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What is a valid claim for unlawful deduction from wages?

Posted on 16th February 2009
HR practice

This case looked at provisions relating to the right not to suffer unlawful deductions from "wages".

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the flying allowances were contingent entitlements and had not become payable

Lucy and others v British Airways


Mrs Lucy was one of 78 claimants employed by BA as cabin crew flying out of Manchester. In addition to their basic salary they were entitled to be paid flying allowances which included meal allowances, overnight and long-day payments. These allowances only became payable when cabin crew carried out flying duties.

In October 2006 BA changed the flying arrangements from Manchester. The claimants were not dismissed for redundancy but were not rostered to fly and as a consequence they were not paid any flying allowances. The claimants brought claims in the employment tribunal claiming this non-payment amounted to unlawful deductions from wages. The employment tribunal found in favour of BA, deciding that the claims failed because they could not be "validly quantified" (as required by the Court of Appeal's decision in Coors Brewers Ltd V S P Adcock [2007])

The EAT's decision

The EAT upheld the employment tribunal's decision but for different reasons. The EAT explained that the claims had to fail because the flying allowances had not become payable. They were contingent entitlements payable only if and when a claimant flew. Therefore the claims failed because they did not relate to unpaid "wages".

The EAT emphasised the difference between basic salary, which is payable to an employee when he or she is ready, willing and able to work and pay which is only earned and becomes payable when specific tasks are completed or specific events take place.

In practice

The claimants' only possible remedy now is a breach of contract claim for the loss of opportunity to earn flying allowances when they were not rostered to fly. To be successful the claimants will have to show a breach of contract by BA and that the losses flow from that breach. If the claimants are still employed by BA, the claims must be brought in the County Court. This is because breach of contract claims can only be brought in the employment tribunal after termination of employment and then each claim is subject to a maximum value of £25,000.

Although this case found in favour of the employer, over the years we have seen numerous unlawful deductions from wages claims that have caught the employer out. This area of law is technical and there are significant traps to avoid. The best way of minimising the risk is to make sure you have an appropriate clause in your contracts of employment permitting deductions and, in appropriate cases, take advice before making any deduction or non-payment to check that you can actually do what you want! This case also illustrates the inconvenience of having employment related breach of contract claims split between the tribunals and county courts. It would be more practical if the tribunal had full jurisdiction to hear both; saving confusion, time and expense. But that would be too sensible for government to adopt!

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