Claims under s.13 ERA 1996 for sums properly payable but not paid, and what counts as wages. Delaney v Staples; Chief Constable of the Police Service of Northern Ireland v Agnew.
Contract; variation; unilateral pay cut. The employer unilaterally imposed a reduction in wage rates, wishing to go on employing the whole workforce. The employee continued to work and receive wages while reserving his rights and protesting about the reduced amount. The House of Lords (Lord Oliver giving the sole reasoned speech) treated the reduction as a repudiation that did not end the relationship: a fundamental breach other than a purported dismissal does not terminate the contract automatically and needs acceptance. The case confirms that an employee faced with a repudiatory pay cut need not resign but may remain in employment and sue for breach of contract. Lord Oliver reserved his opinion on an outright dismissal or walk-out. [Summary checked against a practitioner text, not the judgment.]
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References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.
Wages; 'properly payable' (s.13(3) ERA 1996) and 'under his contract or otherwise' (s.27(1)). The majority of the Court of Appeal held that a sum is wages properly payable only where the worker has some legal, although not necessarily contractual, entitlement to it; a reasonable expectation of a discretionary payment is not enough. A window-cleaning team's share of a job's 'workbill' price, which no term fixed and which was not objectively ascertainable, was not wages properly payable, so a 10% cut in workbill prices was not an unlawful deduction. Kent Management Services v Butterfield, on discretionary commission, is to that extent no longer reliable. [Summary checked against a practitioner text, not the judgment.]
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References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.
Contract; discretionary bonus; irrationality/perversity standard. The High Court (Burton J) preferred the test of whether the employer had acted irrationally or perversely in exercising its discretion: the court can interfere only if no reasonable employer could have exercised the discretion in that way. A senior equities trader, on garden leave under notice, received no annual bonus despite having created a lot of profit in the previous year. The court read 'individual performance' as simply meaning performance of his contract. The employer had taken into account factors unrelated to that, including that he had been dismissed and no longer needed incentives to work: this was a perverse and irrational exercise of the discretion and a breach of contract. [Summary checked against a practitioner text, not the judgment.]
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References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.
Unlawful deduction from wages; discretionary bonus; wages properly payable. Once an employer announces a bonus on stated terms and the employee acquires a legal entitlement to it, the bonus becomes 'wages properly payable' under s.13(3) ERA 1996. The employer cannot avoid liability by characterising the bonus as ad hoc or discretionary after the entitlement has arisen. [Summary checked against a practitioner text, not the judgment.]
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References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.
Contract; discretionary bonus; Wednesbury standard; UCTA s.3. The Clark v Nomura irrationality standard governs bonus discretion, but the burden on the employee is very high — he must show that no rational bank in the City would have paid so little, and the court will not substitute its own view of his worth. UCTA 1977 s.3 gave no assistance: an employee deals with his employer neither as a consumer nor on the employer's 'written standard terms of business' in respect of remuneration for his services.
Cites
References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.
Holiday pay; unlawful deductions; series of deductions. A 'series' of deductions is not automatically broken by a gap of three months or more between underpayments, nor by an intervening lawful payment: whether deductions form a series is a question of fact, and underpayments linked by a common fault — here the systematic calculation of holiday pay at basic pay rather than normal pay — can constitute a series despite such gaps. Disapproves the three-month-gap rule derived from Bear Scotland v Fulton.
Cites
References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.
Unlawful deduction from wages; discretionary bonus; crystallisation. Once the designated approver (the Sector Lead) exercised the disclosed discretion to award the full 1% kitty bonus in accordance with the terms announced to staff, the claimant's entitlement crystallised. The employer could not then move the goalposts by introducing a further approval layer or a cap that had never formed part of the scheme as communicated. EAT substituted a finding of unlawful deduction.
“For those reasons, I substitute a finding that the Claimant was entitled to 1% of the JLP year one revenue less the sterling equivalent of $150,000 that was paid to him.”Bruce Carr KC, at [49]
Cites
References found in the judgments’ text, with the number of paragraphs in which each case is mentioned. Not a classification: how a case was treated is recorded under Later history.