Mr G D A Goniyamaleemage v Stellantis & You UK Ltd: 6004624/2024
EMPLOYMENT TRIBUNALS
Case No 6004624/2024
Between
Mr G D A GoniyamaleemageClaimantStellantis & You UK LtdRespondent
Before
Employment Judge Fairhurst (sittingIn person for claimantMr Z Malik (instructed by Solicitor) for respondentDate 16 October 2024
REASONS
[1]The Claimant brought a claim for unlawful deduction from wages.
Background
[2]The Claimant was employed by the Respondent from July 2023 to March/April 2024 as a Car Sales Executive.[3]During his employment, the Claimant was provided with two company vehicles: a vehicle with registration MW23ZSJ (“Vehicle 1”) and a vehicle with registration MW73LXC (“Vehicle 2”).[4]In the Claimant’s final salary payment, the sum of £2,002.42 was deducted on the basis of damage to Vehicles 1 and 2.
Issues
[5]The issue in dispute in this case was whether the deduction made from the Claimant’s wages was authorised. Relevant legal principles[6]Pursuant to Part II and section 13 of the Employment Rights Act 1996, a worker has a right that the employer shall not make a deduction from their wages unless certain statutory criteria are fulfilled. Section 23 of the same Act gives the worker a right to apply to the Employment Tribunal if they wish to allege that wages have been unlawfully deducted or not paid at all, which is what the Claimant did in this case. Section 13 of the Employment Rights Act 1996 is below:[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.(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.(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.(4) Subsection (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion.(5) For the purposes of this section a relevant provision of a worker’s contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect.(6) For the purposes of this section an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified.(7) This section does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be subject to a deduction at the instance of the employer.(8) In relation to deductions from amounts of qualifying tips, gratuities and service charges allocated to workers under Part 2B, subsection (1) applies as if— (a) in paragraph (a), the words “or a relevant provision of the worker’s contract” were omitted, and (b) paragraph (b) were omitted. Evidence 7. The Claimant did not provide a witness statement in advance of the hearing but gave oral evidence during the hearing. 8. Witness statements were provided in advance of the hearing by the Respondent in respect of two witnesses: Amanda Brophy (HR Co-ordinator for the Respondent) and John Bolton (Group Operations Support Manager for the Respondent). Both gave oral evidence during the hearing. Relevant findings of fact Claimant’s contract of employment 9. An employer can make a deduction from wages where such deduction is authorised by virtue of a relevant provision of the worker’s contract. 10. I was provided with a copy of the Claimant’s contract of employment. The Respondent pointed me to the following provisions: Paragraph 5: “Remuneration... Under the terms of the Employment Rights Act 1996 you authorise the Company to deduct any sums due from your salary, including but not restricted to, any over-payment of salary, loans made to you by the Company or any funds believed to have been misappropriated by you from the Company. In the event of such sums being due upon the termination of your employment, and if your final salary payment is insufficient to allow for the whole deduction to be made, you will be required to repay the outstanding amount due to the Company immediately upon request from the Company. This expressly includes the right to recover payments for annual leave taken in excess of your pro rata entitlement for that leave year.” Paragraph 14: “Termination of employment... If you fail to return any Company property prior to the termination of your employment or return it in poor repair and/or condition, you hereby consent to the Company making a reasonable deduction based upon the cost of the recovery, replacement or repair of that property from any monies owing to you by the company. If you fail to return any Company property this will be treated as a theft and may be reported to the Police.” 11. I was satisfied from the above provisions that the contract allowed for reasonable deductions to be made where the Respondent’s property was returned to the Respondent in poor repair and/or condition. 12. There was a dispute between the parties as to whether the Respondent had given the Claimant a copy of the contract prior to making the deduction (that is, a dispute over whether the contract contained a ‘relevant provision’ under Section 13(2) of the Employment Rights Act 1996). The Claimant and the Respondent both provided evidence on this point during the hearing. 13. The Claimant’s evidence was that he did not sign an employment contract. He said that he could not recall whether he had received the contract, but that the contract was not valid because he had not signed it.
