New Century Cleaning Co v Church & Ors [1997] UKEAT 455_97_1811

EAT
New Century Cleaning Co v Church & Ors
[1997] UKEAT 455_97_1811 · 1997-11-18

JUDGE PETER CLARK :

This is an employer's appeal against a decision of a Chairman, Mr I S Lamb, sitting alone at London (South) Industrial Tribunal on 11 February 1997, that the applicant employees' complaints of unlawful deductions from their wages were well-founded. Extended reasons for the decision are dated 20 February 1997.

The Facts

The Company supplies window cleaning services to its customers. The work is done by teams of employees. Mr Church, whose case was taken as the lead case on behalf of all applicants, was employed by the Company as a leading hand. He agreed with the members of his team that all would split the payment received for each job done equally amongst themselves.The Company operated a piece-work system. On a normal working day the leading hand would attend the Company's premises and collect the works bill which would tell the team where to work, the job specification and the method of working. That document bears a code which identifies the gross amount which the Company will pay to the team for the particular job. The price is determined by the Company and is non-negotiable. The team has the option of doing the job allocated to it, or not. The hours of work may vary according to the nature and number of jobs performed.At the end of each week the leading hand completed a weekly wage summary, showing how the total payable for the jobs done that week was to be split between the team members. Each then received his weekly pay, less tax and national insurance. Since April 1996 the employees have been paid on that basis fortnightly.On 19 February 1996, in order to reflect a downturn in profits caused by the need for a competitive pricing policy to its customers, the Company's Board of Directors resolved that a reduction in the work bill costing was to be applied from 1 April 1996. A 10 per cent reduction was mooted in a letter from the General Manager to employees dated 8 March 1996.The employees would not agree to the across-the-board price reduction. It was nevertheless unilaterally imposed by the Company with effect from 1 April 1996.Consequently, for the employees to earn the same as before that date it was necessary for them to increase the quantity of work done.

The Complaint

On 22 August 1996 Mr Church presented his complaint of unauthorized deductions from his wages to the Central Office of Industrial Tribunals. He claimed that the unilateral reduction in rates, unauthorized by him in writing or at all, amounted to unlawful deductions from his wages. The claim was resisted on the basis that it was open to the Applicant to challenge the wage value put on a job, and if he considered it to be too low, to decline the job. The Company also set out its commercial justification for reducing by 10 per cent the "wage value of each contract". It was denied that any unlawful deduction had been made, since additional work was made available to allow the applicant to maintain his level of wages.

The statutory framework

The provisions of the former Wages Act 1986 then in force are now contained in the Employment Rights Act 1996. We shall refer to the provisions of the 1996 Act.By section 13:
"(1) An employer shall not make a deduction from wages of a worker employed by him unless -
. ..(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.. ..(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."Section 27(1):
"In this Part 'wages', in relation to a worker, means any sums payable to the worker in connection with his employment, including - (a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise"

The Industrial Tribunal Decision

Having referred to a number of authorities, the Chairman concluded that the rate for the job was a contractual entitlement; it could not be unilaterally varied by the Company. The wages properly payable under s.13(3) were those received prior to the 10 per cent rate reduction. Payment of wages at the new rate constituted an unlawful deduction from wages from and since 1 April 1996. Accordingly, the complaint was well-founded.

The Appeal

Mr Ford submits that the Chairman misunderstood the basis on which piece-workers are paid. Each job had a price determined by the Company. Every time the leading hand picked up a job he accepted that price. There was no entitlement to a particular price other than that displayed. The price could go down or up, depending upon the state of the market and the price which the customer was prepared to pay to the Company. The entitlement to wages was the sum of the value of the jobs completed, at those prices, for the pay period. That was what was paid. There was no deduction from wages.He submits, and we accept, that none of the authorities referred to by the Chairman were directly in point.In response, Mrs Goldman submits that the letter of 8 March 1996 which referred to all work bills being reduced by around 10 per cent and which the Chairman found was an arrangement not consented to by the employees, amounted to a unilateral reduction in wages, and a reduction is a deduction from wages for the purposes of s.13.

Conclusion

We prefer the submissions of Mrs Goldman. In our judgment the Chairman was entitled to find that a unilateral, across the board, 10 per cent reduction in work bill rates by the Company, without the consent of the employees, amounted to a reduction in the amount of wages properly payable by the Company to the employees, and was an unauthorized deduction for the purposes of s.13 of the Act.We stress that this is a decision on the facts as found in this case. We do not accept Mr Ford's complaint that he was prevented from calling material evidence which would have altered the factual basis for the Chairman's decision. In reaching this conclusion we are not laying down any guiding principle to be applied in piece-work cases generally. The proper construction of the expression "properly payable" in s.13(3) will depend on the facts of each case and may be left to the good sense of Industrial Tribunals.Accordingly, this appeal is dismissed.