Buildmaster Construction Services Ltd v Ghada Al-Naimi

The Employment Appeal Tribunal dismissed the employer's appeal against an Employment Tribunal award for unlawful deduction from wages under section 13 of the Employment Rights Act 1996. The EAT confirmed the correct two-stage approach: (i) determine what wages were "properly payable" under section 13(3) and (ii) where a deduction is identified, consider whether one of the statutory formalities in section 13(1) and (2) authorised the deduction. The Tribunal did not err by conflating those stages, had adequately directed itself on the law, provided sufficient reasons to enable the parties to understand why they had won or lost, and properly rejected the employer's case of an oral variation of pay. The award of £9,750 for unlawful deductions was upheld.

Background and procedural posture. The claimant brought a claim for unlawful deduction from wages. The Employment Tribunal (EJ Tsamados) after a two-hour CVP hearing found that the claimant's proper monthly salary was £2,400, calculated a shortfall for the relevant months and awarded £9,750. The employer appealed to the Employment Appeal Tribunal. A second ET judgment (EJ Rice-Birchall) arising from similar pleadings was also in issue but any separate appeal arising from that judgment was withdrawn following reconsideration.

Nature of the claim and relief sought. The claim was for unpaid wages by reason of unlawful deductions under Part II of the Employment Rights Act 1996, with the tribunal asked to calculate the shortfall and order repayment.

Issues framed by the court.

• Whether the Employment Tribunal erred as a matter of law by conflating (a) the question of what was "properly payable" under section 13(3) and (b) the separate question whether statutory formalities in sections 13(1) and 13(2) authorised any deduction.
• Whether the Employment Tribunal gave adequate reasons for rejecting the employer's case that there had been an oral variation of the claimant's salary.

Court's reasoning and findings. The EAT set out the established two-stage approach: first decide whether the wages paid were less than the amount properly payable (section 13(3)) and, if so, secondly decide whether the deduction was authorised by statute, by a relevant contractual provision notified in writing, or by prior written agreement (sections 13(1) and (2)). The EAT concluded that the judge had correctly directed himself on the law at paragraphs 11, 29 and 30, twice emphasising the two-stage approach. The Tribunal made factual findings on payslips, the claimant's asserted basic salary of £2,400, and the payments actually made, producing the £9,750 shortfall. The Tribunal noted the absence of any written variation and, on the balance of probabilities, rejected the employer's late-pleaded case of an oral variation attributable to the Covid-19 pandemic. The EAT held that noting the absence of written documents was an admissible evidential observation and that the reasons given were adequate in the context of a short hearing, a modest sum and partly unrepresented parties. The EAT also observed that a different Employment Judge initially made a related error but corrected it on reconsideration; that correction did not indicate error in the Tsamados judgment. The appeal was dismissed.

Appeal dismissed. The Employment Appeal Tribunal held that the Employment Tribunal applied the correct two-stage test under section 13 of the Employment Rights Act 1996, did not conflate what was "properly payable" with the distinct formalities required to authorise a deduction, and provided adequate reasons for rejecting the employer's oral variation defence and for the award of £9,750.

Appeal to the Employment Appeal Tribunal from the judgment of Employment Judge Tsamados (sent 1 December 2022) of the London South Employment Tribunal awarding £9,750 for unlawful deductions. A related judgment of EJ Rice-Birchall (sent 20 July 2023) was the subject of a second notice of appeal that was subsequently withdrawn following reconsideration. The Employment Appeal Tribunal handed down its decision on 25 June 2024 dismissing the extant appeal.