It is normally part of the employment bargain that if in performing their role an employee is put to extra expense then the employer will repay the worker that extra expense. That is often a written term of the employment contract but even if not is an implied term.
A recent (and uncontroversial) decision of the Employment Tribunal casts light on the relative lack of options available to them when an employer fails to make good on their obligations. In Woodcock v DVSA (2024) the claimant was a Driving Examiner and was often required to work at locations away from his local area. When he did so he would incur extra expenses for subsistence (lunch, etc) – there was an employer policy that provided for this to be paid. The claimant made a claim for £77.55 which the employer refused to pay – the issue was how a specific term of the policy should be interpreted.
At an impasse after a grievance was unsuccessful, the claimant initiated an employment tribunal claim alleging that the DVSA’S non-payment was an unauthorised deduction of wages which is a claim that an employment tribunal has jurisdiction to hear under sections 13 and 23 of the Employment Rights Act 1996. Despite the name this cause of action is not limited just to “deductions” in the sense that a worker can challenge monies removed from their pay but deductions is given a broad meaning of monies that an employer should have paid but was not. Therefore, where an employer pays less that they should in wages that are properly payable that is “a deduction” and can be challenged at an employment tribunal (Delaney v Staples [1991] IRLR 112, CA).
A claim for an unauthorised deduction of wages is the main basis upon which a worker and challenge the non-payment of money that they are owed by an employer so it is not surprising that the claimant in Woodcock v DVSA seized this option to challenge his employer’s non-payment of the £77.55 (he said) the employer owed (in fact, during the proceedings the employer handed this over to the claimant and the case was then just about a declaration that the employer had breached the worker’s right not to have unauthorised deductions).
But, at the final hearing the claimant ran into a difficulty. The Tribunal suggested that it did not have jurisdiction to even decide the issue. What does that mean? The key is that an employment tribunal is not a court (which has a general jurisdiction to determine issues of law) but the employment tribunal’s power is limited to those areas that Parliament had determined it could determine – if a matter went outside that jurisdiction then the tribunal simply does not have the legal authority to consider the case, except to the extent that it is necessary to determine whether the tribunal has the authority to do so.
The most common example of this are the requirement that an employee must have been employed for two years before it can decide whether the employee was unfairly dismissed under section 94 of the Employment Rights Act 1996. Once the tribunal has determined an employee was not employed for two years that is the end of the case, and the case will be dismissed because the tribunal does not have jurisdiction to consider the case.
The obstacle the claimant encountered in Woodcock v DVSA is that the legislation on which the case was based had a very precise definition of what were “wages” at section 27 of the Employment Rights Act 1996 that it is “any sums payable to the worker in connection with his employment” including those types of payment later set out in section 27(1). However, section 27(2) sets out some types of payments which even though they may be owed to a worker by an employer are not “wages”. The crucial exception is section 27(2)(b): “(b) any payment in respect of expenses incurred by the worker in carrying out his employment …”. As the Tribunal in the case observed: “This means that any payment in respect of expenses is excluded from the unlawful deduction from wages provisions. If the claimant’s claim for day subsistence payments amounts to expenses, then this tribunal will not have jurisdiction to hear this claim.”
And that is precisely what the Tribunal decided, the £77.55 the claimant alleged was not paid was for the payment of expenses related to employment. It did not matter that this may have been payments the employer was lawfully required to make under the employment contract it was not a payment the employment tribunal could consider and, therefore, the case was dismissed without any determination (because the tribunal did not have jurisdiction to make the decision) whether DVSA did in fact ever owe him £77.55 and whether this was improperly withheld.
Comments
There is nothing surprising about the decision and, legally, I think this is correct. The employment tribunal has the jurisdiction to decide whether an employer has made an unauthorised deduction of wages but, because the legislation says expenses are not wages, then this it cannot determine this issue. In fact, except for one main exception, a worker who thinks their employer is not paying contractually required expense claims does not have the ability to make a legitimate claim in the tribunal about this non-payment!
There are I think two helpful lessons to be learned from this scenario.
First, it is easy to fall into the trap that any non-payment of money owed by an employer to a worker can be challenged as an unauthorised deduction of wages claim (along with unfair dismissal probably among the most popular of claims). This is simply (unfortunately) not true. It is only the non-payment of “wages” that can be challenged and, as Mr Woodcock discovered here, the UK Parliament introduced a myriad of “small print” conditions that excluded some payments from the definition of wages. An essential step before contemplating any employment tribunal challenge is to consider whether what a worker is looking to challenge really are “wages” according to the restrictive definitions in section 27 of the Employment Rights Act 1996. If not, then the claim will almost certainly fail – whether or not the employer does owe the money.
Second, the main exception to an unauthorised deduction of wages claim is what is a different claim that the non-payment is a claim for damages arising from a breach of contract. A breach of contract claim is normally a claim that can be made in court rather than tribunal proceedings (for example, in the County Court Small Claims Track). That is the option that Mr Woodcock probably should have pursued while he was still employed. An Employment Tribunal does not have the jurisdiction to decide whether the non-payment of monies to an worker is a breach of contract except if the employee is no longer in employment and the claim is made within three months of their last day of employment (Article 3 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994). Unless that situation applies there is not really a remedy available to a worker (unless, possibly, there are associated discrimination aspects).
Speaking personally, that exclusion of employment contract disputes of currently employed claimants from the employment tribunal is an unhelpfully labyrinthine situation and it would be much more sensible for the ET to have jurisdiction to decide breach of contract cases during employment, but our elected representatives have chosen to keep things complicated.
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