Read v Ryder Ltd

Article 4(d) of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 permits an employer’s counterclaim only where the employee’s proceedings were brought by virtue of that Order. This requires either that the employee’s claim necessarily had to be brought under the Order or that it was unequivocally brought under it. A claim capable of being pursued under ordinary employment legislation, including Part II of the Employment Rights Act 1996, does not satisfy Article 4(d) merely because it could also have been brought under the Order. In the absence of that jurisdictional condition, the Employment Tribunal cannot determine the employer’s counterclaim.

The employee claimed arrears of pay and holiday pay said to be due in his final pay cheque. The employer relied on an agreement requiring repayment of training costs and brought a counterclaim for the balance.

The Employment Tribunal rejected the employee’s claim and awarded the employer £758.43, holding that it had jurisdiction over the contractual counterclaim. The employee appealed, contending that Article 4(d) of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 was not satisfied because his arrears-of-pay claim could have been brought under Part II of the Employment Rights Act 1996.

Appeal allowed. The Employment Tribunal’s findings on the employee’s claim were not challenged, but paragraphs 2 and 3 of its judgment, including the employer’s award, were set aside.

1. Article 4(d) of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 is a necessary condition for an employer’s claim in the Employment Tribunal. The employee must have brought proceedings by virtue of the Order.
2. A claim is brought by virtue of the Order only if it necessarily had to be brought under the Order or was unequivocally brought under it. This gives effect to the apparent purpose of Article 4(d), which is to confine employer claims to cases where the employee has gone beyond the Employment Tribunal’s ordinary employment jurisdiction.
3. The employee’s claim was not properly characterised as notice pay. The ET1 showed a claim for salary for work done during the notice period and holiday pay. The holiday-pay claim could only be brought in the Employment Tribunal. The arrears-of-pay claim could be brought either under the Order or under Part II of the Employment Rights Act 1996 as an unlawful deduction from wages.
4. Because the arrears-of-pay claim was not unequivocally brought under the Order, Article 4(d) was not satisfied. The Employment Tribunal therefore had no jurisdiction to determine the employer’s counterclaim.

• Employment Appeal Tribunal: Allowed the employee’s appeal and set aside paragraphs 2 and 3 of the Employment Tribunal’s judgment.
• Employment Tribunal: Rejected the employee’s claim and awarded the employer £758.43, holding that it had jurisdiction to determine the employer’s contractual counterclaim.