Evidence
[14]Ms Brophy gave evidence for the Respondent. She outlined the Respondent’s HR processes and referred to two specific emails which were sent to the Claimant containing his contract of employment. Ms Brophy also confirmed why these emails could not be produced to the Tribunal (due to the Respondent’s GDPR policies and procedures). In cross examination, Ms Brophy noted that the Claimant would not have known the date his employment started if he had never received his contract and that he had started work on the day requested. She also referred to the Claimant having returned documents to the Respondent which were requested in the same correspondence providing the contract.[15]I favoured Ms Brophy’s evidence on this point. Her evidence relating to sending the contract to the Claimant was clear and specific. Further, the Claimant’s main evidence on this point was that he had not signed the contract so it could not be valid. Even if the Claimant had not signed the contract, I was satisfied with the Respondent’s evidence that the Claimant had been given a copy of the contract by the Respondent, such that the provision within it would amount to a “relevant provision” under section 13(2) of the Employment Rights Act 1996. I was also satisfied that, even though the contract had not been signed by the Claimant, it had been sent to him, he had turned up for work on the date set out within the employment contract and he had continued to work for the course of his employment under those contractual terms. Vehicle 1[16]The Respondent made a deduction of £1,006.42 in respect of damage to Vehicle 1. The damage was caused by an accident in which the Claimant skidded and hit a kerb. There was a dispute between the Claimant and the Respondent regarding whether the deduction was justified.[17]The key points raised by the Claimant were:(i) that the accident causing the damage was due to a brakes malfunction and was not his fault,(ii) that the Respondent should have claimed on its insurance in respect of the accident (reducing the amount owed by the Claimant to the insurance excess), and(iii) the fact that deductions were made some time after the damage had occurred.[18]The Claimant alleged that the accident occurred due to a brakes malfunction and that it was, therefore, not his fault that there was damage to the vehicle. In cross examination, the Claimant referred to the possibility of this being due to a software malfunction, rather than there being a physical issue with the brakes.[19]Mr Bolton gave evidence for the Respondent that a brakes malfunction is of such a serious nature that, if the Claimant had reported a brakes malfunction, that would have been documented and the vehicle would have been subjected to testing before being sold. No testing had occurred. Further, the malfunctioning of brakes was unlikely to be a one-off occurrence and no other issues had been reported relating to the vehicle.[20]I favoured the evidence of Mr Bolton on this point. I found it unlikely that, had a brakes malfunction occurred and been reported by the Claimant at that time, it would have been overlooked by the Respondent and that no further diagnostic testing would have occurred, particularly before the vehicle was then sold.[21]The Claimant gave evidence that he discussed the accident with his manager and his manager said that the matter would be taken care of, but the Respondent did not then claim on its insurance. He said that a claim on insurance would have reduced the amount deducted from his wages.[22]Mr Bolton gave evidence for the Respondent on this point. He said that he could not speak for the Claimant’s former manager (and the former manager no longer worked for the Respondent), but that insurance is in place to protect the Respondent in the event of an incident happening and many factors would influence whether the Respondent chose to claim on the insurance, including the value of the claim and whether the relevant employee was completely responsible for the damage. Mr Bolton said that it was a matter for the Respondent to decide whether to claim depending on the circumstances, and it had chosen not to do so on this occasion.[23]The Claimant also argued that the Respondent had delayed in making the deduction. The Respondent agreed that there had been a delay but said that was due to a delay in being able to repair the vehicle due to the unavailability of parts. Mr Bolton provided evidence that it would not have been in the Respondent’s interest for the vehicle to be in the compound depreciating for months unless there was no choice due to parts not being available. Mr Bolton also referred to weekly reports being available setting out back orders of parts, albeit that such reports were not provided as evidence.