THE INDUSTRIAL TRIBUNALS

CASE REF:	756/15

CLAIMANT:			Patrick Raymond McCartan

RESPONDENT:	 Farrans (Construction), t/a a division of Northstone (NI) Ltd

DECISION
The unanimous decision of the tribunal is that  the claimant’s claim is in time and the claimant is entitled to an award of £21,993.60 in respect of a series of unlawful/unauthorised deductions from wages.

Constitution of Tribunal:
Employment Judge:	Employment Judge Crothers	
Members:			Mr A Burnside
				Mrs F Cummins

Appearances:
The claimant was represented by Ms Campbell, Barrister-at-Law instructed by Patrick Park Solicitors.

The respondent was represented by Mr B Mulqueen, Barrister-at-Law instructed by Tughans Solicitors.

THE CLAIM

1.	(i)	The claimant claimed that there had been a series of unauthorised deductions from his wages with effect from 3 August 2009 to the date of hearing.  It was the respondent’s contention that the claimant had consented to the withdrawal of certain weekly payments by virtue of his conduct over the past number of years since 3 August 2009.  Furthermore the respondent contended that the claimant’s claim was out of time, and that the claim could more properly be construed as a breach of contract claim in respect of which the tribunal had no jurisdiction, as the claimant continues to work for the respondent.  The tribunal made clear that it had no jurisdiction to deal with a breach of contract claim and the matter had to proceed under Part IV of the Employment Rights (Northern Ireland) Order 1996 (“the Order”).

	(ii)	The title of the respondent was amended to that shown above.

THE ISSUES

2.	The issues before the tribunal were:-

	(i)	Was the claimant’s claim out of time, and if so, should time be extended?

	(ii)	Subject to the above, is the claimant entitled to an amount in respect of a series of unauthorised deductions from wages?

SOURCES OF EVIDENCE

3.	The tribunal heard evidence from the claimant and, on behalf of the respondent from Don Creighton, Plant Manager, and Clifford Spence, Director (now retired).  The tribunal also received a bundle of documents agreed by the parties together with other documentation in the course of the hearing.

FINDINGS OF FACT

4.	The tribunal, having considered the evidence insofar as same related to the issues before it, made the following findings of fact on the balance of probabilities:-

	(i)	The claimant commenced employment with the respondent (“Farrans”) in January 1972.  He was made redundant on a Friday in August 1983 but started employment again with Farrans on the following Monday.  It was not disputed that the claimant had been receiving what were described as enhanced payments for a number of years since commencement of employment with Farrans, amounting to £75.00 gross per week.  An amount described as a bonus or enhancement was added in 1999 at £20.00 gross per week.  The tribunal was shown a pay advice slip dated 24 April 2009 which showed a figure described as overtime calculated at 6.25 hours at £12.02 an hour totalling £75.09 gross.  Another amount of £20.00 gross is shown on the same pay advice slip, described as a bonus.  In reality the £20.00 was paid when a company van provided to the claimant was withdrawn by the respondent.  The £75.00 figure related to the claimant travelling from home to work.  In his correspondence to Don Creighton dated 12 August 2009 the claimant refers to “removal of weekly travel pay”.  In his evidence before the tribunal the claimant also referred to the payment as relating to “travelling expenses”.  [Mr Spence in his evidence referred to the claimant being paid the amount for turning up for work every day].

	(ii)	On 8 April 2009 after a short meeting with Don Creighton and Colin Morrow, the claimant was handed a letter in the following terms:

		“Dear Raymond

RE: VARIATION TO TERMS AND CONDITIONS OF EMPLOYMENT

We refer to your meeting today, Friday 8 May 2009, with Mr Colin Morrow and the writer.

Please note that as a result of this meeting we are writing to you to give you twelve weeks notice that with effect from Monday 3 August 2009 your enhanced payments will be withdrawn.  From Monday 3 August 2009 onwards you will be paid for a basic 39 hour week, plus any overtime hours which you work.  Your £20.00 per week bonus and 6¼ hours enhancement at time and a half will cease.

In the past these enhanced payments were made at the discretion of our management to the Company’s employees.  However, in light of the fact that the current recession is severely affecting our industry we must therefore look at all cost reduction measures with regard to our business in an attempt to save jobs going forward.

