Mr B Warwick v David Greaves Ltd T/a David Greaves Landscape Design and Construction: 2600034/2019
EMPLOYMENT TRIBUNALS
Case No 2600034/2019
Between
Mr B WarwickClaimantDavid Greaves Ltd T/a David Greaves Landscape Design and ConstructionRespondent
Before
Employment Judge AhmedIn person for claimantMr James Bromige (instructed by Counsel) for respondentDate 8 August 2019
JUDGMENT
The judgment of the Tribunal is that the Respondent has made an unlawful deduction of wages and is ordered to pay to the Claimant £1,347.93 net.
REASONS
[1]By a claim form presented on 6 January 2019, Mr Ben Warwick brings a complaint of an unlawful deduction of wages.[2]The Claimant has throughout these proceedings represented himself and at this hearing was assisted by his father. The Respondents have been legally represented throughout and at the hearing were represented by Mr Bromige of Counsel. I would like to record my thanks at the beginning of this decision to Mr Bromige for his considerable assistance in explaining the Respondent’s pay systems and records without which it would have been difficult to understand the somewhat Byzantine system used by the Respondent. In most deduction of wages cases what is deducted (as opposed to what is never paid) is clearly discernible from the wage slips. In this case whilst there was undoubtedly a deduction the amount of that deduction does not appear anywhere on the payslips making the process unnecessarily difficult to follow.[3]In order to understand the payments and deductions, one has to go to page 62 of this hearing bundle which I shall refer to as the ‘spreadsheet’. I appreciate that is not the title of the document the Respondent uses. Mr Warwick was not supplied with a copy of this spreadsheet at any time during his employment but it is impossible to understand what the Respondent has done without this. The Claimant was only supplied a copy of it during mutual disclosure in the last week or so prior to this hearing. To make matters worse the copy in the bundle is almost illegible and I was supplied with a better copy for this hearing. I have no doubt it must have been difficult for Mr Warwick, a young man employed as a Gardener, to prepare his case. Page 1 of 6[4]I now turn to the facts of this case. The Respondent is a small landscape business run by Mr David Greaves and Mrs Libby Greaves. It employs 14 staff. Mr Warwick had been employed by the Respondent as a Landscape Gardener for about two and half years. He decided in September 2018 to leave and work for his father. One of the factors in his decision was the Respondent frequently calculating his wages and holiday pay incorrectly, which having heard this case I accept would be entirely plausible. When he often queried his pay he says the Respondent made life unpleasant for him. He submitted his notice of resignation (orally) giving 4 weeks’ notice on 27 September 2018 for the notice to expire on 25 October 2018.[5]The Respondents were clearly unhappy at Mr Warwick’s decision to leave and asked him to reconsider. Mr Warwick was however insistent upon leaving. The notice period passed by uneventfully. On his last day he was told that some deductions would be made from his final pay for excess holiday leave taken and for the cost of attendance on a course. There was nothing given to him in writing as to the proposed deduction. Mr Warwick’s last day of work was 25 October 2018.[6]Mr Warwick was a full time permanent employee working nine and a half hours a day with half an hour unpaid lunch break. The details of his pay are not clear from the documents in the bundle. The ET1 on the ‘pay’ section has been left blank. The ET3 indicated it did not agree with the Claimant’s pay details (which were not in fact completed) but it did not go on to set out what the actual pay was. At the commencement of this hearing it was agreed that the relevant figures were as follows: The Claimant’s gross wage was £29,250.00 per annum, which is £562.50 gross per week. His net weekly pay is agreed at £447.55.[7]The Respondent’s holiday year runs from 1 April to 31 March. The Claimant’s annual leave entitlement was 33 days at the material time. In March 2016 the Claimant was given a contract of employment which he accepts he signed. Although the copy in the bundle was unsigned, there is no dispute that this contract was at some point agreed and executed by both parties. I shall refer to it as the ‘old contract’. It contains the following relevant provision: “If you leave the company and have taken more holidays than you have accrued, the company reserves the right to deduct this balance from your outstanding wages.”[8]There was nothing in the old contract as to any deductions for training course fees. In February 2017, there was an e-mail exchange between the parties whereby the Claimant was sent a revised contract of employment (the ‘new contract’) which contained significant changes from the old. Relevantly, it repeated the provision as to deductions as to deductions for excess holidays (using the same wording) but also included an additional provision as to deductions for training course costs. That additional term was as follows: “Any training opportunities supplied by the company will be return payable if you leave within three years of undertaking this”. (sic)[9]Mr Warwick takes issue with the suggestion that he agreed to the terms of the new contract of employment. He did not agree with the provision as to training costs and unlike the previous occasion he did not sign or return the new version. His evidence, which I accept, is that Mr Greaves told him that it did not apply to him. Even if no such discussion took place, I am satisfied there was no agreed variation because the Claimant voiced his objections to the changes and did not sign the new contract. He said he had good reason not to agree to the new terms. As he puts it in his witness statement: “What would they say if after two and a half years they send another contract out saying you need to stay with the company five years and so on.” Page 2 of 6[10]I appreciate that the old contract only gave the Claimant 28 days annual leave so on the face of it the Claimant should not be entitled to the benefit of 33 days annual leave (which only appears in the new contract) but I am satisfied that there was an agreed variation by conduct as to the new period of annual leave whereas there was no agreed variation as to the additional deductions clause for training fees.