[24]I considered the relevant provisions in the Claimant’s contract. The contract allowed for a reasonable deduction to be made in respect of the cost of recovery, replacement or repair of the Respondent’s property where such property was returned in poor repair and/or condition. Based on the evidence provided, I was satisfied that the deduction had been made in those circumstances. In particular, the right to make deductions in the Claimant’s contract was not limited to recovery of an insurance excess. Although the right to make deductions was limited to a ‘reasonable’ amount, I saw no reason why this should limit the Respondent from claiming for the full amount of the repairs (rather than the insurance excess) in these circumstances. In making this decision, I considered the evidence provided by Mr Bolton regarding the factors that the Respondent would consider when deciding whether to claim on its insurance and I considered my finding that the damage was not caused by a brakes malfunction.[25]Based on the evidence provided, I was satisfied that the deduction had been made in the circumstances set out in the Claimant’s contract and was authorised. Vehicle 2[26]Vehicle 2 was a demonstrator vehicle which was given to the Claimant in a used condition. It was a vehicle that customers used for test drives. The Respondent made deductions of £996.00 in respect of Vehicle 2. The Respondent provided invoices in relation to the repairs which were required to Vehicle 2.[27]The Claimant and Respondent disagreed as to whether there was any damage to Vehicle 2 at the point it was handed back to the Respondent.[28]Both the Claimant and the Respondent provided evidence regarding the circumstances of Vehicle 2 being handed back and whether there was any damage to Vehicle 2 at that time.[29]The Claimant gave evidence that, on the day his employment ended, he came into work in his personal vehicle. This was because he thought his employment may be terminated and he did not want to have to find an alternative way home. As a result, the vehicle was collected from his home. The Claimant said that, when the vehicle was collected, there was no damage to the vehicle and the vehicle was given back in the same condition as when it was provided to him. The Claimant said that he was only made aware of the damage to the vehicle 2-3 weeks after it was collected and alleged that the damage must have been caused in the car park after collection (which he said was cramped) or when the car was being used by colleagues or customers.[30]Mr Bolton gave evidence for the Respondent on this point. Mr Bolton said that the damage had been caused by the Claimant and it was made to Vehicle 2 prior to it being handed back to the Respondent. He said that employees were expected to bring their vehicle to work every day and the Claimant had failed to bring Vehicle 2 to his place of work on the day his employment was terminated. As a result, other employees had to be sent to pick up Vehicle 2 from the Claimant’s home address. This was not in line with the usual processes of the Respondent, as checks would normally occur on the Respondent’s premises. The employees who collected Vehicle 2 took photos of it and returned to their place of work. Mr Bolton was informed the next morning about the damage to Vehicle 2. Mr Bolton said that he passed the details on to the relevant team straight away on becoming aware of the damage the following morning. The Respondent then followed its usual processes and an estimate was obtained.[31]I favoured the evidence given by Mr Bolton relating to when the damage had been caused to Vehicle 2. I found Mr Bolton’s evidence to be consistent and clear on this point and I found it likely the Claimant had not brought Vehicle 2 to work on the day of termination of his employment due to the damage caused to it. I was, therefore, satisfied that the Claimant had handed Vehicle 2 back to the Respondent in poor repair and/or condition.[32]The Respondent’s right to make deductions was limited to a ‘reasonable’ deduction based upon the cost of the recovery, replacement or repair of the Respondent’s property. In Mr Bolton’s evidence, he referred to part of the deductions being based on an estimate, and the actual cost of the repairs being less than the estimated amount. The actual cost of the repairs, based on the invoices provided by the Respondent, amounted to £816.[33]The Respondent asserted that the amount of the deduction was ‘reasonable’ (in line with the provision in the Claimant’s contract) and that the Respondent could have deducted further amounts, had they been aware of the full extent of the damage at the time of making the deductions.[34]It is for the Respondent to provide the actual cost of the repairs when making a deduction and the Respondent made a deduction which was greater than this. Further, I was not satisfied that the amount of the deduction was ‘reasonable’ (in line with the provision in the Claimant’s contract) given that the actual cost to the Respondent was £180 lower than the amount which was deducted from the Claimant’s wages. I therefore made the award recorded in the Judgment.
Evidence
[1]By consent, the Respondent’s name is amended to Stellantis &You UK Limited.[2]The complaint of unauthorised deductions from pay contrary to Part II of the Employment Rights Act 1996 is well-founded. The Respondent made an unauthorised deduction from the Claimant’s pay of the sum of £180. The Respondent is ordered to pay to the Claimant the gross sum of £180 deducted from pay.