YORKSHIRE MAINTENANCE COMPANY LIMITED v MR S FARR [2009] UKEAT 0084_09_1308

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2009] UKEAT 0084_09_1308

Case No Appeal No. UKEAT/0084/09

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

YORKSHIRE MAINTENANCE COMPANY LIMITEDAPPELLANT

MR S FARRRESPONDENT

Before

His Honour Judge Pugsley Mr B Beynon Mr Jr Rivers

Date 13 August 2009

[1]APPEARANCES For the Appellant MR M CARTER (Representative) For the Respondent (Debarred) SUMMARY PRACTICE AND PROCEDURE Unlawful deduction from wages This is an issue as to whether the judgment properly calculated the wages due. The more substantial issue is whether a clause in the contract requiring employees to obtain the signature of the client for the worksheets and stipulating that the failure to do so meant the employee would not be paid if enforceable as is a penalty. We remitted the case because we believed there were issues of fact to be resolved. HIS HONOUR JUDGE PUGSLEY Introduction Having heard Mr Carter, we really do think there are faults in this decision which we would not necessarily have found had we merely relied on his written submissions. He has brought the matter alive to us. I think there is a real issue here, and in due course, with the guidance of the Employment Tribunal, we will issue a transcript of the judgment suitably modified. Facts

[2]Mr Farr worked for Yorkshire Maintenance Company Ltd as a plasterer. He was part of a two-man gang. He was reliant on his co-operative, his other workmate, for transport as he could not drive and he was a labourer. He signed a terms of conditions letter confirming he had understood and read them when he joined the company, which was in July 2007. The company obviously (I say obviously but it is difficult to imagine any company would not these days) had a policy that employees were not allowed to drink whilst at work. (If I may say so, I should be very surprised that if any company involving construction work had any other policy in fact.) There had been some trouble about him attending work smelling of alcohol, but he had always maintained it was residual effects of drinking before starting work.

[3]At the time with which we are concerned Mr Farr together with his co-employee were working at a Mental Health headquarters at the Humber project. The firm operates not altogether surprising out of Hull. The position is that the employer was rightly concerned at the way in which this Claimant, Mr Farr, behaved. The company had received a complaint about the work. Nicky Clubley, the Manager of the Respondent, telephoned the Claimant to discuss the complaint but on the findings of fact made by the Tribunal the Claimant was not, as he claimed on site but at home.

[4]Neither the Claimant nor the labourer reported for work on Monday, 11 February. The tracer on the company vehicle used by the Claimant and his labourer showed the van was still parked at the labourer's house although both men should have been working on the site of the Healthcare Trust. When Nicky Clubley rang the Claimant he sounded drunk. She went to his flat. He was wearing tracksuit bottoms, slurring his words, and smelt of alcohol. He admitted he had been out celebrating the night before. Mr Carter by letter dated 13 February dismissed him for gross misconduct being under the influence of alcohol at a time when he should have been working. The Employment Tribunal Decision

[5]There were three issues for the Tribunal; was the Claimant guilty of gross misconduct, or were the Defendants liable for wrongful dismissal? The unanimous decision of the Tribunal was that the claim for damages for wrongful dismissal was misconceived and the Claimant's claim was dismissed. He was not entitled to any damages for breach of contract, nor entitled to money in lieu of notice in respect of the notice period. He was held to be entitled to some pay already accrued.

[6]Now, this is not said in criticism of Mr Carter, like many people he left it there because he had won on the main and substantive issues, but there were concerns. Mr Carter has been totally frank with us for which we are grateful. He made a claim, and no one is suggesting it was a claim not open to him before the Tribunal that he should be entitled to recoup from the Respondent in this appeal, the Claimant, for the considerable loss he had suffered as a result of the Claimant doing the job badly. We are not here trying the work done in the County Court, but the photos are themselves pretty strong evidence that the work was not done very well. We leave that for the moment.

[7]The Tribunal Judge Molyneux did not allow that aspect because he said the burden of proving it rested with the employer and no assessment was given as to the cost of the length of time taken by the Respondent to do that. It is fair to say that people can take a fairly rough and ready approach to this and not require things to be proved with myopic attention to detail but that is a decision, in our view, the Employment Judge was entitled to reach and we do not allow the appeal on that aspect of the matter. The appeal is dismissed in respect of that.although it is not altogether clear that this comes within the grounds of appeal.