[11]There is a significant dispute as to the number of days the Claimant actually took in respect of annual leave in the final leave year. The problem is compounded by the absence of any paperwork. I have not been taken to any holiday forms or any documentary evidence which would put the matter beyond doubt.[12]The Claimant’s position is that in the relevant leave year he took only 22 days of holiday which were as follows: 4 days in April, 1 in July, 17 in August and 1 in September. That is 23 days to which one would need to add the bank holidays which are to be included in calculating leave days under the contract.[13]The Respondent’s position is that the Claimant took 28 days leave in the relevant year: 8 days in April, one in June, one in July, 17 in August and one in September, plus (they say) five bank holidays which they do not specify.[14]It now seems to be agreed, though it was disputed before the hearing, that the Claimant had three days owing from the previous year which the Respondents say they allowed the Claimant to add as a gesture of goodwill. The Claimant says there was no goodwill about it - he had three days left which he could not take and the Respondent agreed that they could be carried over. In any event, the agreed position now is that three days should be added to his annual leave entitlement.[15]In relation to the training deduction, it is agreed that Mr Warwick attended a design training course. The duration of the course appears to have been 12 days the cost of which to the Respondent is said to be £2,500. The Respondent’s original position was that they were planning to make a deduction of the entire 12 days fees but then on reflection considered that would be unfair on the Claimant. They then decided that 6 days of pay deduction was a reasonable amount. By the time the ET3 was lodged, it was said to be one day’s deduction. At the start of this hearing Mrs Greaves’ position was that it should be two days of fees. During the course of the hearing the Respondent confirmed it was no longer contesting the unlawful deduction as to training. I do not therefore need to make any determination on the matter but I still consider it appropriate to set out some observations in relation to it as set out below.[16]The Respondent has in addition to the spreadsheet produced payslips for the last six months of the Claimant’s employment. The amount of pay varies from month to month. The penultimate pay statement, said to be for the month ending September 2018 shows the Claimant having been paid £1,853.00. His final payslip for month ending 31 October 2018 shows a payment of £1,337.37. It does not however set out the dates that the wages are said to cover nor the hours worked, the rate of pay or the amount of any deduction. The October payslip is the one where one would expect any deduction to be set out but it is silent on the point.[17]The spreadsheet has a zero marked against the last 14 days of the Claimant’s employment record as to the number of hours worked. That is of course factually incorrect (other than one day when the claimant was off sick) because it is agreed the Claimant was actually at work on those days. Apparently, the only way to deduct pay from the system is to notionally label a day as zero hours even when an employee has worked on that day. That clearly paints a misleading picture because the Claimant is indeed at work but the system shows him as not undertaking any work. There is Page 3 of 6 nothing on the final payslip to identify the amount of the deduction or how it is broken down as to excess annual leave or training.[18]The Respondent’s final position as I understand, and it has been something of a case of shifting sands, it that the Claimant was paid up to 5 October which leaves a period of 14 days to the effective date of termination and it is from those 14 days from which it has made any deduction. It concedes that 6 days of pay should be due but the rest are properly deductible for excess leave taken. The Claimant believes that 9 days pay is due for excess leave plus a further 4 days at least for work done but not paid.
THE LAW
[19]The relevant statutory provisions are found at section 13(1) and (2) of the Employment Rights Act 1996 (“ERA 1996”) which states:- “(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) 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) 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.”
THE ISSUES
[20]The Respondent relies upon section 13(1)(a) and 13(2)(a) ERA 1996 as the authority for making the deductions in this case.[21]The issues are as follows:-21.1 Whether the Respondent is entitled to make a deduction by virtue of section 13(1)(a) and/or section 13(2)(a) ERA 1996;21.2 Whether the wording of the relevant provision covers the deduction made;21.3 If the new contract constitutes a variation did it enable the Respondent to make the necessary deduction.