If you have any questions with regard to this matter please contact Mr Jonathan Hunter or Mr Jim Leitch at the Company’s HR Department.  Telephone:  [...............].

Should you feel that you have been unfairly treated in this matter, then please be aware that you have the right to appeal this decision in writing within the next 10 working days to Mr Clifford Spence, the Director responsible for the Plant Department.  Should you decide to exercise your right of appeal a subsequent meeting will be organised for you with Mr Spence.

Yours sincerely
FARRANS (CONSTRUCTION) LIMITED

DON CREIGHTON
PLANT MANAGER”

	(iii)	No consideration appears to have been given to issuing a revised written contract to the claimant to take effect from 3 August 2009.  It is however clear that the context of what the tribunal is satisfied was a unilateral variation of contract, related to a time of recession and downturn in the construction sector which had led to 11 redundancies and other employees having benefits reduced or removed.

	(iv)	The tribunal was also referred to the claimant’s contract of employment dated 1 August 1983.  In paragraph 5 there is reference to the employee being required to transfer from one workplace to another and that “incentive bonus, if any, shall cease on transfer ...”.  For a period of about one year in or about 2001, the claimant worked between the Ford factory at Dunmurry and other premises owned by Farrans.  He was then transferred to the Farrans yard at the end of this arrangement.  The tribunal is satisfied that the £20.00 payment cannot be described as an incentive bonus and that it together with the £75.00 payment remained intact upon his return on a permanent basis to the premises in Dunmurry.

	(v)	The claimant appealed against the decision to remove his payments.  An appeal meeting was held on 26 May 2009.  The appeal was unsuccessful.  The tribunal considered the correspondence forwarded to the claimant by Clifford Spence dated 20 May 2009 preceding the appeal meeting together with notes of the meeting itself.  The outcome letter, signed by Clifford Spence as Director, includes the following:-

		“We acknowledge the concerns which you expressed to us at this meeting.  However, in light of the severe effect the recession is having on our industry and our business in particular we strongly believe that the decision Mr Creighton made to withdraw your enhanced payments was the right choice given the circumstances or the alternative of redundancies”.

	(vi)	The claimant again requested a meeting in correspondence dated 12 August 2009 (7 days after the variation took effect), in relation to the removal of what he described as “weekly travel pay”.  The terms of his request were as follows:-

				“FAO: Mr Don Creighton

				Dear Don,

			RE: REMOVAL OF WEEKLY TRAVEL PAY

	With regard to the above, I request a meeting with all relevant parties, to include my union representative, to discuss my concern over the proposed removal of my travel pay.

Yours sincerely

Raymond McCartan					12/08/09”

(vii)	Clifford Spence wrote to the claimant on 17 August 2009, referring to the previous appeal meeting and stating:-

		“We therefore now write to inform you that we will not be holding a second Appeal Meeting as there is no requirement to do so.  Our decision cannot be reversed due to the poor current trading climate which is affecting the local construction sector.  As you are no doubt aware during the last six weeks we have had to make seven members of the Dunmurry Plant Department redundant as well as four site based Plant Operatives.  On this basis we cannot justify reinstating your enhanced payments”.

(viii)	The removal of the payments had taken place with effect from 3 August 2009.  The claimant claimed that also in August 2009 he met a person in a public house with whom he discussed his situation.  It appears that reference was made to the removal of the payments as unlawful deductions.  Prior to this the claimant was of the view that what the respondents had done was above board and lawful.  However following the discussion in the public house he contacted his UCATT representative, Mr Kiddle, following which he requested the meeting referred to in the correspondence of 12 August 2009, referred to above.  

(ix)	The tribunal is not satisfied that there is sufficient evidence of the claimant having affirmed the unilateral variation of contract (whether by conduct or implied consent), when considered in the full context of his appeal, attempted “second appeal” and associated correspondence, the adjustment in his understanding of Farrans’ actions after his conversation with a friend in a public house, and the subsequent involvement of his union and latterly his Solicitor, albeit over five years later.

