Mr D A Hughes v DWF Costs Ltd: 2415334/2018
JUDGMENT
The judgment of the Tribunal is that the claims for unlawful deduction of wages and breach of contract both fail and are consequently dismissed.REASONS
[1]On the face of the ET1 of the claimant (and I ought to say that he is not in attendance today) he has made a claim for both unlawful deduction of wages and breach of contract. I have considered all the evidence put before me including a witness statement from Mr Hughes which was on the file this morning, an extensive bundle of documents of which I have read the relevant documents from that bundle, and two statements: one from Mrs Charlwood and one from Miss Lunt. There has been no cross examination of any of the witnesses.[2]I ought to mention one jurisdictional issue to be dealt with. The claimant made two claims, one of which was withdrawn because it was simply a duplicate claim, but both claims were made before Mr Hughes’ employment formally finished with DWF Costs Limited. The first ET1 was issued on 28 September 2018 and the second on 23 October 2018, and the claimant did not leave the respondent company until 30 October 2018.[3]The claimant, if he had been in attendance, could have made an application to me to add his claim for breach of contract now that he has left the respondent’s employment. Out of an abundance of caution, I have dealt with both claims.[4]The Facts[5]The facts are very straightforward. I suspect that if all parties had been in attendance there would be very little dispute over many of the facts and cross examination would not, I suspect, have taken very long. It is clear that the DWF Flexible Benefit Scheme does not include any entitlement to bonus. DWF Bonus Scheme is a discretionary non contractual bonus scheme. The bonus award principles make it clear that published eligibility criteria apply and the respondent company were at pains to make sure that all its employees had access on the intranet to all the information they need with regard to both pay review and also the bonus scheme.[6]I find that the claimant had that access but often did not read the documents as carefully as perhaps he should have done. In particular and for example all employees were sent, on 21 June 2016, a communication directing them to the pay review and bonus award hub. That is what a good employer should do and these employers have.[7]In that regard I note that the claimant's claim in the ET1 relates only to the bonus and not to the pay review, but even it if did, I decided to deal with both issues. The outcome in this Judgment is the same.[8]Each year the guide to pay review and bonus was produced by the respondent company for its employees. On 16 March 2018 all employees, including the claimant, were sent a communication headed, “Introducing the financial year 2017/2018 bonus”. In that document it was made clear that the discretionary mechanism was evolving. However, although the scheme was tweaked it was made clear to the employees that the usual eligibility criteria applied and that employees with a mere click of the button through the hyperlink could get the necessary information about the criteria, again on the intranet.[9]On 16 July 2018 the claimant gave his notice. By giving his notice, he immediately took himself out of both the pay review and the bonus scheme for that financial year, even though the end of his notice period was extended to 30 October 2018 by mutual agreement between the parties.[10]On 20 July 2018 the claimant was told he was not eligible for bonus and/or pay review. There is no evidence before me that the respondent company did not consistently apply the respondent company’s rules with regard to both those issues, indeed Alex Lunt told the claimant that they had complied with the rules on 3 August 2018.[11]There was an informal grievance meeting with Alex Lunt on 14 August 2018 because the claimant was upset that he was not getting his bonus. However, even then the claimant agreed he understood the issue with regard to the pay review and said the bonus “is my main gripe”. He went on to ask if the company will apply discretion. He confirmed at that point that all information with regard to the bonus scheme was available to him but said he did not read it thoroughly and accepted that might actually reflect badly upon him.[12]Mr Hughes then went through a formal grievance and appeal process. He was unsuccessful in both. The decision to reject the grievance at both stages, i.e. initially and at appeal, was on the following grounds:(1) The bonus scheme eligibility criteria had been communicated to the claimant;(2) Employees were required in their contracts to familiarise themselves with the scheme, that is clear at paragraph 3.2 of the contract and the terms and conditions;(3) Those rules made it clear he was not entitled [the claimant] to a bonus or pay review because he had served notice. That is clear from page 84 of the bundle;(4) The bonus scheme was not contractual;(5) The bonus payments were not guaranteed;(6) The bonus scheme was in place to encourage employees to stay with the company and;(7) The eligibility rules were not unfair, as Mr Hughes suggested, and the treatment by the company of the claimant was consistent with the treatment of other employees.[13]During the course of the grievance process I noted that the claimant understood the issue with regard to pay review and focused on fighting for his bonus. He said he understood the rules but wanted to see if there was, and again I quote “a way to apply discretion”.[14]Consequently, I find Mr Hughes knew the discretionary nature of the scheme, he accepted the relevant information had been sent to him and that with (in his words) hindsight he also looked through the documentation in detail only when he was going through the grievance process. At his appeal hearing when asked what his understanding of the bonus scheme was, he replied unequivocally it was discretionary.The Law
[15]Applying the law to those facts I had to decide whether the respondent had been in breach of section 13 of the Employment Rights Act 1996. I find that the claimant has been paid his correct wage with no illegitimate or unlawful deductions. The claimant has been paid what was in effect, as the section requires, a sum of money which was properly payable to him under his contract of employment.[16]Therefore, there has been no breach of the claimant’s employment rights relating to unlawful deduction of wages nor, if there is a claim for breach of contract, has there been a breach of contract. I dismiss both claims.