Camden Primary Care Trust v Atchoe

The Court of Appeal considered whether the employer's removal of an employee from an on-call roster and the consequent withholding of on-call payments amounted to an unauthorised deduction under section 13 of the Employment Rights Act 1996. The court held that the correct starting point is to determine what wages were properly payable under the contract for the purposes of section 13(3). Relevant express and implied contractual terms must be considered, including an implied health and safety term which authorised removal from the roster.

The Employment Tribunal had treated the loss of on-call payments as an unlawful deduction, but the Employment Appeal Tribunal correctly held that where an employer acts within its contractual rights (including under an implied health and safety term) a resulting loss of income is not necessarily an unauthorised deduction. The Court of Appeal agreed that the ET had erred by failing adequately to take the implied term and the specific Whitley Council provisions governing on-call payments into account and dismissed the appeal.

The claimant, employed as a technician with an express contractual obligation to contribute to an out-of-hours on-call system, was removed from the on-call roster pending verification of technical qualifications. He alleged unlawful deductions from wages after he ceased to receive stand-by and call-out payments. Proceedings began at an Employment Tribunal which found that the claimant remained willing and able to perform on-call duties and that withholding the payments amounted to an unlawful deduction.

The employer successfully appealed to the Employment Appeal Tribunal which held that where an employer acts within the contract the resulting loss of income is not necessarily an unauthorised deduction, and that the ET had not properly addressed the effect of contractual provisions and relevant authorities. The claimant then appealed to the Court of Appeal.

The Court of Appeal framed the principal issues as: (i) what amounts were properly payable under the contract for the purposes of section 13(3) of the Employment Rights Act 1996; (ii) whether an implied term authorising suspension on health and safety grounds affected entitlement to on-call payments; and (iii) whether the ET had erred in law or in procedure.

The court reasoned that the determination of wages properly payable requires consideration of both express Whitley Council terms and implied terms. The Whitley Council provisions and the implied health and safety term meant that a technician who was not on the on-call roster had no entitlement to the stand-by payments. The ET had therefore erred in treating the withheld payments as unauthorised deductions. The Court of Appeal dismissed the appeal, agreeing with the EAT that no unauthorised deduction had been established; it also observed that procedural complaints about reliance on authorities require a showing of material unfairness before an appeal will succeed.

Appeal dismissed. The Court of Appeal agreed with the Employment Appeal Tribunal that the Employment Tribunal had erred by failing to take into account the relevant express Whitley Council terms and an implied health and safety term in the contract. Because Camden acted within its contractual rights in removing the claimant from the on-call roster, the resulting loss of stand-by payments did not amount to an unauthorised deduction under section 13 of the Employment Rights Act 1996.

Claim first heard by an Employment Tribunal (London Central) on 10 May 2005, which found for the claimant (unauthorised deduction). Employer appealed to the Employment Appeal Tribunal, which allowed the employer's appeal and substituted a finding that the complaint was not well founded (EAT order 22 August 2006). The claimant's appeal to the Court of Appeal was dismissed on 9 May 2007 ([2007] EWCA Civ 714).