Mr John Duckworth v Shield Labour Solutions Ltd: 3327682/2019
JUDGMENT
The Respondent has made unlawful deductions from the Claimant’s wages in the sum of £1,150.68.REASONS
[1]This matter came before me for a Final Hearing on 8 January 2021 following a Notice of Hearing issued by the Employment Tribunal on 25 February 2020.[2]Prior to the Hearing, the Respondent submitted a signed witness statement from Mr Gareth Bough, Director, of 11 January 2020 together with copy pay slips. Separately, the Respondent submitted a copy of the Claimant’s Contract of Employment and further pay slips.[3]Proceedings were issued in this case against “SLS Payment Solutions” and the Response was filed in the same name. That is the name which appears on both the pay slips issued by the Respondent, the witness statement as entered by the Respondent and the Contract of Employment.[4]SLS Payment Solutions is not a Limited company.[5]On the Contract of Employment issued to the Claimant in the name of SLS Payment Solutions, it is said that the Company registration number for that business is: 09913549.[6]That is the Company Registration number of Shield Labour Solutions Limited, whose Registered Office is the same address as that stated for Shield Logistic Solutions and SLS Payment Solutions. The appropriate Respondent is SLS Labour Solutions Limited.[7]The Claimant was employed by SLS Labour Solutions Limited; the Respondent.[8]He was placed by that company to work for various construction businesses from time to time.[9]Under the Terms and Conditions of Employment issued by the Respondent, the Claimant was to submit Time Sheets, signed by an authorised representative of the Respondent’s client. Payment was to be made weekly in arrears directly into the Claimant’s nominated bank account, subject to deduction of Income Tax and National Insurance and the Contract permitted the company to deduct from the Claimant’s remuneration any sums due to the company from the Claimant including any other payments, loans or advances made to him by the company.[10]No other deductions were permitted.[11]Each pay slip issued to the Claimant contained the following information:11.1 the tax period covered by the weekly pay slip;11.2 where the Claimant was placed;11.3 the Claimant’s employee number, name and National Insurance number; and11.4 the date on which the payment was processed.[12]The pay slip then set out the basic hours worked by the Claimant and the rate of pay for those hours. The Claimant confirmed that those sums which are under the section of the pay slip headed ‘Company Receipts’, were what he understood his gross rate of pay to be.[13]There is then a list of ‘Company Deductions’ which are from time to time made under the following headings:13.1 HMRC Payment;13.2 Expenses;13.3 Company Margin; and13.4 Pension.[14]That section of the pay slip then identifies an amount ‘Paid to the Employee’.[15]In the next section of the pay slip, those employee payments are broken down as appropriate between ‘Basic Pay’ and where appropriate ‘Holiday Pay’.[16]In the section headed ‘Employee Deductions’, deductions appear for ‘Tax’ and ‘National Insurance’ as appropriate, identifies ‘Tax Rebates’ when they were payable and on one occasion (on one of two pay slips issued for week ending 4 August 2019, Tax Period 18) a sum for ‘B/Fwd’ in the sum of £212.[17]Mr Duckworth did not know and did not understand what that ‘Brought Forward’ deduction was.[18]At the foot of each pay slip is an identification of ‘Total Gross Pay’, ‘Gross for Tax’, ‘Earnings for National Insurance’ and ‘Total Deductions’ for ‘This Period’ as well as the Claimant’s ‘Tax Code’ and the ‘Payment Method’.[19]There is also a section for ‘Year to Date’ showing ‘Gross Pay Year to Date’, ‘Gross for Tax Year to Date’, ‘Tax Paid Year to Date’, ‘National Insurance Earnings Year to Date’ and ‘Employee National Insurance Year to Date’.[20]On none of the pay slips does the Year to Date figure include any sum for ‘Income Tax Paid’.[21]Mr Duckworth told me that in relation to the Company Deductions:21.1 He did not understand what the HMRC payment was. If it included employer’s National Insurance then that should not be deducted from his pay, it is the responsibility in his view of the employer to pay that sum.21.2 He did not understand why the company’s Pension Contributions were being deducted from his pay.21.3 He did not understand why there was a Company Margin deduction. He did not find, and nor did I, any clause in the Claimant’s Contract of Employment which permitted the company to make a deduction from his pay.[22]The statement from Mr Bough which had been submitted ahead of the Hearing with a Bundle of documents consisting of the Tribunal Pleadings and Notice of Hearing, together with the Statement and the Pay Slips, merely states that, “All deductions made were lawful, contractual, and fully explained at the commencement of employment. All payments were reported via RTI and where relevant paid across to the HMRC”.[23]Mr Bough further stated that as the Claimant had received 27 payments, if there had been an issue with any deductions it surprised him that he continued to work after receiving his first few pay slips.The Law
[24]Under Section 13 of the Employment Rights Act 1996, “(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.”Conclusions
[25]The Respondent has not explained the “HMRC Payment” deductions which it had made week by week from the Claimant’s pay. If these are employer’s National Insurance contributions (employee’s National Insurance contributions being separately identified) they should not have been deducted from the Claimant’s wages. As week by week the Claimant was advised that there was no ‘Tax Paid Year to Date’, they would not, on the face of them, appear to me to be deductions for Income Tax and if they were, they should form part of the ‘Employee Deductions’ and appear on a rolling basis of the amount of ‘Tax paid Year to Date’. They do not.[26]I am forced to the conclusion, therefore, that these were not lawful deductions. I can find no contractual or statutory reason why the deductions were being made.[27]In so far as the company deductions for ‘Pension’ are concerned, these are separate from the ‘Employee Pension’ payments and should not be deducted from the employee’s pay. There is no statutory or contractual authority for the deduction of those sums and therefore they are unlawful deductions.[28]Nowhere in the Contract of Employment is the company entitled to deduct a weekly sum for ‘Company Margin’ from the Claimant’s pay. Those deductions are unlawful.[29]The deduction for week ending 4 August 2019 of £212 for sums ‘Brought forward’ are not explained. Mr Duckworth had no idea what those deductions were for and confirmed that he had not received any advance of wages which would relate to that deduction. In the absence of any explanation from the Respondent and in the absence of any obvious statutory or contractual authority to make that deduction, in those circumstances, I find that that too was an unlawful deduction from wages.[30]The unlawful deductions made under the heading ‘Company Deductions’ on the pay slips provided, were as follows: Tax Period Number Amount 1 £71.40 2 £50.76 3 £50.76 4 £37.00 5 £40.44 6 £18.77 7 £36.74 8 £18.16 10 £27.98 11 £18.32 16 £35.85 18(1) £18.75 18(2) £33.45 19 £47.38 20 £18.56 21 £43.00 22 £29.00 23(1) £18.81 23(2) £28.24 24 £18.36 25 £18.81 28 £18.71 29 £50.09 30 £55.09 31 £73.68 32 £44.18 33 £16.39 TOTAL £938.68[31]There was no pay slip for weeks 9, 12, 13, 14, 15, 17, 26 or 27 and two pay slips were issued for each of weeks 18 and 23.[32]The Total of the above deductions is £938.68.[33]The deduction of £212.00 on the second pay slip for week 18 under the unexplained heading ‘B/Fwd’, was also an unlawful deduction from wages.[34]Accordingly, the total unlawful deductions from the Claimant’s wages made by the Respondent amounts to £1,150.68. 12 January 2021