Mr A Ananjevs v Onyx Building Products Ltd: 3325520/2019
JUDGMENT
The claim for unlawful deduction from wages succeeds in the sum of £150.REASONS
[1]The Claimant was employed by the Respondent as an HGV /LGV Driver and Factory Manual Worker/Brick Cutter from 14 April 2019 until he resigned with immediate effect on 26 August 2019. He says the reason he resigned was because the Respondent deducted £150.00 from his pay for July 2019. In this respect he has produced pay slip for July 2019, showing that he earned £1,775.41 net pay, and a copy of his bank account showing that he was paid a total of £1,625.41 for July.[2]The Respondent did not dispute that it had deducted £150 from the Claimant’s pay but said that it did so because on 6 July 2019 the Claimant took a DAF truck without permission and used it in London Low Emission Zone. As a result the Respondent received a PCN in the sum of £500 and said it was agreed with the Claimant that he would pay it in three instalments. The first instalment of £150 was therefore deducted from his July pay. The Respondent further said that the Claimant’s contract authorized the deduction and did not require the Claimant to be notified in writing prior to the deduction being made.[3]The Claimant denied that he was driving the truck at the date of the penalty notice and said that he was not informed of any deduction, either verbally or in writing, before the deduction was made.[4]Section 13 of the Employment Rights Act 1996 provides that: “(1) An employer shall not make a deduction from wages of a worker employed by him unless-(a) the deduction is…authorised to be made by virtue of …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 making of the deduction in question…”[5]The copy of the Claimant’s contract initially provided to me (by the Claimant) contains the following provision: “Deductions From Pay The Employer reserves the right to make deductions from your salary or other sums due to you including salary payable on termination of employment. Such deductions may be made, for example, in respect of:• Recoupment of salary/wages advances;• Payroll errors resulting in overpayment;• Holiday taken over and above entitlement;• Loans;• Cash shortages, advances or other deficiencies;• Cost incurred for assistance with professional qualifications;• Damage to company property where is as a result of your negligence;• Any loss to the company which is a result of your failure to follow rules, or procedures;• Unreturned company property, including any uniform or PPE supplied to you;• The cost of the insurance excess in the event of an at fault accident whilst driving one of our vehicles. This is not an exhaustive list. These are express written terms of you contract of employment. You will be notified in advance and in writing of the total amount of any deduction to be made from your salary/wage should this be necessary.” (italics added)[6]Shortly before the hearing I was sent another copy of what purported to be the Claimant’s contract by the Respondent. However, in this copy the words “and in writing” were omitted. Plainly one version of the contract was an amended and falsified version.[7]I find that the contract which the Respondent sought to rely upon at the hearing was a falsified version and that the true version of Claimant’s contract contained the words “and in writing”.[8]First, during the course of the hearing the Claimant found his contract and showed it to the camera. The Respondent’s coloured logo and the Claimant’s signature, as well as the words “and in writing” were plainly visible. Secondly, the Claimant’s case, both in his claim form and in his oral evidence, was not that he hadn’t been informed of the deduction in writing, but that he hadn’t been informed of it at all, so that the amendment was not material to his case. Thirdly, the Claimant required a Russian interpreter to conduct the hearing, having very little English, and I consider it highly unlikely that he would have known how to amend his contract, even if he had wanted to.[9]Accordingly, the requirement to notify the Claimant in writing in advance of making any deduction was an essential component of the Respondent’s contractual procedure for making deductions. Consequently, the deduction made of £150.00 was not authorised by a relevant provision of the Claimant’s contract pursuant to section 13(1)(a) ERA. Further the Claimant had not signified his agreement or consent in writing to the deduction pursuant to section 13(1)(b) ERA.[10]It follows that the deduction was unauthorised and the claim for unlawful deduction succeeds. RECONSIDERATION JUDGMENT The judgment of 13 August 2020 is varied in the following respects:(1) The claim for unlawful deduction from wages succeeds in the sum of £1,430.00 gross (£1,280.00 + £150.00); and(2) The claim for compensation for untaken annual leave succeeds in the sum of £104.61 gross.(3) The claim therefore succeeds in the total sum of £1,534.61. The Claimant is responsible for paying any tax due on these sums.[1]This is a reconsideration of the judgment of 13 August 2020 in which I found the Respondent had unlawfully deducted £150 from the Claimant’s wages. It was necessary to reconsider this judgment in the interests of justice because, for reasons previously set out in correspondence with the parties, the Claimant had not pursed at the previous hearing his claim of unlawful deduction from wages for August 2019 and compensation for untaken annual leave.[2]The background to the claim is set out in the judgment of 13 August 2020. As before, the Claimant gave evidence with the assistance of a Russian interpreter. For the Respondent I heard evidence from Mr A Kalnins and Mr M Kotur, and I was referred to a statement from Ms V Kosmaca.[3]At this hearing the Respondent accepted it had not paid the Claimant his wages for August 2019. The Claimant had already been advanced a payment of wages of £250. Further, the Respondent was entitled not to pay the Claimant his wages because the employment contract allowed deductions to be made for various relevant matters (the deductions clause) and/or to cover the cost of covering the Claimant’s duties during his notice period if he resigned without giving notice (the lack of notice clause). The Respondent also submitted it had paid all of the Claimant’s holiday entitlement.[4]As regards the deductions clause, the judgment of 13 August 2020 records that at that hearing I was provided with 2 copies of the Claimant’s contract. Although both contracts are signed and dated 14 April 2019 the deductions clause in the Claimant’s version of the contract required the Claimant to be notified in writing of the total amount of any deduction to be made from his salary, whereas the one produced by the Respondent did not. I found the version that had been provided by the Respondent had been falsified.