Eastern Eye (Plymouth) Ltd v Hassan & Anor

Where a tribunal’s reserved findings introduce a factual basis which materially alters the statutory calculation of an award, it may be in the interests of justice to permit reconsideration even though the point was not advanced at the substantive hearing.

Living accommodation may count towards national minimum wage remuneration within the permitted statutory amount, notwithstanding the absence of a contractual right to deduct it. A deduction thereby authorised by statute is not unlawful under Employment Rights Act 1996, section 13.

Compensation for unfair dismissal must reflect tax and National Insurance which would have been payable on the wages properly due. It must compensate actual loss, rather than place the claimant in a better financial position.

The employer appealed from the Bristol Employment Tribunal’s refusal to reconsider aspects of its reserved substantive judgment. The Tribunal had found that each claimant had paid £30 per week for accommodation provided by the employer, and had awarded unpaid wages and other compensation.

The appeal concerned whether that accommodation sum could lawfully count towards national minimum wage remuneration, and whether Mr Singh’s unfair-dismissal compensation should have been assessed net of tax and National Insurance. The employer also sought its appeal fees from Mr Singh.

1. Appeal allowed. The Employment Tribunal erred in refusing reconsideration. Its reserved findings had established that £30 per week was deducted from each claimant for living accommodation. That factual finding engaged the statutory national-minimum-wage regime, although the employer had not advanced the point at the merits hearing.

2. Under Regulations 30 and 36 of the National Minimum Wage Regulations 1999, living accommodation is an exception to the general rule excluding benefits in kind from national-minimum-wage remuneration. The employer could count £30 per week for the accommodation towards its minimum-wage liability. The absence of a contractual right to deduct that amount did not prevent that result. The deduction was authorised by statute for section 13(1)(a) of the Employment Rights Act 1996 and was therefore not an unlawful deduction.

3. The ordinary reluctance to reopen a point omitted at the original hearing did not govern these circumstances. The reserved judgment had created a specific factual foundation requiring a statutory calculation which had not been addressed. The interests of justice required reconsideration.

4. The Tribunal also erred by assessing Mr Singh’s compensatory award on a gross basis merely because his actual pay had not been taxed. Once it had correctly calculated his entitlement at national minimum wage rates, tax and National Insurance would have been payable. A net award was required to avoid overcompensation.

5. The EAT made the corrections itself. Miss Hassan’s total award was substituted at £5,459. Mr Singh’s award was reduced first for accommodation and then by £529.62 for tax and National Insurance, producing a substituted total of £8,493.28. The application for appeal fees under the EAT Rules 1993 was refused. The employer’s prior conduct, its failure to raise the points below, and the late warning to Mr Singh meant that a costs order would not be just.

• Employment Appeal Tribunal: Allowed the employer’s appeal, quashed the Tribunal’s awards to the relevant extent, and substituted corrected awards.
• Bristol Employment Tribunal: Refused the employer’s reconsideration application concerning unlawful deductions and the calculation of Mr Singh’s compensatory award. The underlying reserved judgment had been sent to the parties on 20 February 2014.