Ms E Wise v First Thought Care Services: 1403683/2023
JUDGMENT
[1]The Respondent’s application for an extension of time to file the ET3 is granted. The Respondent had filed the ET3 prior to this hearing.[2]The complaint of unauthorised deductions from wages contrary to Part II Employment Rights Act is well-founded. The Respondent made unauthorised deductions in respect of holiday pay between January and March 2023.[3]The Respondent is ordered to pay the Claimant the gross sum of £1,293.27 comprising holiday pay deductions of £793.27 and a training fee of £500.REASONS
[1]By Claim Form received on 6 June 2023 the Claimant brought claims for unauthorised deductions from her wages. She claimed that deductions for over-taken holiday exceeded the sum the Respondent was entitled to deduct, and that £500 for training had been deducted, which she did not believe the Respondent was entitled to do, as she had not signed a contract of employment.[2]The date of ACAS notification was 17 April 2023 and the Certificate was issued on 29 May 2023. Taking 27 February 2023 as the effective date of termination of employment (see below), the claim is brought in time.[3]The Claimant failed to pass her probation period and was dismissed. She had commenced her employment with the Respondent on 20 October 2022. A meeting took place on 27 February 2023, where the Claimant was told she would be dismissed. She was told not to return to work, but was given 4 weeks pay in lieu of notice. She had understood that her employment ended on 27 March 2023.[4]The Respondent did not initially provide a response to the claim. However on 25 August Ms Manhiri, the Respondent’s HR Quality and Compliance Manager, emailed the Tribunal. She stated that there had been unforeseen extenuating circumstances, namely that her brother, who lived in the United States, had died suddenly. She had been required to travel there and arrange for the repatriation of his body. She then took an extended period of leave to manage the funeral arrangements and address the emotional impact on her mental well-being. This was the reason she had missed the tribunal’s deadline of 13 July 2023 for a response to the claim. She was the only employee in HR. She requested an extension of time to serve a response. The Tribunal responded that an ET3 be submitted, and an application for an extension would be considered. An ET3 was filed and the application considered at this hearing.[5]In accordance with Rules 19 and 5 of the Employment Tribunals Rules of Procedure, the Respondent’s application for an extension of time for filing the response was granted. The Response had been received by the Tribunal before today’s hearing (precise date not known), and given the circumstances outlined by Ms Manhiri, supported by evidence, it was fair and reasonable in all the circumstances to allow the Respondent the opportunity to defend the claim.[6]In that Response, the Respondent stated that the Claimant’s last date of employment had been 27 February 2023, the date of the meeting where the Claimant was informed that she had failed her probation period. Her notice period was one week. The Claimant was placed on garden leave for that week. The Claimant was dismissed without notice. She was entitled to one week’s pay in lieu of notice. As a gesture of goodwill, the Claimant was given 4 weeks’ pay. However, that did not replace the contractual notice period of 1 week. The response made no reference to the training costs. Issues[7]The issues for me to determine are: a) When did the Claimant’s employment terminate? b) How much annual leave had she accrued to that date? c) How much annual leave had she taken? d) Has the Respondent made deductions beyond those which reflected over-taken annual leave, contrary to section 27 Employment Rights Act 1996 (ERA)? If so, how much? e) Did the Claimant receive a contract of employment? f) Was there a contractual agreement in respect of training costs recoverable by the employer and if so, in what circumstances? g) Did the Respondent make an unauthorised deduction from the Claimant’s wages contrary to section 13 ERA. Law[8]In accordance with section 27 ERA, holiday pay falls within the definition of ‘wages’. Section 13 ERA sets out an employee’s right not to suffer unauthorised deductions from wages. It states: 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.[9]Section 14 sets out excepted deductions which include an overpayment of wages, deductions in accordance with a relevant provision in the worker’s contract, or a deduction with the worker’s prior agreement signified in writing.Findings of Fact