CONCLUSIONS
[22]I should say a word as to the evidence at this hearing Mr Warwick gave sworn evidence and was cross examined. He has also produced a witness statement in support of his case. The Respondent submitted a witness statement through Mrs Libby Greaves but chose not to call her to give evidence. I am sure that Mr Warwick would have had a number of questions to ask Mrs Greaves if she had been called. As it is I have to consider what weight, if any, to attach to Ms Greaves’ evidence given that she chosen not to take the stand as it were.[23]I am satisfied the Claimant’s evidence was given honestly and that he is a credible witness. I prefer his evidence where it conflicts over the evidence set out in Page 4 of 6 the witness statement of Ms Greaves. I attach very little weight on Mrs Greaves’ statement where it relates to any disputed matter.[24]The Claimant’s evidence, which I accept on this point, is that he was not paid wages from 15 September 2018 to 25 October 2018. What he means of course is that he was not paid save for £1,337.37 which was the final instalment of wages paid into his bank account.[25]I shall deal firstly with the Respondent’s records on annual leave. Regulation 9 of the Working Time Regulations 1998 (which it is unnecessary to set out here) requires employers to keep “adequate” records to show whether the requirements of the Regulations are being complied with. The Respondent is clearly in breach of that requirement. The spreadsheet on which a considerable amount of time was spent at this hearing is not only difficult to follow but is factually incorrect and potentially misleading. Given that the Claimant’s accrued holiday entitlement would (even if the disputed elements were left out) would be no less than 19 days to the date of termination and given that the Respondent’s own position is that the Claimant had taken 28 days holiday at that point, a deduction of 14 days’ pay is clearly unjustifiable. Mrs Greaves seeks to add a further day in June at paragraph 11 of her witness statement but even this would not take the Respondent close to the 14 days. The Respondent employer is entirely the cause of the shambolic state of affairs by failing to keep proper records and issuing accurate payslips. The business has been running for 10 years and has 14 employees and so it has had sufficient time and resources to put things in order. There is no reason why it should take the benefit of any doubt which it has created.[26]The position in relation to the training course fees is highly unsatisfactory. I appreciate it is no longer an issue but it is worth setting out some observations. The deduction on the face of it appears to be for the cost of the course fee. Whilst there is a copy of the fee note of £2,500 in the bundle there is no evidence that £2,500 was actually paid by the Respondent. It is Mr Warwick’s evidence that the course was going to be subsidised by a government scheme.[27]The fact that there was never a cost to the company is supported by an e-mail of 2 November 2018 in which Mrs Greaves writes to the Claimant stating: “As David and I advised at the time of discussing the course with you, when you also offered to pay for the course yourself, that as we had the course grant funded by the CITB we did not expect you to pay for this. David and I both advised at the time that unless you leave within the 3 years we wouldn’t expect any monies returned. We have stuck to our word and not ask for the amount of £2,500 as this was funded, but the twelve paid days to send you on the course was not funded, which we are at right to deduct in full as stated in your contract, but chose not to. We also advised you that as you didn’t complete the course in full due to work not handed in or complete on time, we were unable to utilise any of this training within the business.” (emphasis added)[28]I am therefore satisfied that what the Respondent is seeking to deduct is not the cost of the course fees but rather the time that the Claimant spent at the course. If that is the case then the deduction was clearly for working time spent at the course and not course fees. Also, the term “training opportunities supplied by the company” would be far too vague to apply to the proposed deduction for working time at a course rather than say, reimbursement of fees paid. As I say the training fees deduction is no longer an issue but if it was I would have no hesitation in finding that the deduction was not authorised by section 13 ERA 1996. Page 5 of 6[29]My conclusions are as follows:29.1 The amount of any excess leave taken is unclear and cannot be properly determined without any element of doubt given the absence of proper records and payslips. The relevant contractual provision relied on therefore fails for lack of certainty.29.2 Neither the ET3 nor Mrs Greaves’ witness statement gives a breakdown of what the total deductions were and what they relate to. The deduction for training cannot be correct for the reasons given above. It is a necessary precondition as to any lawful deduction that what is being deducted should be clear and identifiable. 29.2 The relevant provision gives a right to deduct “the balance” from outstanding wages. Where the balance cannot be distinguished from what is not deductible that provision is too ambiguous to be enforceable. In the absence of proper records and certainty it is not possible to identify “the balance”. I do not accept that the wording of the relevant provision relied on covers the deduction in this case.[30]That leaves the question of how much the Claimant is actually entitled to. The Claimant’s case is that he was not paid between 15 September 2018 to 25 October 2018.[31]I accept the Claimant’s evidence that over the six-week period between 15 September 2018 and 25 October 2018 he did not receive any wages other than what is on his October payslip which shows £1337.37 was paid into his account. There is a September payslip but it appears that it covers wages for period before 15 September and the date on the payslip is simply the date of issue of the payslip rather than the wages paid up to that point. Again, the payslip is deficient in that it does not stipulate the period it covers.[32]The period of six weeks between 15 September and 25 October means the wages that were due (at the agreed weekly pay of £447.55) would be £2,685.30. From that I deduct £1,337.37 being the amount of the October payment which the Claimant has received. That leaves a balance of £1,347.93 which is the amount of the unlawful deduction. There will therefore be a judgment in favour of the claimant for £1,347.93.