Tradition Securities and Futures SA v Mouradian

For the purposes of an unlawful-deduction claim, a bonus is wages where the contractual mechanism has produced an ascertainable amount payable to the worker. An employer cannot convert a quantified wage claim into an unquantified claim merely because the contract contains a discretion about allocation or the form of payment, where the relevant discretion has already been exercised. The Employment Tribunal may make the factual findings needed to decide whether the sum claimed is quantified. A discretion over whether payment is made in cash, into a pension scheme or into an employee benefit trust concerns the form of payment, not the amount of wages due.

The respondent, employed by the appellant as head of a trading desk, claimed £92,571.60 as an unlawful deduction from wages. The sum represented the shortfall in a bonus pool after the appellant deducted costs which, for the jurisdiction issue, were accepted not to be contractually deductible.

The Employment Tribunal held that it had jurisdiction because the respondent had already exercised the contractual discretion to allocate the bonus and was entitled to the balance of the properly calculated pool. The Employment Appeal Tribunal dismissed the appeal. The Court of Appeal considered whether the claim was for a quantified sum of wages and whether the contractual discretion over the form of payment prevented jurisdiction.

1. Appeal dismissed. The respondent’s claim was for a quantified sum of wages, rather than unquantified damages for breach of contract.
2. The contractual discretion to divide the bonus among desk members had been exercised. On the Employment Tribunal’s unchallenged findings, the respondent had decided what his team members would receive and that the balance of the bonus pool was his. The fact that the pool was subsequently understated did not make the balance a mere loss of a chance.
3. The Employment Tribunal was entitled, and required, to make factual findings relevant to jurisdiction. It was necessary to determine whether the claim concerned a quantified sum properly payable or an unquantified contractual claim.
4. The discretion in clause 5.2.4 concerned only the form of payment. Once the bonus had been declared in cash terms, the amount payable remained quantifiable irrespective of whether payment was made by bank transfer, cash, an employee benefit trust or a retirement scheme. The bonus therefore fell within “wages” for the purposes of section 27(1)(a) of the Employment Rights Act 1996, and the Tribunal’s jurisdiction was not excluded.
5. The Court agreed with the Employment Tribunal and the Employment Appeal Tribunal and dismissed the appeal.

• Court of Appeal (Civil Division) — Appeal dismissed.
• Employment Appeal Tribunal — HHJ Peter Clark dismissed the appellant’s appeal from the Employment Tribunal: UKEAT/0570/07/RN.
• Employment Tribunal — Held that the Tribunal had jurisdiction to determine the unlawful-deduction claim because the bonus was a quantified sum properly payable.