MBL UK LTD v MR C QUIGLEY [2009] UKEAT 0061_08_0207

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2009] UKEAT 0061_08_0207

Case No Appeal No. UKEATS/0061/08

Venue 52 MELVILLE STREET, EDINBURGH, EH3 7HF

Between

MBL UK LTDAPPELLANT

MR C QUIGLEYRESPONDENT

Before

Mr Justice Underhill

Date 2 July 2009

[1]APPEARANCES For the Appellant No appearance or representation by or on behalf of the Appellant For the Respondent MR C QUIGLEY (The Respondent in Person) SUMMARY CONTRACT OF EMPLOYMENT Implied term/variation/construction of term Tribunal entitled to find that evidence that the employee had undergone a conventional induction on recruitment did not constitute evidence that he had received "training" at a cost of £500 which the employer was entitled to recover under a claw-back clause. THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT) The Claimant was employed by the Appellant company between 29 October 2007 and 26 March 2008. When the contract terminated the Respondent deducted £500 from wages outstanding for the Claimant, purportedly pursuant to Clause 5.2 of the contract of employment. Clause 3 provides for a probationary period of six months, and Clause 5.2 says this "During the probationary period the company will provide training both structured and on the job training. If the employee is dismissed or chooses to leave the company during this time the company will be entitled to deduct from their final pay a sum equivalent to but not exceeding £500. This will cover the training costs provided by the Company during this period."

[2]The Claimant brought proceedings in the Employment Tribunal, claiming that sum as an unlawful deduction under Part II of the Employment Rights Act 1996 . The claim came before an Employment Tribunal sitting at Glasgow, comprising Employment Judge Williamson sitting alone, on 4 July 2008. The Claimant appeared but the Appellant did not. At paragraph 4 of the Reasons the Judge found as follows:

"The claimant received no material training of any kind. The claimant accepted he had received some limited on the job instruction but nothing which would remotely justify the respondent claiming it had incurred training costs of £500."

Paragraphs 6 and 7 of the Reasons are in the following terms:

" The Law 6. Employers are entitled in a written contract of employment to have a provision whereby it is entitled to recover sums expended on training in the event that the employee ceases to be an employee within a certain period of time. Any such sum specified in the contract must however be a genuine pre-estimate of the cost to the employer of the training which is to be provided. It must not be a penalty. Discussion 7. The Tribunal was satisfied that £500 had been deducted from the claimant's final payment of salary. Indeed the respondent admits that it did so in its response form. The Tribunal was however satisfied on the basis of the claimant's evidence that no material training had been given to him and that such on the job instruction as he may have been given did not remotely justify an assertion that the respondent had incurred material training costs. The Tribunal accordingly took the view that the sum deducted from the claimant was a penalty and not a genuine pre-estimate of the training costs which were to be occurred [sic]."

Accordingly the Tribunal ordered the Appellant to pay the Claimant £500. It appeals against that decision.

[3]Yesterday Mr Branney of the Appellant sent an email to this Tribunal saying it would not be possible for it to be represented "due to prior arrangements and lack of affordability", but certain points were made in the email to which the Tribunal was invited to have regard. I have read the email and had regard to its contents to the extent that they are relevant. The Claimant has attended in person but because of the view which I have taken of the merits of the appeal I have not found it necessary to hear from him.

[4]Before I consider the grounds of appeal set out in the Notice of Appeal I should just say this about the Judge's reasoning. With respect to him, I am not sure that the analysis in terms of "genuine pre-estimate of loss" is correct. That evokes a line of authorities about clauses which purport to liquidate future losses caused by a breach of contract. The £500 stipulated in the present case – as, NB, a maximum not a fixed sum - is to cover expenses incurred during the period of the employment and which will therefore have been incurred at the time that the clause operates.

[5]Nevertheless, I would reach the same conclusion as the Judge on the evidence which he heard simply by way of construction of the contract. As I read it, the right to deduct arises only and if and to the extent that training costing at least the amount deducted has in fact been given. On that basis the Judge's finding of fact that no material training of any kind had been provided would preclude recovery under the clause. (In passing, I would recognise that there might well be difficulties in any particular case in demonstrating the cost – or, it may be, the value - of training said to have been given; but those difficulties would certainly not be insuperable if proper evidence were put before the Tribunal.)

[6]I return to the grounds of appeal raised by the Appellant. The material part of the grounds reads as follows:

"It is clear from the judgement that no reference has been made to the attached form signed by Mr Quigley (copies already sent to the tribunal) demonstrating extensive training financially justifiable at considerably more than £500. We believe therefore that the tribunal has not properly considered the documentary evidence that clearly demonstrates that the deduction was not a penalty and as such should not be considered so when judging the law as pointed out in point 6."

The attached form is a record of the Claimant having gone through a two-day induction process at the start of his employment, which is signed by him under the declaration "I agree that I have undertaken and understood the above training". The Claimant has confirmed to me that the form in question was before the Tribunal and that it had regard to it. The only point which the Appellant can accordingly make is that if the Judge had given the form proper weight he would inevitably have found that training to the value claimed had been given. That seems to me a hopeless submission. The form itself merely indicates that the Claimant had, over a one-and-a-half-day period, what might be described as a conventional induction, under such headings as "what are we looking for in an employee", "what difference can a website make to a company?", "cold calling", and so forth. Without any further evidence or guidance it would be quite impossible for the Tribunal to be satisfied that material of this kind constituted training of the type contemplated by Clause 5.2. If the Appellant wished to argue that that was the case, it was its business to turn up at the hearing and advance such an argument with any supporting evidence that might have been helpful. As I have already noted it did not do so, and the Tribunal cannot be criticised for taking the view that the form, such as it was, had no real weight against the Claimant's evidence that nothing that he received constituted training in any real sense. In those circumstances this appeal must be dismissed.