[5]Today Ms Donaldson submitted I should reconsider that finding. She relied on a statement from Ms Veronica Kosmaca who stated she was in the office with the Claimant when he signed his contract and they agreed to amend the contract to remove the words “and in writing”. Unfortunately, she says, she must have provided the Claimant with the unamended version of the contract. Ms Donaldson further submitted that that conversation had taken place and the employment contract had been signed on 3 August 2019 and been backdated to 14 April 2019, (3 August 2019 being the date when the Respondent had paid the penalty charge that precipitated this dispute, and also the date on which the Claimant provided the Respondent with certain employee information). Ms Kosmaca was not at the hearing to give evidence.[6]Ms Donaldson submitted that the deductions clause entitled the Respondent to deduct from the Claimant’s pay the cost of three rental payments, which she submitted the Respondent had paid on behalf of the Claimant in May-July 2019.[7]The Claimant disputed he had ever had a conversation with Ms Kosmaca about the deductions clause. Further, Mr Kalnins, giving evidence for the Respondent, said the Claimant had signed the employment contract on 14 April 2019 and it had not been changed after that date. The Claimant also disputed that the Respondent had ever paid his rent. He stated that he had stayed in a property belonging to the Respondent for less than two weeks for which he paid £320 cash.[8]In the light of the above I reject the submission that the Claimant ever agreed verbally or in writing to the Respondent’s version of the deductions clause and/or to the removal of the words “and in writing”. Accordingly, as recorded in the judgment of 13 August 2020, the true version of deductions clause was the one produced by the Claimant at the hearing on 13 August 2020 which contained the words “and in writing”. The requirement to notify the Claimant in writing in advance of making any deduction was an essential component of the Respondent’s contractual procedure for making deductions. It follows that even if the Respondent paid the Claimant’s rent for a period of time (and I make no findings about this) it was not entitled to deduct those sums from the Claimant’s wages because the Claimant had not been notified in advance, and in writing, of any such deduction as required by this employment contract,[9]As regards the lack of notice clause, this provides: “If you terminate your employment without giving notice or working the required period of notice you will have an amount equal to any additional cost of covering your duties during the notice period not worked deducted from any termination pay due to you. You will also forfeit any contractual accrued holiday pay due to you over and above your statutory holiday pay if you fail to give or work the required period of notice.”[10]Ms Donaldson submitted that since the Claimant resigned without notice the Respondent was entitled to withhold his wages for August 2019 to cover the cost of covering his duties during his one month’s contractual notice period. She further submitted that the Claimant was informed on 8th August 2019 that the cost of the PCN was being deducted from his pay (in increments of £150). Mr Kalnins gave evidence to the effect that the Claimant agreed to the deductions and further that the reason the Claimant resigned on 26 August 2020 was because he wanted to travel to see his family.[11]The Claimant disputed all of this. He said he never agreed to pay the PCN (indeed he denied driving the truck on the date in question). He further relies on his resignation email to the Respondent dated 26 August 2019 (sent shortly before midnight) which states: “Due to the failure to comply with the UK labour code and the terms of the contract, namely the deduction of funds from the salary in the amount of £150 by the employer (08/08/2019) without good reason, appropriate notice and my personal consent. I inform that I terminate the contract (labour relationship) unilaterally and declare the contract is not valid from the moment of not fulfilling the requirements of the labour code and contract.”[12]In the judgment of 13 August 2020 I found that the Respondent’s withholding of £150 from the Claimant’s pay for July 2019 amounted to an unlawful deduction of wages, and this judgment maintains that finding. Accordingly the Respondent committed a repudiatory breach of the Claimant’s employment contract, which the Claimant was entitled to accept by resigning without notice. Further, his resignation email is evidence that his resignation was in response to that breach. For the avoidance of doubt, I do not accept Ms Donaldson’s submission (or Mr Kalnins’ evidence) that the Claimant accepted or agreed that he would have to pay the PCN and/or that he waived or affirmed the Respondent’s breach of contract.[13]It therefore follows that the Claimant did not terminate the contract without giving notice, or the required notice, within the meaning of the lack of notice clause, and the Respondent was not entitled to deduct the cost of covering the Claimant’s duties during what would have been his one-month notice period.[14]The claim for unlawful deduction of wages therefore succeeds. According to his contract the Claimant worked 8.5 hrs per day Monday-Friday for which he was paid £10/hr. Accordingly, between 1-26 August he worked 18 days (153 hours) for which he is owed gross wages of £1,530. Although there is provision in his contract for the payment of overtime and the Claimant says he worked overtime during August, since the Claimant did not have any record of the overtime he worked I cannot make any award in respect of overtime hours. Further the Claimant accepts he was paid an advance payment of wages of £250. Accordingly, he is owed gross wages for August 2019 of £1,280[15]As regards the claim for holiday pay, the period of the Claimant’s employment was 19 weeks and both under his contract and under the Working Time Regulations 1998 the Claimant was entitled to 28 days annual leave per anum. He therefore generated the right to 10.23 days leave during his employment, which amounts to gross pay of £869.61. It was agreed the Claimant took 2 weeks leave in May 2019. He stated this was unpaid, however the Respondent said the Claimant was advanced £765 holiday pay at that time and has produced spreadsheets showing the breakdown of the Claimant’s monthly pay to support this. Further although the Claimant’s payslip for May 2019 does not itemise holiday pay, the amount of pay he received is commensurate with the pay he received in other months (despite him having taken leave). I therefore find that the Claimant was paid £765 holiday pay, which means he is owed £104.61 holiday pay.