(x)	It appears that Mr Kiddle prepared tribunal papers relating to the alleged deductions from wages which the claimant signed and returned to him in December 2009.  It also appears that, thereafter, the claimant was given to believe that his case was being dealt with by Mr Kiddle on his behalf.  The tribunal does not consider it necessary to make factual findings in relation to the claimant’s interaction with various union representatives over an extended period of time, save to observe that he clearly felt let  down by his union and expected the matter to be taken forward by Mr Kiddle to the industrial tribunal.  It was not until October 2014 that he contacted Patrick Park Solicitors who then wrote to the Managing Director of Farrans on 14 January 2015 on the claimant’s behalf in the following terms:-

			“14 January 2015

Managing Director
Farrans (Construction) Ltd
99 Kingsway
Dunmurry
BELFAST
BT17 9NU	

Dear Sir

Re: My client – Mr Patrick Raymond McCartan of 3 Moytown Road, Aghagallon, Craigavon, BT67 OBA

Please note that I act on behalf of Mr Patrick Raymond McCartan, a 61 year old skilled Construction Operative who has been employed with your company since January 1972, and who has consulted me regarding the Company’s decision to withdraw his enhanced payments with effect from 3rd August 2009.  As your records will confirm, my client did not consent to this unilateral variation of his terms and conditions of employment.  My client referred the matter to his Trade Union namely, UCATT in 2009 since which time he has been patiently waiting for his Union to take action in respect of same and in the circumstances has now instructed me to act in this matter.

It is obvious from my instructions that my client had a contractual entitlement to the enhanced payments of £95.00 per week and the withdrawal of such weekly payment was an unlawful unilateral variation of my client’s contract of employment by the Company.  I calculate that to the week commencing 12th January 2015 the amount properly due and owing by my client in respect of the enhanced payments totals £26,980.00.

In an attempt to dispose of this matter on a mutually amicable basis, I would request that you please confirm that payment of such sum shall be remitted to my client within the course of the next 14 days and that his weekly entitlement to the enhanced payments of £95.00 will recommence forthwith.  Please note that in the absence of such confirmation, or satisfactory proposals to compensate my client within the course of the next 14 days, appropriate proceedings will be issued without further notice and use of this letter may be made in an application for costs against your company.  I trust that in all the circumstances it will be possible to resolve this matter on a mutually amicable basis.

Yours faithfully

____________
Anna McVeigh
Solicitor”

(xi)	The above correspondence clearly envisages the possibility of civil proceedings.  Such proceedings have been issued but not served.  

(xii)	Subject to liability, the parties agreed that the relevant calculation from 3 August 2009 until 13 April 2015 is £21,993.60 net.

THE LAW

5.	(i)	The relevant law is contained in Part IV of the Order.

	(ii)	Article 45 of the Order provides as follows:-

	“Right not to suffer unauthorised deductions

	45.‒(1) 	An employer shall not make a deduction from wages of a worker employed by him unless ‒

		(a)	the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or

		(b)	the worker has previously signified in writing his agreement or consent to the making of the deduction.

		(2)	In this Article “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised ‒

			(a)	in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or 

			(b)	in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.

		(3)	Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.

		(4)	Paragraph (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion.

		(5)	For the purposes of this Article a relevant provision of a worker’s contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect.

		(6)	For the purposes of this Article an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified.

		(7)	This Article does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be the subject to a deduction at the instance of the employer.

	(iii)	Article 55 of the Order provides as follows:-

		“Complaints to industrial tribunals

		55.‒(1)	A worker may present a complaint to an industrial tribunal –

		(a)	that his employer has made a deduction from his wages in contravention of Article 45 (including a deduction made in contravention of that Article as it applies by virtue of Article 50(2)),

		(b)	that his employer has received from him a payment in contravention of Article 47 (including a payment received in contravention of that Article as it applies by virtue of Article 52(1)),

		(c)	that his employer has recovered from his wages by means of one or more deductions falling within Article 50(1) an amount or aggregate amount exceeding the limit applying to the deduction or deductions under that provision, or

		(d)	that his employer has received from him in pursuance of one or more demands for payment made (in accordance with Article 52) on a particular pay day, a payment or payments of an amount or aggregate amount exceeding the limit applying to the demand or demands under Article 53(1).

	(2)	Subject to paragraph (4), an industrial tribunal shall not consider a complaint under this Article unless it is presented before the end of the period of three months beginning with ‒	

		(a)	in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or

		(b)	in the case of a complaint relating to a payment received by the employer, the date when the payment was received.