[8]What, however, we are concerned about is this; taking up the picture from paragraph 25 onwards the Tribunal Chairman says this:

"25. At the Hearing the Respondent put forward an alternative argument for withholding the Claimant's pay. This concerned paragraph 4.3 of the Claimant's Contract of Employment. This states:- 'It is a customer stipulation that we forward on to them the original daily worksheets duly authorised by their representative as proof of work done. Failure by the employee to submit the relevant signed daily worksheets will be construed as a job not being done. The company reserves the right to deduct the requisite hours from your wages accordingly.' 26. At the Hearing included in the Bundle of Documents were worksheets for each day of the week commencing 4 February 2008. These were the works carried out by the Claimant and his Labourer at the Humber Mental Health NHS Trust. The Respondent's argument is that since the Claimant failed to get these worksheets signed meant the Claimant was in breach of Paragraph 4.3 which entitled them to withhold his weeks' pay and his holiday pay. 27. The Claimant's argument was that he never previously had his worksheets signed. The Tribunal notes that the Respondent had not previously relied on this ground and there had been no reference to it in the correspondence or in the ET3. 28. The Claimant did submit these worksheets. The only shortcoming was they had not been signed by the client's representative. The Tribunal note that the Respondent never previously raised this as a ground for refusing the Claimant's payment. It was only at the Hearing in August 2008 that this provision was put forward as an alternative to justify the withholding of the last week's pay and the holiday pay. 29. The Contract of Employment was drafted by the Respondent's staff. Where there is ambiguity, the provision has to be construed against the Respondent. The provision only entitles the Respondent to deduct 'the requisite hours from your wages'. This would appear to be a provision intended to be applied immediately to a recalcitrant employee. It cannot be construed in such a way as to enable an employer some six months after the dismissal to use this clause to justify continuing refusal to pay the Claimant his pay for his final week of work or his 1.6 days holiday pay. 30. Accordingly the Tribunal is satisfied that the Respondent has not establish that they were entitled to deduct the entire amount of the Claimant's last weeks' wages or his holiday pay reliance on Clause 4.3 or 5.1 of his Contract of Employment."

[9]We are concerned about this. It is true that the response could have could have been drafted in greater detail but we have been referred by Mr Carter to his statement, which sets out this matter. It is right to say that we think courts should be, and tribunals should be, very concerned that terms like this are subject, as the Tribunal said, to a considerable degree of scrutiny because it can be an area where there is a vastly disparity in economic power and can be an abuse by an employer of his economic power. To use a simple example, a modestly paid employee could in a high capital, high technology industry, for an act of minor incompetence cause thousands of pounds worth of damage and we would have grave reservations as to whether or not that type of clause would be fair, which could mean the employee just not being paid but his house being sold to satisfy a claim. Moreover, courts have to be alert to employers being judge and jury when an employer may in fact include an express term requiring an employee to repay certain costs and expenses.

[10]There are circumstances where one has to be clear that this is not a penalty and we have found the decision of Giraud UK Ltd v Smith

[2000] IRLR 763

a valuable case in considering the difficulty between penalty and a genuine pre-estimate of liquidated damages. It is common form, we know from our own judicial experience that local authorities, for example, send someone off for training and, this no doubt applies to the private sector as well, have a clause that you have to stay for a certain number of years to justify that. You cannot just use your employer as a means of getting a qualification in social work or business administration and then within six weeks of coming back go to another job which you have become eligible for by virtue of your employer's generosity in funding the qualification.

[11]But we do not think this has, if we may say so, been fairly and adequately explored. We think an employment tribunal ought to consider this argument. It is true it was not specifically pleaded, but we are bound to say that we do not think that in an employment tribunal, pleading points are taken against the employee and we do not think they ought to be taken against the employer. We ought to think a fair broad-brush approach should be fair on both sides, and it is in his statement.

[12]What concerns us, and why we are not deciding the point ourselves, is we consider it ought to be done in the context of a factual basis, but we do not want to trespass on the Employment Tribunal's province. But as described to us, we have not heard evidence about it, by Mr Carter we are bound to say we cannot see anything offensive in saying, "Many of my customers, if not the majority, will not pay unless we can produce the worksheets that a responsible customer has authenticated. That is the basis on which we will get paid. It is not oppressive to require an employee's hours to comply with a condition of his employment so that we get paid and he can get paid. And if he does not do so, he forfeits his right to be paid for that work." We think that is an argument that should have been considered by the Tribunal. Conclusion

[13]We therefore think that is the argument that ought to go back to another employment judge. Moreover, as this case involves an issue where there were three Members, we think that there should be three Members deciding it, but it should be a differently constituted Tribunal. So the appeal is allowed on that issue. We also allow the appeal on the mechanical quantification of exactly how many hours' work were done. We are not deciding the issue but on the issues raised in the skeleton argument we certainly think there is an issue as to whether or not the employee did do as many hours as would be suggested by the award made to him. This case goes back on the construction of paragraph clause 4.3 of the terms and conditions and also the calculation of the wages.