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Issue 95 (December 2004)

Contents

In the news
Discriminating over porn
Opting out
An update of trade union law
Hope fades for recognition
Jurisdictional deductions
Unequal pay
Time of transfer

Jurisdictional deductions

In two appeals about unlawful deductions of wages - Gill & ors v Ford Motor Co and Mr Wong & ors v BAE Systems Operations Ltd (2004, IRLR 840) - the employment appeal tribunal has decided that tribunals have to make findings of fact before looking at whether they have jurisdiction to hear the claims.

What does the law say?

Under section 13 of the Employment Rights Act, employers do not have the right to make deductions from a worker's wages without that person's written permission (which should be given in advance), unless there is a term in the contract that says they can.

However, there are at least two circumstances in which those provisions do not apply.

Section 14(5) says the employer can make a deduction if the worker has taken part in a strike or other industrial action; and section 14(1)(a) if it is to recoup an overpayment of wages.

What were the basic facts?

Gill & ors: After a night shift in May 2002, when some assembly line workers took unofficial industrial action, they were all given letters saying their pay would be stopped and they would lose their attendance supplement.

Mr Gill (and a number of others) denied they had taken part in the action, but said they could not work because the assembly line had stopped. The tribunal decided it could not hear their claim because section 14(5) meant that it was outside its jurisdiction, and that it would have to be heard in the county court.

Wong & ors: Mr Wong and 83 other workers brought claims because their employer made deductions for an overpayment of bonus made in March 2003. The employment tribunal stated that it could not hear their claim because of section 14(1)(a).

What did the parties argue?

Mr Gill appealed on the basis that the tribunal should have decided, as fact, whether he had taken part in the industrial action before deciding that it could not hear his claim.

Similarly, Mr Wong said the tribunal should have decided whether an overpayment had, in fact, been made. To do so, it should have investigated what bonus was payable to the appellants.

Both argued that if tribunals do not make findings of fact where they are disputed, employers would, in effect, have the power to decide if the county court or the tribunal has jurisdiction.

The employers, on the other hand, argued that tribunals were only required by law to establish the facts as far as their jurisdiction allowed. That meant they were not required to look into whether the deductions were contractually authorised in deciding whether section 14 applied.

What did the EAT decide?

The EAT allowed both appeals, saying that the tribunal in each case was wrong to decide that the men's claims of unauthorised deductions from wages fell within one of the excluded categories set out in section 14 of the Employment Rights Act.

Instead, it said they should have established the facts before concluding that they had no jurisdiction. Once the facts are established, it said that tribunals can then look at the employer's motivation for the deduction.

That, however, does not involve looking at the lawfulness of the deductions. In these cases, it meant looking at 'the purpose of the deduction' as reimbursement for an overpayment of wages; and looking at whether the deduction was made 'on account of that worker having taken part in that strike or other industrial action'.

Otherwise, as Mr Gill and Mr Wong had argued, the employer would be the one able to choose whether the employment tribunal or the county court had jurisdiction, without having to prove that the facts were true.