ABELLIO EAST MIDLANDS LTD v MR K THOMAS

The Employment Appeal Tribunal held that a claim in unjust enrichment for a quantum meruit cannot be brought under Part II of the Employment Rights Act 1996 because the statutory concept of "wages" requires the sums to be consideration for work done or to be done under a subsisting contract of employment (applying Delaney v Staples [1992] 1 AC 687). The EAT emphasised that a quantum meruit is an entitlement arising outside the subsisting contract and therefore falls outside the statutory definition of "wages" in section 27 ERA.

As a subsidiary matter, the EAT accepted the tribunal's factual finding that the claimant's role at Nottingham was an "entirely different" position with greater responsibilities. That factual finding meant, had the tribunal had jurisdiction under Part II, the claimant would have been entitled to recover on a quantum meruit because the work went beyond the scope of his original contract. The primary legal consequence was that any quantum meruit claim must be pursued in the ordinary courts, not in the employment tribunal.

Background and procedural posture: The claimant, an Area Manager who moved from Leicester to take over the Nottingham area, claimed unlawful deduction from wages under Part II of the Employment Rights Act 1996 for the unpaid difference between his existing salary and the higher salary he said he was entitled to (£52,000). The Employment Tribunal (Nottingham) found he was entitled to a quantum meruit for the Nottingham role and that the unpaid difference amounted to an unlawful deduction. The respondent appealed to the Employment Appeal Tribunal; the ET judgment was sent to the parties on 19 January 2021.

Nature of the claim / relief sought: The claimant sought payment of the higher salary or, in the absence of an enforceable express agreement, an award on a quantum meruit for work performed in the Nottingham role, brought as a claim for unlawful deduction from wages.

Issues framed by the court:

• Whether a quantum meruit (unjust enrichment) claim can be brought under Part II of the Employment Rights Act 1996 as an unlawful deduction from wages;
• Whether, on the facts, the claimant's work at Nottingham fell within or beyond the scope of his existing contract such that a quantum meruit would be payable.

Reasoning and outcome: The EAT held that Part II of ERA is not a suitable jurisdiction for quantum meruit claims. Relying on Delaney v Staples, the court explained that the statutory concept of "wages" presupposes sums payable for work done under a subsisting contract of employment; a quantum meruit typically arises where the work performed is outside or in excess of the contract or where no contract exists. The EAT also identified practical and doctrinal difficulties in accommodating unjust enrichment claims within Part II (for example, determining the "occasion" of payment, quantification prior to court assessment, and specialist pleading and evidential requirements). As to the facts, the EAT accepted the tribunal's finding that the Nottingham role was "entirely different" and therefore outside the scope of the original contract; had the tribunal had jurisdiction, a quantum meruit award would have been justified. The appeal was allowed and the ET judgment set aside insofar as it proceeded under Part II; the proper forum for the quantum meruit claim is the ordinary courts.

Appeal allowed. The EAT held that a quantum meruit claim in unjust enrichment cannot be pursued under Part II of the Employment Rights Act 1996 because the statutory concept of "wages" requires payment for work done under a subsisting contract (Delaney v Staples). The tribunal’s factual finding that the Nottingham role was "entirely different" meant the claimant’s work went beyond the original contract and so a quantum meruit would have been available, but that remedy must be sought in the ordinary courts rather than as an unlawful deduction from wages.

Appeal from the Employment Tribunal (Nottingham), judgment sent to the parties on 19 January 2021; appealed to the Employment Appeal Tribunal, neutral citation [2022] EAT 20 (this judgment).