S Masud v Pinnacle Finance Mortgage Adviser and Specialist Lending Brokers: 6016508/2024
JUDGMENT
[1]The claimant’s complaint of unlawful deduction from wages is well-founded and succeeds.[2]The respondent is to pay the claimant the sum of £7221.69 (net) within 14 days of receipt of this judgment.REASONS
[1]The claimant is Shahrul Masud and the respondent is Pinnacle Finance Limited. They are the parties in the case.[2]Daniel Sparkes is the director of the respondent.[3]Mr Masud was employed as a specialist mortgage broker from 1 November 2023 until he resigned from his employment on 23 October 2024.[4]On 28 October 2024, the tribunal received an ET1 claim form. The claim was for arrears of pay, unpaid holiday pay and unpaid commission. Procedure and hearing[5]The case was listed for a final hearing with a time estimate of one hour. It was heard remotely by CVP.[6]I was referred to a bundle of documents and additional documents submitted by email. Witness statements were filed by Mr Masud and Mr Sparkes. I heard oral evidence from Mr Masud and Mr Sparkes.[7]There was insufficient time to give an oral judgement, and so judgment was reserved. Claim and issues[8]Mr Masud submits that he is owed salary from July 2024 until October 2024; holiday pay and commission.[9]The respondent agrees that Mr Masud is owed salary from July 2024 until October 2024 and commission for July 2024. It disputes that any holiday pay is outstanding or that any further commission payments are outstanding.The law
[10]Section 13 of the Employment Rights Act 1996 states that: “(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...”Findings of fact
[11]Mr Sparkes recruited Mr Masud. He sent an email including a job offer to Mr Masud on 6 October 2023. The job offer stated as follows: “The contract is for a full-time, employed position and will feature duties/responsibilities as per the job advertisement, and those discussed at our meeting. I have summarised below some key points regarding the position and our arrangement which should hopefully come in useful when making your decision:• Basic salary of £26,000• Commission split of 20% across all business written (including referrals)• No commission validation...”[12]The job offer email went on to say: “Should you wish to discuss any of the above further please feel free to contact me. Assuming acceptance, we would draft the necessary contract for signing, and cover off recruitment particulars...”[13]Mr Masud confirmed acceptance of the job offer on 6 October and agreed a start date of 6 November 2023.[14]There is a dispute between the parties about whether or not a contract of employment was ever agreed. Mr Masud’s evidence was that no official contract was ever provided to him or signed by either party. Mr Sparkes’ evidence was that on the claimant’s first day of employment he undertook Mr Masud’s induction. During that meeting, he said that he provided Mr Masud with hard copy of his contract of employment (which Mr Sparkes had signed electronically first) and a company laptop. He says that Mr Masud agreed to be bound by the contract of employment and was asked to send a signed copy back. Mr Sparkes accepts that no signed copy was returned to him.[15]Mr Masud says that the first time he saw the contract of employment was on 18 November 2024. He says that he asked for a copy when he first started his employment but did not see it has his duty to chase it up.[16]I find that Mr Masud was provided with a copy of his contract on 6 November. The evidence of Mr Sparkes is consistent with the fact that the job offer said a contract would follow. Mr Masud was aware of this because it said so in the email containing the job offer. Additionally, Mr Sparkes said that the process followed was the same for all new starters. It would have been better if the respondent had contacted Mr Masud requesting the return of the contract, but I find that in continuing to work Mr Masud had, implicitly by his conduct, accepted the terms of the contract.[17]The contract of employment sets out that commission is a benefit. The contract further states that this commission does not form part of the contract of employment and may be amended or withdrawn at any time.[18]Mr Masud was paid salary and commission until the end of June 2024. Mr Masud disputes that he was paid the correct amount of commission or that all of the relevant commission statements were in the bundle. However, he provided no evidence as to what was missing, even in general terms. There is no evidence that he raised concern with the respondent about his commission payments at the time. There is no evidence before me on which I can make a finding that he has been underpaid commission. The tribunal needs evidence on which to make a factual finding.[19]On 24 July 2024, the respondent was that told that the claimant had submitted a fraudulent mortgage application. This information came from the mortgage club involved in transaction. The mortgage club in question said that an investigation needed to take place into what had happened. Mr Sparkes was the respondents’ compliance officer, and so the investigation fell to him. In light of the alleged fraudulent allegation, the mortgage club suspended the ability of the respondent to claim commission. This severely impacted the respondent’s cash flow. Staff, including Mr Masud, were not paid on time or at all. The investigation took about two months to complete. It was established that Mr Masud had not completed the required due diligence checks with a client, which was his responsibility as a broker. Ultimately it was decided that the client had been misleading about their identify.[20]On 29 July 2024, Mr Sparkes told Mr Masud that due to the implications of the alleged fraudulent application the respondent would not be able to pay his salary. Initially, Mr Masud was accepting of this and continued working for the respondent.[21]On 31 July 2024, Mr Masud did not receive any payment from the respondent. The position was the same in August and September.[22]On 30 September 2024, Mr Masud made a formal grievance about the situation to the respondent.[23]On 7 October 2024, Mr Masud was signed off from work by his GP with work related stress. He had been off sick since 29 September.[24]On 23 October 2024, Mr Masud resigned. He had not been paid in July, August, September or October. Mr Sparkes accepts that Mr Masud is owed £7,221.69 (net) for his July, August, September, and October 2024 salary, which includes the ‘Bonus’ entry noted within his July 2024 payslip.[25]On 18 November 2024, Mr Sparkes indicated that he would pay Mr Masud the money that was accepted as owed in 12 stage payments. No money has ever been paid.[26]There is no evidence before the tribunal from Mr Masud about the amount of holiday pay that he says has not been accounted for. He does not have a record of when he took annual leave. The respondent has not provided a record either, but states that Mr Masud is not owed any holiday pay. In the absence of any evidence on this point, I am not satisfied that the respondent has failed to pay holiday pay.Conclusions
[27]The claimant is owed the sum of £7,221.69 (net). This was accepted by Mr Sparkes.[28]The claimant was aware that the job offer email of 6 October 2023 was not his contract of employment. The email clearly sets out that the contract would be drafted and signed if the offer of employment was accepted.[29]I have found that the claimant was provided with a copy of his contract on the day of his induction. That contract states commission is a benefit that may be withdrawn at any time. In this case, a reason was given to Mr Masud at the meeting on 29 July about that fact that he would not be paid. The respondent was in cash flow difficulties due to the investigation taking place.[30]In any event, there is no evidence before the tribunal as to what, if any, commission the claimant says that he is owed.[31]The claimant’s complaint of unlawful deduction from wages is well-founded and succeeds in respect of the salary not paid between July 2024 and October 2024, as well as commission for July 2024. Approved by: Employment Judge Freshwater Dated: 18 July 2025 Notes All judgments (apart from judgments under Rule 51) and any written reasons for the judgments are published, in full, online at https://www.gov.uk/employment-tribunal-decisions shortly after a copy has been sent to the claimants and respondents. If a Tribunal hearing has been recorded, you may request a transcript of the recording. Unless there are exceptional circumstances, you will have to pay for it. If a transcript is produced it will not include any oral judgment or reasons given at the hearing. The transcript will not be checked, approved or verified by a judge. There is more information in the joint Presidential Practice Direction on the Recording and Transcription of Hearings and accompanying Guidance, which can be found here: www.judiciary.uk/guidance-and-resources/employment-rules-and-legislation-practice-directions/