Topic 4: Wages and Working Time Flashcards
(91 cards)
Does the NLW and the NMW and rights under the WTR apply to all workers?
yes
Devonald
At common law the wage/work bargain can be enforced by civil action in debt - failure of employer to perform a contractual obligation.
If successful, the employer may be liable for an award of damages:
Wakefield
HL
The claimant was a superintendent registrar of Births Deaths and Marriages. His union instructed him not to conduct weddings on Saturdays.
The refusal to conduct marriages on the Saturday was met with deduction of 3/37ths (3 out of number of hours he normally works a week) of his weekly salary.
Held: The deductions were proper. although the registrar did other duties on Saturdays, the employer was entitled to refuse to accept less than full performance. However, as Freedland points out, some of the judges suggested that the employer might have been entitled to refuse to pay him any of his monthly salary. This suggestion gained track in Wiluszynski.
Kleinwort Benson
Laid down that employer can recover an overpayment of wages by mistake, unless employee can show three things:
- employer led them to believe the money was theirs.
- employee acted on good faith (Spent the money),
- overpayment was not caused by their own fault.
Avon v Howlett
employee succeeded in showing the Kleinwort Benson factors so they were able to keep the payment.
Adcock
Court of Appeal
What is ‘properly payable’?
where there is an identifiable sum and the employee can point to a quantified loss.
a requirement to consider making a payment under an incentive scheme did not amount to a legal obligation because: ‘the underlying premise … is that the employee is owed a specific sum of money by way of wages which he asserts has not been paid to him’ (per Wall LJ)
Brewery employees were entitled to an allocation of shares in their employer’s holding company, based on a proportion of annual group profits, at the discretion of directors. This generally resulted in each employee receiving a bonus of about 4–5% of his or her annual wage.
However, then targets were not met and no payments were made under the scheme.
a complaint of unlawful deductions from wages. This statutory regime applied to cases where an employee is owed a specific sum of money by way of wages which he or she asserts has not been paid to him or her. Accordingly, it applied to essentially straightforward claims, where the employee can point to such a quantified loss. By contrast, the claims in the present case were based on the premise that there was an obligation to replace the previous share scheme.
Giraud v Smith
As a general rule, however, the common law allows for deductions from wages for losses suffered by the employer unless the deduction is excessive:
Facts: Mr Smith worked as a driver. He was required to give four weeks’ notice of termination of employment. There was a clause in his contract stating that, “unless agreed otherwise, failure to give the proper notice and work it will result in a deduction from your final payment equivalent to the number of days short.” When Mr Smith left without giving notice, his employer refused to pay him.
The EAT agreed with the employment tribunal and held that the clause in the contract was an unlawful penalty clause rather than a lawful liquidated damages clause. A contract of employment may contain a liquidated damages clause, provided it is a genuine pre-estimate of loss and not a penalty. Under the clause in this case, even if the employer suffered no loss at all, the employee was liable for the whole sum. It was held to be unenforceable.
EAT were influenced that:
- the worker who was a driver, could be easily replaced, so that any lossess sufferred byt he employer would probably be minimal.
- Contrasting El-Hajjali = each case needs to be considered on its facts/
El-Hajjali
clause requiring newly hired worker with highly specialist skills to make a payment to the company if they failed to start work. Penalty clause if you failed to start work. Held: lawful because In this situation highly skill/specialised, difficult to recruit someone and agreement pre estimated employers losses in this situation. This does not happen often.
Delaney v Staples
Protection in retail
The claimant had been dismissed but had been given no payment in lieu of notice. She claimed to the Industrial Tribunal that this was an unlawful deduction from her wages
A payment in lieu of notice arose from the termination of the employment contract not from a request for payment for services done, rather than to the provision of services by the employee, and were not ‘wages’.
Held: payment in lieu where someone summarily dismissed is not wages. Necessary to show summarily dismissal was breach of contract and then this would be wages.
Kerr
tribunal found that if the deduction is made under a provision of the worker’s contract then the worker must have seen the term. A notice in a factory on the notice board was not a sufficient way to communicate a lawful deductions clause.
Bristow v City Petroleum
Retail worker
There must be transparency, so the agreement to deduct must be clear
Transparency clause
Sim v Rotherham MBC
Deductions for industrial action – s14(5)
Teachers are contractually bound to comply with the head’s reasonable directions for the proper administration of the school, which includes “cover” for absent colleagues. The plaintiffs were teachers employed in a secondary school. It was their normal practice to “cover” for absent teachers. Following union instructions they refused to do so, but remained at school occupied in their normal tasks. The employers deducted a small part of their salary for “breach of contract,” The actual written contracts were silent on this point. The teachers issued writs asserting that they were not contractually bound to cover for absent colleagues.
Held, that the deductions were properly made; teachers were professionals and it was their contractual duty to discharge all their professional obligations which included the head’s reasonable directions on the proper administration of the school
Wiluszynski
refusal to reply to councillors’ enquiries during an industrial action. This amounted to a few hour’s of work over a period of several weeks. The council make clear that it would not accept or pay for anything other than full performance of his duties, adnd that any work he did during the industrial action would be voluntary.
CA upheld employer’s right to refuse any payment. the council made clear that it would not accept partial performance of duties - was entitled to deduct wages in full.
Important:
The council had not undermined its statement that it would not accept partial performance
- it had not given him work
- or instructed him during the industrial action
and there was no obligation on the council to prevent him from working.
