J Biddulph v Eastern Counties Leather (In Partnerships)

An appellate tribunal will permit a new point of law only in exceptional circumstances. The absence of a need for further evidence is relevant but not decisive. Permission will ordinarily be refused where the point is inconsistent with the party’s pleaded case and evidence below, appears to have been withheld for tactical reasons, and lacks merit.

An informal, interest-free loan not offered to the public generally may be an exempt credit agreement under the Consumer Credit Act 1974 framework. A contractual term permitting deductions from salary or other payments due may authorise recovery of an outstanding loan from final pay, where no agreement confines repayment to commission.

The claimant, a website manager, alleged that a £10,000 payment made during his employment was commission. The Employment Tribunal at Bristol found that it was an interest-free loan. It dismissed his unlawful-deduction and notice-pay claims, upheld the employer’s counterclaim for the unpaid loan balance of £7,766.47, and awarded a small sum for accrued holiday pay. It later dismissed his reconsideration application.

On appeal, the claimant accepted the finding that the payment was a loan but argued for the first time that it was unenforceable under the Consumer Credit Act 1974. He also contended that the loan could be set off only against commission and challenged the calculations. The central issues were whether he should be allowed to raise the new point and whether the contractual deduction and counterclaim were lawful.

1. Appeal dismissed. The Employment Appeal Tribunal refused permission to advance the new consumer-credit point. Applying Secretary of State for Health v Rance [2007] IRLR 665, the discretion to allow a point not taken below is tightly controlled and is exercised only exceptionally.
2. The absence of any need for further evidence did not make this an exceptional case. The claimant’s new argument depended on the £10,000 being a loan, whereas his claim form and evidence had squarely asserted that it was commission. He could have pleaded the consumer-credit argument in the alternative. The tribunal inferred that he had omitted it tactically. It would be unfair and inefficient to permit an unsuccessful party to advance, on appeal, a case founded on facts inconsistent with that party’s earlier case.
3. The new point was also weak. The loan was a credit agreement, but it was exempt from regulation. It was not offered to the public generally, carried no interest or other charge, and therefore fell within regulation 60G(3) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Non-compliance with requirements for regulated agreements could not make this exempt loan irrecoverable. This was an alternative basis for dismissing that ground.
4. The Tribunal correctly construed clause 7.6 of the employment contract. It authorised deductions from salary or other payments due for money owed to the partnership. The evidence supported the finding that commission might have been used to repay the loan if a scheme were agreed, but no such scheme or restriction was agreed. The employer could therefore deduct final salary, accrued holiday pay and expenses, and recover the remaining balance by counterclaim.
5. The fresh medical evidence concerning a former witness was admitted. It related to developments after the Tribunal hearing, was credible, and was relevant to the appeal. It caused no prejudice, although the Tribunal’s existing findings meant that no remittal or further evidence was required.

• Employment Appeal Tribunal: dismissed the claimant’s appeal in [2025] EAT 56.
• Employment Tribunal, Bristol: dismissed the principal wages and contract claims, upheld the employer’s counterclaim for £7,766.47, and awarded £471.13 for accrued holiday pay. Its reconsideration judgment dated 15 May 2024 dismissed the claimant’s challenge to the calculations.