ABELLIO EAST MIDLANDS LTD v MR K THOMAS

A claim in unjust enrichment for a quantum meruit is not a claim for “wages” within Part II of the Employment Rights Act 1996. Although Part II is to be construed broadly, wages must be consideration for work done or to be done under a subsisting employment contract. A quantum meruit for work outside the contract arises from a distinct legal source and does not fit the statutory machinery for determining the occasion, amount and time limit for an unlawful-deduction claim.

Where a subsisting contract exists, a quantum meruit may nevertheless be due for services requested by the employer which go beyond that contract’s scope. A tribunal’s finding that the employee performed an entirely different role may sufficiently establish that requirement.

The claimant was employed as Area Manager for Leicester on a salary of £42,000. At the employer’s request he moved to the more complex Area Manager role at Nottingham, with an anticipated salary increase. The parties did not agree its terms and the claimant did not accept proposed salary letters.

The Employment Tribunal rejected claims based on express agreement and on the proposed £48,000 salary. It nevertheless awarded £52,000 on a quantum meruit, treating the shortfall as an unlawful deduction from wages under Part II of the Employment Rights Act 1996.

The employer appealed. The central issue was whether a quantum meruit claim could be pursued through the unlawful-deductions jurisdiction.

1. Appeal allowed. The Employment Tribunal had no jurisdiction under Part II of the Employment Rights Act 1996 to award a quantum meruit. Its judgment therefore could not stand.

2. Part II should receive a broad, purposive construction. Its protection is not confined to payments arising contractually. Nevertheless, following Delaney v Staples, the essential characteristic of wages is consideration for work done or to be done under a subsisting contract of employment. A claimant must also be a worker, but a payment arising from another legal source will not necessarily be wages.

3. A quantum meruit for services outside the scope of an existing contract does not satisfy that core conception. It is not one of the specified forms of payment in section 27 and is materially unlike statutory holiday pay. The statutory scheme also fits such a claim only with difficulty: there may be no ascertainable occasion when payment became properly due, no fixed amount before judicial valuation, and no workable date for limitation.

4. The Tribunal’s alternative conclusion on entitlement to a quantum meruit was correct. A subsisting contract does not prevent recovery for additional work that goes beyond its scope. The finding that the Nottingham work was an entirely different role, at a different location and with greater responsibilities, was sufficient to establish that it fell outside the claimant’s original Leicester contract. Had Part II conferred jurisdiction, the appeal on that ground would have been dismissed.

5. Any quantum meruit claim had to be pursued in the ordinary courts rather than the Employment Tribunal.

• Employment Appeal Tribunal: Allowed the employer’s appeal and set aside the Employment Tribunal’s unlawful-deductions judgment.
• Employment Tribunal, Nottingham: Judgment sent to the parties on 19 January 2021. It held that the claimant could recover a quantum meruit through Part II of the Employment Rights Act 1996.