CRITISISM: Mead questions whether analysis in Wiluszynski is correct as a matter of contract law. The employee’s repudiatory breach entitled the employer to terminate the contract and dissmiss the employee. But if the employer elects not to do this, the employer must be ready and willing to perform its side of the bargain. Therefore, unless the action short of a strike deprives the employer of substantially what it bargained for, it should still make some payment ot the employee. Since the employer is entitled to damages for breach from the employee, the employer wuld be entitled to reduce the paument to reflect the damages. In some cases, this would mean that no pay was due. In cases like Wiluszynski where the harm to the employer was small, it might be argueable that some payment was still owed to the employee.
Another suggestion by the courts and some commentators is that the employees could bring a claim in unjust enrichment. Burrows thinks this. However, this is hard to argue that the employer is “unjustly” enriched when it makes it clear that it does not want the employee to perform.
Devonald v Rosser
This is the common law position, but now we have a statutory position
Prima facie entitlement to be paid wages for the period of lay-off and for any period of notice was established at common law.
The courts here extended protection to other groups of employees by developing the idea that it is the employer’s responsibility to provide employees with work so that they have an opportunity to earn money
They are entitled to damages but not a right to work.
Craig v Bob
– contract allowed for periods of lay-off and short-term working for an indefinite period - no implied term of reasonableness as to the length of lay-off
The Claimant was employed by the Respondent as a draughtsman from October 2004 until August 2014, when he resigned and claimed constructive unfair dismissal following a four week period when he was laid-off without pay. He claimed that the lay-off had extended for a period longer than was reasonable and that the Respondent was accordingly in repudiatory breach of contract, notwithstanding the Respondent’s express contractual right to lay off staff for an indefinite period without pay.
The EAT dismissed the appeal. Parliament had provided a statutory scheme for balancing the rights of employers and employees in circumstances where both were adversely affected by a short-lived downturn in business. That scheme provided for a four-week period, during which there was no entitlement to claim a redundancy payment, which left little room for any term implied by common law to operate. In any event, even were there an implied term that a period of lay-off would extend no longer than was reasonable, Parliament had set out a four-week benchmark, from which “there would have to be cogent, well-evidenced reasons to depart” and there were no such reasons in this case.
Nowadays workers who are laid off are often described as being on
gardening leave
provision in contract of employment where an employee is required to serve a period of notice at home
Ashcourt Rowan v Hall
Only if the person is not performing their duties are they on garden leave
Abercrombie v Aga
claimant agreed to temporarily work for 4 days a week, they agreed to work mon-Thursday because market conditions had worsened, this would avoid redundancy situation. However, the employer refused to pay them a guarantee payment for the fifth day. They raised this as a grievance. Held: notwithstanding fact they agree to work only 4 days, this did not preclude them from the guaranteed payment because their contract was to work 5 days. Agreement to work 4 days, legitimate to expect that NORMALLY they would be working on a Friday so should receive guarantee pay,
The Court of Appeal allowed the appeal in all three respects. First, during the currency of the Agreement (to work 4 days instead of 5) Fridays remained days on which they were “normally” contractually required to work, and in so far as work was not provided for them on those days they were workless days within the meaning of Part III ERA 1996 in respect of which they were entitled to guarantee payments.
The ERA s28 provides for employees, without protection under their contract, to have a limited right to “fall-back pay” - a ‘guarantee payment’ - for each ‘workless day’. The current rate is £28 per day – but only for a maximum of five days – so £140 - in any three-month period:
Howman
In the absence of an express term (entitling him to sick pay) in the contract it may be possible to imply a term.
custom of the industry was that there was sick pay, so sufficient applying custom and practise approach.
Mears v Safecar
In the absence of an express term (entitling him to sick pay) in the contract it may be possible to imply a term.
employer’s practice well known the practice. = Had parties put their minds to it, they would have agreed and thought it was reasonable for sick pay.
Aspden v Webbs
In the absence of an express term (entitling him to sick pay) in the contract it may be possible to imply a term.
Sufficient evidence that there would have been an agreement for sick pay.
What happens if there is no contractual term of sick pay in contract?
Employees can fall back on Statutory Sick Pay (SSP) if there is no contractual term.
SSP is paid for each ‘day of incapacity’ during a period of at least four consecutive days of incapacity (including days not normally worked). Entitlement period lasts up to 28 weeks – the employee then transfers to social security benefits. SSP is currently £92.05pw.
Nomura
the High Court established that employers, when deciding whether to award discretionary bonuses, must not behave irrationally or perversely.
Mr Clark had earned substantial profits for the company during the relevant period.
Other senior employees, including one whose department made a loss, were awarded substantial bonuses. C sought damages for breach of contract in failing to make payment of any bonus.
For an employer exercising a discretion to be found to be in breach of contract, it must be shown that no reasonable employer would have exercised the discretion in that way and that was expressed as being a test of irrationality or perversity.
Commerzbank v Keen
rule that no annual bonus award if at date of payment, the employee is no longer employed by the bank.
Someone could be paid by bank for 9 months of year and then get another job, the would not get bonus for that period that they would be there. He got no bonus, and so claimed there was a breach of contract to not exercise the bank’s discretion irrationally or perversely.
That said, the bank did make substantial bonus awards in 2003 and 2004, and although this was less than Keen had hoped for, it could not be said to have been irrational, arbitrary or perverse, which Keen would have had to show if he wanted to challenge the amount. Moreover, not irrational not to make a payment.
The principle arising from this judgment is that employers do have discretion but this must not be irrationally, perversely or arbitrarily exercised.
