Unlawful Deduction – Employee Wins Bonus Claim
In the case of Mr M Kidd v Univar Europe Ltd, the claimant was successful in his claim that his employer had made an unlawful deduction from his pay of £559.76.
The Facts in Mr M Kidd v Univar Europe Ltd
Mr Kidd, the claimant, started working with Univar Europe Ltd, the respondent, on 23 July 2018 as an MDM EMEA Data Steward. The claimant alleged that during his employment:
- That the employer had made an unlawful deduction from his wages; and
- That he was entitled to a performance-related bonus payment.
The claimant was entitled to a discretionary bonus payment which the bonus scheme stated will be paid in March 2022. This is provided the employee is still employed by the company and not have submitted their resignation. On 25 March 2022, a bonus payment of £559.76 was made to the claimant in relation to his previous year’s performance. Soon after, the claimant resigned from the company on 28 March 2022.
However, the respondent deducted his bonus payment from the claimant’s final wage on 25 April 2022. The claimant lodged a claim with the Employment Tribunal on 14 June 2022. This was after completing a period of Early Conciliation between 7 and 19 May 2022.
Employment Tribunal Declares Unauthorised Deduction
The Tribunal was in favour of the claimant. They examined the words ‘will be paid in March’ set out in the employer’s Bonus Scheme Rules 2021. According to the Tribunal, that was how it was in the claimant’s case. The Tribunal also compared it with the third bullet point, which was referred to ‘as at March 2022’.
The tribunal concluded that the omission of a specific date such as ‘as at 31 March 2022’ resulted in ambiguity. Therefore, given the ambiguity of the rule, this should be applied against the party relying upon it— the respondent. This is also known as the contra preferentum rule
They also analysed the implied terms of the Bonus Scheme Rules. The terms say the employee should not have resigned by the time the bonus was paid. This was in favour of the claimant as he had not submitted his resignation during this time. Hence, he was eligible for the bonus.
Since it had been paid, the deduction from his April salary was considered unauthorised under S.13 of the Employment Rights Act 1996. This section gives workers the right not to have deductions taken from their wages unless it is authorised by, amongst other things, a term in their contract.
Hence, the findings of the tribunal state that the respondent made an unauthorised deduction from the claimant’s wages on 25 April 2022 of £559.76. The Tribunal orders the respondent to pay the same amount to the claimant.
Our Take on Ambiguous Terms
Steve Norton, a lawyer at Redmans, comments “This is a useful reminder to employers that lazy use of ambiguous wording in their employment policies can come back to bite them, particularly when subjected to scrutiny under legal rules of interpretation”
The decision of the Employment Tribunal in Mr M Kidd v Univar Europe Ltd -1802914/2022 can be found here