Fahey v Plymouth Hospitals NHS Trust

An employer may deduct wages only where the deduction is required or authorised by statute, authorised by a relevant contractual provision, or previously agreed by the worker in writing under section 13 of the Employment Rights Act 1996. A tribunal cannot infer contractual authority for a deduction from oral assertions or correspondence where the contractual documents before it contain no such term. In the absence of proved authority, the deficiency is an unauthorised deduction and the worker is entitled to recover it.

The claimant was absent through ill health and, during her notice period, received basic pay from her employer. The employer made deductions said to reflect incapacity benefit which it assumed she received.

The Plymouth Employment Tribunal dismissed her complaint under section 23 of the Employment Rights Act 1996, finding that she had received all sums due. She appealed on the ground that the employer had not established any statutory, contractual or written-consent authority for the deductions.

1. Appeal allowed. The Employment Tribunal was bound on the evidence to find that the deductions were unauthorised. The respondent was ordered to pay the claimant £654.49.
2. Section 13(1) of the Employment Rights Act 1996 prohibits deductions unless they are authorised by statute or a relevant contractual term, or the worker has previously consented in writing. Section 13(3) treats a shortfall in wages properly payable as a deduction. No relevant statutory exception under section 14 applied.
3. The respondent accepted that the contractual documents before the Employment Tribunal contained no term requiring or authorising deductions for assumed incapacity benefit. There was also no written consent.
4. The Tribunal could not infer an unproduced contractual authority from witness evidence about benefit entitlement or from correspondence referring to pay less “incapacity benefit assumed”. Those matters could not overcome the absence of authority in the contractual documentation actually before it.
5. The Registrar had correctly refused the respondent permission to adduce further contractual documents on appeal. If those documents were said to form part of the contract, that case had to be advanced before the Employment Tribunal.
6. Any issue whether the claimant must repay benefits to the Department for Work and Pensions was outside the Appeal Tribunal’s concern. Recoupment provisions did not apply to an award under section 23.

• Employment Appeal Tribunal: appeal allowed from the Plymouth Employment Tribunal’s judgment of 12 April 2011 dismissing the unlawful-deduction complaint; the respondent was ordered to pay £654.49.
• Plymouth Employment Tribunal: dismissed the claimant’s claims, including the complaint under section 23 of the Employment Rights Act 1996.