ACCOLADE BUILDING SERVICES LTD v MR A GARDINER [2002] UKEAT 1396_01_0102

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1396_01_0102Case No Appeal No. EAT/1396/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
ACCOLADE BUILDING SERVICES LTDAPPELLANTMR A GARDINERRESPONDENT
Before
Mr Recorder BurkeDate 1 February 2002
[1]APPEARANCES For the Appellants No appearance or representation by or on behalf of the Appellants MR RECORDER BURKE QC This is the preliminary hearing of an appeal by Accolade Building Services Ltd against a Decision of an Employment Tribunal sitting at Southampton, chaired by Mr Edwards, and promulgated with Extended Reasons on 4 October of last year.[2]In that Decision, the Tribunal found that there had been an unlawful deduction from the wages of the Applicant in the sum of £559.46 and ordered the employers, Accolade, to pay that sum to the Applicant. The Appellants have not appeared today at this preliminary hearing; they have sent a Skeleton Argument, which we have considered in detail, together with the other papers.[3]The employers purported to make the deduction from the payment made to the Applicant in these circumstances. He was employed as a technician student apprentice, working from 29 March 1999. There was a written apprenticeship agreement between employer and employee. For reasons which the Tribunal did not go into, the employee decided that he did not want to stay in the employment of the employer. He purported to resign on 22 April 2001; there seems to have been some debate as to whether that was an effective resignation.[4]Mr East, the Managing Director and Chief Executive of Accolade, the employers, refused to accept the resignation and the employee then gave notice. His final date at work was 25 May 2001. When he left work, he received his payslip. On the payslip appeared the words : "£559.46 deducted. Contribution to training costs, see attached" and what was attached was a list of payments made by the employers to colleges, in respect of the cost of the employee's training courses, as reduced by 13/24 th .[5]It is, of course, unlawful to make a deduction from wages of a worker, unless the deduction is authorised by statute, or the worker has previously signified, in writing, his agreement or consent to the making of the deduction. The issue was whether the employee had previously signified in writing his agreement or consent to the making of the deduction; and the employers relied for those purposes on two provisions of the apprenticeship contract, or the statement of the terms of employment (it could have been either, but it matters not which, for present purposes).[6]In clause 8 of that document, the following clause appears:
"The employee formally agrees that, following notification from the company, the company may deduct from payments to the employee, monies not exceeding those due to the company for any previous monies advanced, goods purchased and unpaid, company tools or equipment not returned upon request, or any other indebtedness to the company."
And by clause 12:
"Training will be provided to you from time to time. The purpose of the training is to improve your skills and abilities working with our company. Should you leave this company within two years of the training being provided, you agree that you will reimburse our company in full, less a sliding scale of 1/24 for each month completed from the date of commencement of the training ……and you further agree that these monies may be deducted by the company from your wages or salary."
It was under these two clauses that the employers sought to make the deduction that they did.[7]One can understand the disappointment and concern of an employer who has invested substantially in training an employee, or an apprentice, and then finds that the employee or apprentice is leaving, well before the training is completed and well before the employer has had the opportunity to gain any of the fruits of his investment in the training. However, despite our sympathy in that respect, the employers will appreciate that they can only make deductions if they are permitted by law, and in this case, if they were permitted by the contract, there being no statutory provision which they can pray in aid.[8]The Tribunal decided that the contract did not permit this deduction. They so decided for two reasons: first of all, clause 8 required, by the words "following notification from the company" that there should be a notification to the employee of the proposed deduction before the deduction could lawfully be made, and that there had not been any such notification on the facts in this case[9]Secondly, they decided that the words in brackets in clause 12, which we deliberately did not read out earlier but which we now read out, applied to this case. Those words are:
"(with the exception of training provided under a formal apprenticeship agreement)"
They decided that those words went with and should be construed together with the words "that you will reimburse our company in full" and that that provision, read as a whole, meant that clause 12 did not apply to a formal apprenticeship agreement under which, of course, the employee had been provided with his training.[10]The employers appeal on the basis that the Tribunal erred in law in both respects. They say that the words "with the exception of training provided under a formal apprenticeship agreement" should be construed as applying only to that part of clause 12 which provides a sliding scale of deduction, and not to the whole of the entitlement to make a deduction. We do not agree; we do not think it is arguable that the Tribunal made an erroneous construction of this contract. It is difficult to understand why there would be any need for the provision to except training under a formal apprenticeship agreement if that exception only applies to the sliding scale as opposed to the overall right to reimbursement. It does simply not seem to us to make sense.[11]Furthermore, it seems to us that, even if the Tribunal had been wrong, there was another problem for the employers in the words "you will reimburse our company in full". Those words simply do not identify in respect of what reimbursement was to be made, but we leave that on one side, because the Tribunal did not rely on that ground, they relied on the ground which we have set out; and, in our judgment, it is not arguable that they were incorrect in law to do so.[12]If that is right then the second point made by the employers to the Tribunal does not matter, that point being that there had been a notification from the company to the employee, because the company had put the employee's father on notice of their intention to make a deduction. Nevertheless we should briefly consider the point. The Tribunal found that there was not a sufficient notification; they were right, in our judgment, in so finding; it is not arguable that they were wrong, and if that is so, then the employer's claim to be entitled to make a deduction under clause 12 would have been bound to have failed, in any event, for the want of the necessary notification required under clause 8.[13]For those reasons, this appeal discloses no arguable point of law, and must be dismissed.