[10]Both the Claimant and Respondent gave evidence. In respect of the date of termination of employment, the Claimant accepted that she was only entitled to one week’s notice. She said that would take her to 6 March 2023, making that the termination date. Mr Manhiri stated that the Respondent’s position was that the Claimant was dismissed without notice, and paid in lieu of her contractual week’s notice period. A copy of the Claimant’s unsigned contract was provided, which set out a notice period of 1 week during the probation period. As this was the same as the minimum entitlement to notice in accordance with section 86 ERA, I find that the Claimant’s notice period was one week.[11]I find that the Claimant’s contract was terminated without notice, and that the Respondent made good that breach of contract by paying the Claimant in lieu of notice. I find that the Claimant’s last date of employment was 27 February 2023.[12]It was agreed that the Claimant’s holiday entitlement was 28 days per year, to be calculated pro-rata for the period of her employment. The Claimant provided evidence, via text messages with the Respondent, that she had taken 90 hours leave during her employment. On checking the employer’s records, Ms Manhiri stated that the Claimant had in fact taken 93 hours, and that her entitlement was 78 hours. I find the employer’s record more likely to be accurate than the informal text message, and therefore will use the figure of 93 hours for leave taken.[13]The Claimant had provided pay-slips which evidenced deductions for holiday, said to have been taken above her pro-rata entitlement, as follows: Month to 14 January 2023 £288.46 Month to 14 February 2023 £72.12 Month to 14 March 2023 £731.14[14]It was agreed that the Claimant worked 37.5 hours/week and her annual gross salary was £37,500. Her weekly gross salary was £721.15.[15]The Claimant gave evidence that she had never been given a contract of employment. In respect of the training cost of £500 deducted from her March pay (evidenced by her pay-slip), she was not expecting that. She had signed something – she did not have a copy – which from memory did not say how much could be deducted. It referred to a deduction if she left the employer within 12 months.[16]The Respondent’s position was that in the period prior to Ms Manhiri joining the company, there had been no HR Manager. Ms Manhiri was handed a HR file for the Claimant, which included a contract, but it was not signed. She could not say whether a contract had been given to the Claimant or not. However, she said that the Claimant had been informed of the deduction of training costs by email. She sent the Tribunal the email chain, and a document signed by the Claimant relating to training.[17]The relevant email was sent by Jack Cook, the Managing Director, on 21 October 2022. That read: “Please note that as the course is fully paid for by myself – if you start/complete the course, there is a £500 fee chargeable should you choose to leave within the next 12 months”.[18]The document signed by the Claimant on 25 January 2023 was headed “Welcome to FTCS Team Teach Level 2”. The relevant sentence read: “In order for you to continue this course, we do have to have a signature to confirm that should you leave FTCS within the next 12 months, then a fee shall be deducted or made payable to FTCS”. No figure for the ‘fee’ was given in the signed document.[19]Ms Manhiri stated that the Claimant had been informed, via email, of the deduction that would be taken from her salary. The form which was signed related to different training, a cost which the Respondent was not seeking to recover.[20]The Claimant for her part had no recollection of the email. However she pointed out that she did not choose to leave the Respondent’s employment. Findings on claimed unauthorised deductions from wages Holiday[21]The Claimant was employed for 18.7 weeks (20 October 2022 to 27 February 2023). Calculating her pro-rata entitlement, the Claimant had accrued 10.1 days holiday during this period, calculated as follows: 28 days ÷ 52 weeks x 18.7 weeks = 10.1. This equates to 75.8 hours. I am aware that the employer calculated leave in hours, and its system shows a similar figure of 78 hours leave entitlement. I will adopt that figure for my calculation as it is no less favourable to the Claimant:[22]Leave accrued 78 hours Leave taken 93 hours Difference 15 hours Claimant owes Respondent £288.46 (721.15 ÷ 37.5 x 15)[23]Respondent has deducted £1,081.73 (721.15 + 72.12 + 288.46) Respondent owes Claimant £793.27 (1,081.73 – 288.46) Training fee[24]In respect of the training fee, I disregard the provision in the contract relating to this, as I have found that the Claimant was not given a contract of employment. She therefore cannot be said to have agreed to any deductions contained therein. This approach accords with section 14(4)(a) ERA, which states that a section 13 deduction does not apply if the worker has not signified their agreement or consent in writing. In the absence of a signed contract, the 14(4)(a) exception applies.[25]Moving to section 13(1)(b) ERA, a deduction is authorised if a worker has signified their agreement to it in writing. The Claimant signed the document referred to above, however that did not state a cost, and further, the Respondent gave evidence that the signed document did not relate to the deduction which was made. That document is not therefore relevant to the sum in dispute.[26]There is nothing else signed or agreed to in writing by the Claimant. Whilst the Respondent relies on the fact she was informed of the deduction by email, there are two reasons why I am unable to accept that email as justification for the deduction. First, the Claimant did not ‘signify her agreement in writing’. Her reply to that email said that she had completed the form requested. It made no reference to reimbursement of the training fee. Further, the fee was said to be required to be repaid if the Claimant chose to leave. It is not disputed that she was dismissed, meaning that she did not choose to leave.[27]I find that the deduction of £500 for the training fee was an unauthorised deduction.