R Moon v Slater & Gordon UK Ltd

The Employment Appeal Tribunal considered appeal and cross-appeal from a Cardiff Employment Tribunal judgment of 21 April 2021 involving claims of unlawful deduction from wages (bonus), harassment under the Equality Act 2010 and unfair dismissal by reason of redundancy. The EAT held that the tribunal had erred in its analysis of the unlawful deduction jurisdiction but that error was academic because, on the facts found, any bonus entitlement remained discretionary and no identifiable sum fell within the definition of "wages" in section 27(1) Employment Rights Act 1996; the EAT therefore dismissed the unlawful deduction complaint. The EAT upheld the tribunal's factual and legal approach on harassment under section 26 Equality Act 2010, finding no error of law or perversity in concluding that, objectively, the conduct did not have the required effect. On unfair dismissal the EAT found the tribunal had correctly identified redundancy as the reason for dismissal and reasonably treated Mr Morris as the independent decision maker; the unfairness finding (limited to absence of an appeal right) was left intact. The appellant's appeal was dismissed and the respondent's cross-appeal was allowed in part (on the unlawful deduction point).

Background and parties:

• The claimant (Mr Moon) brought multiple claims against his employer SLATER & GORDON UK LTD including unlawful deduction from wages alleging underpaid/withheld bonuses for financial years 2017 and 2018, harassment related to his disability and unfair dismissal said to be redundancy or motivated by other factors.
• The Cardiff Employment Tribunal found in the claimant's favour only on an aspect of unfair dismissal (that he had been denied an appeal against a redundancy dismissal). Other claims failed.

Procedural history:

• The claimant appealed; initial Notice of Appeal was rejected by HHJ Beard but later allowed to proceed by HHJ Tayler and a preliminary hearing by HHJ Tucker narrowed the grounds. The respondent cross-appealed. Procedural interlocutory hearings occurred (including decisions by John Bowers KC and HHJ Auerbach) and the appeal was heard by Mr Bruce Carr KC.

Nature of the application/claims:

• (i) unlawful deduction from wages under Part II Employment Rights Act 1996 seeking payment of bonuses;
• (ii) harassment under section 26 Equality Act 2010 arising from a meeting and contemporaneous communications while the claimant suffered anxiety and depression;
• (iii) unfair dismissal, with dispute as to whether redundancy was the true reason or whether dismissal was motivated by sickness absence, grievances or tribunal claims.

Issues framed by the court:

1. Whether the tribunal had properly applied the statutory definition of "wages" in section 27(1) ERA and Coors Brewery v Adcock in determining jurisdiction to hear a bonus claim as an unlawful deduction;
2. Whether the tribunal erred in law or perversely in concluding the conduct on 16 February 2018 did not amount to harassment under section 26 EqA (taking account of perception, other circumstances and reasonableness under s26(4));
3. Whether the tribunal properly identified the reason for dismissal and the decision maker when assessing fairness of dismissal under section 98 ERA, including whether there was manipulation or improper motivation.

Court's reasoning and outcome on each issue:

• Unlawful deduction: the EAT accepted that the ET had not analysed the section 27(1) definition of "wages" as closely as it should have; however Coors Brewery v Adcock establishes limits to Part II jurisdiction where an employer's discretionary scheme produces no ascertainable sum. On the tribunal's factual findings the claimant's case sought review of an allegedly improper exercise of discretion rather than recovery of an identified sum. Therefore the unlawful deduction claim failed for want of an identifiable amount.
• Harassment: the ET had followed the stepwise approach under section 26 EqA, accepted the claimant perceived an effect, examined the other circumstances and whether it was reasonable for the conduct to have that effect. The tribunal's factual findings (call was made with good intentions; limited appreciation of claimant's state at the time) supported its conclusion and the EAT would not interfere.
• Unfair dismissal: the ET had properly examined the existence of a redundancy situation, the consultation and pooling issues, and whether others had manipulated the decision. The ET accepted that Mr Morris acted as an independent decision maker; redundancy was the reason for dismissal although the tribunal concluded dismissal was unfair because no appeal was offered.

Wider context: the EAT noted the scope of Part II ERA is directed to claims for identifiable, quantifiable sums (a swift summary jurisdiction) and that alleged improper exercise of contractual discretion ordinarily sounds in damages/breach of contract rather than unlawful deduction jurisdiction.

The appellant's appeal was dismissed and the respondent's cross-appeal allowed in part. Rationale: although the Employment Tribunal did not address the definition of "wages" in section 27(1) ERA as precisely as it might have, Coors Brewery v Adcock and the tribunal's factual findings showed the claimant sought review of an employer's discretionary exercise rather than recovery of an identifiable sum, so the unlawful deduction claim was outside Part II ERA; the tribunal correctly applied section 26 Equality Act 2010 to dismiss the harassment claim and properly found redundancy to be the reason for dismissal while concluding unfairness arose from denial of an appeal right.

Appeal from the Cardiff Employment Tribunal (decision sent 21 April 2021). Notice of Appeal initially rejected by HHJ Beard (22 November 2021); appeal later allowed to proceed by HHJ Tayler (6 December 2022) with directions; preliminary hearing by HHJ Tucker (order dated 9 July 2023) directed a full hearing on three grounds; procedural rulings by John Bowers KC and HHJ Auerbach permitted parts of the respondent's cross-appeal to proceed; final hearing before Mr Bruce Carr KC on 5–6 June 2024 leading to the judgment handed down 12 September 2024.