that the commission payments were not “properly payable” in accordance with the Claimant’s contract of employment (as they were not an implied term of his contract) and therefore under section 13(3) Employment Rights Act 1996 there has been no unlawful deduction from wages.