	(3)	Where a complaint is brought under this Article in respect of ‒

		(a)	a series of deductions or payments, or

		(b)	a number of payments falling within paragraph (1)(d) and made in pursuance of demands for payment subject to the same limit under Article 53(1) but received by the employer on different dates, 

			the references in paragraph (2) to the deduction or payment are [sic] to the last deduction or payment in the series or to the last of the payments so received.

	(4)	Where the industrial tribunal is satisfied that it was not reasonably practicable for a complaint under this Article to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is presented within such further period as the tribunal considers reasonable”.

	(iv)	Article 59(1)(a) of the Order defines wages as “any fee, bonus, commission, holiday pay or any emolument referable to his employment, whether payable under this contract or otherwise”.

	(v)	Article 59(3) provides that:-

		“Where any payment in the nature of a non-contractual bonus is (for any reason) made to a worker by his employer, the amount of the payment shall for the purposes of this Part (a) be treated as wages of the worker, and (b) be treated as payable to him as such on the day on which the payment is made”.

	(vi)	Under similar provisions relating to deductions from wages in the Employment Rights Act (not applicable in Northern Ireland), no deduction from a worker’s wages may be made unless either:

		“(a)	It is required or permitted by a statutory or contractual provision or 

		(b)	the worker has given his prior written consent to the deduction”.

	(vii)	In Discount Tobacco and Confectionary Ltd v Williamson [1993] ICR 371, it was held for there to be prior written consent, a consent must precede not only the deduction itself, but also the event or conduct giving rise to the deduction.  What has to appear in writing in either case is not merely provision for repayment of the sum concerned but for it to be deducted from wages (Potter v Hunt Contracts Ltd [1992] ICR 337).

		(See Tolley’s Employment Handbook 28th Edition 2014 at para 33.6).  

	(viii)	The tribunal also considered the relevant extracts from Harvey on Industrial Relations and Employment Law at B1 paragraph [327] ff.

SUBMISSIONS

6.	The tribunal was assisted by helpful oral and written submissions from both counsel and took into account the authorities referred to.  The written submissions are appended to this decision.

CONCLUSIONS

7.	The tribunal, having considered the evidence before it, together with the findings of fact, the relevant statutory provisions, and the submissions (both oral and written) and having applied the principles of law to the findings of fact, concludes as follows:-

	(i)	It is accepted that there is not a breach of contract case before the tribunal, as the claimant is still in Farrans employment.

	(ii)	The tribunal is satisfied that the regular weekly payments described as “overtime” and “bonus” in the pay advice slip dated 24 April 2009, were treated as wages although in reality relating to travel to and from work, and in lieu of a van previously provided to the claimant by Farrans respectively.  Travelling expenses are excluded from the definition of wages under Part IV of the Order.  Article 59(2)(b) specifically excludes “any payment in respect of expenses incurred by the worker in carrying out his employment”.  This was not a situation where the claimant presented a claim for expenses to Farrans or where expenses were claimed or recouped in any other way.  Rather, Farrans chose to calculate the larger of the two longstanding payments on the basis of 6.25 hours totalling £75.09 gross.  The tribunal is satisfied that those payments (including the £20 bonus) were in the nature of emoluments referable to the claimant’s employment and are therefore not within the exclusion for expenses (see generally Mears v Salt UKEAT/0522/11 EAT).  The question of whether a payment is wages or expenses is one of fact and degree.  (Southwark London Borough Council v O’Brien [1996] IRLR 420).  The tribunal therefore concludes that both payments are within the definition of “wages”.  A non-contractual bonus also counts as wages when payment is made (Article 59(3) of the Order).

	(iii)	The tribunal is also satisfied that from 3 August 2009, there was a series of deductions on a regular weekly basis up until 13 April 2015, when the claimant presented his claim to the tribunal.  In these circumstances, under Article 55(3), the claim cannot properly be considered as being out of time.  Furthermore, the tribunal is satisfied that the claimant did not consent, either orally or in writing, to any such deductions from wages.  Moreover, it is satisfied, in any event, under Article 45 of the Order, that any such consent must be in writing.

	(iv)	The claimant is therefore entitled to the award of £21,993.60 in respect of a series of unlawful/unauthorised deductions from wages.

8.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Employment Judge:

Date and place of hearing:  14-15 October 2015 and 2 November 2015, Belfast.

Date decision recorded in register and issued to parties: