Buildmaster Construction Services Ltd v Ghada Al-Naimi

For an unlawful-deduction claim under Employment Rights Act 1996, section 13 requires two separate inquiries. First, the tribunal must determine the wages properly payable, including any contractual variation that affects entitlement. Secondly, if there is a shortfall, it must decide whether the statutory requirements authorising the deduction have been met.

An oral contractual variation may be relevant at the first stage. A tribunal does not err merely by noting the absence of written material where that evidence also bears on whether the alleged variation was made. Reasons are adequate if, read fairly and proportionately, they enable the parties and an appellate tribunal to understand why the central issue was resolved as it was.

The employer appealed against a London South Employment Tribunal decision awarding the claimant £9,750 for unlawful deductions from wages. The employer contended that the claimant had orally agreed, during the Covid-19 pandemic, to reduce her monthly salary from £2,400.

The Tribunal found that £2,400 per month remained properly payable and that the claimant had received less. It also recorded that there was no written material concerning a variation. On appeal, the employer argued that the Tribunal had wrongly treated writing as necessary for an oral variation and had failed to give adequate reasons.

The central issue was whether the Tribunal had conflated contractual entitlement with the separate statutory formalities governing deductions.

1. Appeal dismissed. The Employment Tribunal did not confuse the two stages of the statutory inquiry. It correctly directed itself that it must first identify what wages were properly payable and whether there was a shortfall, and then consider whether any deduction was authorised under section 13 of the Employment Rights Act 1996.

2. An alleged oral variation of the contract was capable in principle of affecting the wages properly payable at the first stage. However, the Tribunal’s findings showed that it rejected the employer’s new case that the claimant had agreed to such a variation. It found both that she should have been paid £2,400 per month and that this sum was properly payable.

3. The Tribunal was entitled to note that there was no written evidence of a salary variation. That absence was relevant evidence when assessing whether the asserted oral agreement had been made. Its further direction on the statutory formalities was correct, even if unnecessary as a matter of perfection, and did not infect its separate determination of contractual entitlement.

4. The reasons were adequate. They arose from a short hearing, involving a modest sum and a narrow issue. Read fairly and without hypercritical scrutiny, they made clear that the employer lost because its evidence of variation was not accepted and the claimant’s monthly entitlement remained £2,400.

• Employment Appeal Tribunal: In [2024] EAT 101, the employer’s appeal against the £9,750 unlawful-deduction award was dismissed. A separate appeal from a later Tribunal judgment was withdrawn following reconsideration and was dismissed.
• London South Employment Tribunal: Employment Judge Tsamados, in a judgment sent on 1 December 2022, awarded the claimant £9,750 for unlawful deductions from wages.
• London South Employment Tribunal: Employment Judge Rice-Birchall, in a judgment sent on 20 July 2023, awarded £12,000 for unlawful deductions. The judgment was reconsidered and corrected; the employer then withdrew its appeal.