Coletta v. Bath Hill Court (Bournemouth) Property Management Ltd (NATIONAL MINIMUM WAGE - Unlawful Deduction), Court of Appeal - United Kingdom Employment Appeal Tribunal, March 29, 2018, [2018] UKEAT 0200_17_2903

Resolution Date:March 29, 2018
Issuing Organization:United Kingdom Employment Appeal Tribunal
Actores:Coletta v. Bath Hill Court (Bournemouth) Property Management Ltd (NATIONAL MINIMUM WAGE - Unlawful Deduction)

Copyright 2018

Appeal No. UKEAT/02/17/RN



At the Tribunal

On 19 January 2018

Judgment handed down on 29 March 2018







Transcript of Proceedings








National minimum wage - unauthorised deduction from wages - section 23 Employment Rights Act 1996 - sections 9 and 39 Limitation Act 1980

The Claimant had successfully claimed that the Respondent had failed to pay him at national minimum wage rates and, at the subsequent Remedies Hearing before the ET, sought to recover payment for the sums that should have been paid, going back to the introduction of the National Minimum Wage Act, a period of some 15 years. The Respondent resisted that claim, contending that section 9 Limitation Act 1980 meant the Claimant could only recover sums going back six years. The ET agreed with the Respondent, holding that the three-month time limit for bringing an unauthorised deductions claim was concerned only with the question of the ET's jurisdiction to determine the claim and did not amount to a period of limitation for the purposes of section 39 Limitation Act such as to disapply section 9. The Claimant appealed.

Held: allowing the appeal

Where a claim was brought under a statute that prescribed a period of limitation, section 39 Limitation Act 1980 provided that the limitations that would otherwise apply pursuant to that Act (including the six-year limitation under section 9 of the Limitation Act) would not do so. Claims for unauthorised deductions were subject to a period of limitation by virtue of subsections 23(2) and (3) Employment Rights Act 1996. The ET had been wrong to hold that this was not a period of limitation for the purposes of section 39 Limitation Act: section 39 drew no distinction between periods of limitation for jurisdictional or remedy purposes. The Claimant had brought his claim in respect of the series of deductions made from his pay within three months of the last of the deductions in the series, as prescribed by subsection 23(3) and was thus entitled to recover the sums that had been deducted from the wages properly payable to him, as provided by the National Minimum Wage Act, without the imposition of a back-stop of six years.


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1. This appeal gives rise to a discrete question relating to the jurisdiction of the Employment Tribunal (``ET'') to award compensation in respect of a series of deductions from wages. Specifically, does section 9 Limitation Act 1980 (``LA'') apply to a claim in respect of an unauthorised deduction of wages, so as to apply a six-year limitation to the recovery of compensation, or does section 23 Employment Rights Act 1996 (``ERA'') prescribe an alternative period of limitation for the purposes of section 39 LA?

2. In this Judgment I refer to the parties as the Claimant and Respondent, as below. This is the Full Hearing of the Claimant's appeal from a Remedy Judgment of the Southampton ET (Employment Judge Salter, sitting with members Mr Cross and Mr Stewart, on 11 November 2016), by which it was held that that, pursuant to section 9 LA, the sums due to the Claimant by way of arrears of pay were limited to six years.

The Relevant Factual Background and the ET's Decision and Reasoning

3. The Respondent is the management company for a substantial block of apartments in Bournemouth, in which capacity it employs a team of porters. In 2000, the Claimant took up employment with the Respondent as a porter, becoming Head Porter in or about 2007. In 2014, the Claimant commenced ET proceedings against the Respondent, claiming he had been underpaid by reference to the national minimum wage. That claim was upheld by the ET in its Judgment promulgated 9 September 2015 (subsequently upheld by the EAT) and, on 11 November 2016, the ET reconvened to determine remedy, ultimately awarding the Claimant £44,603.05, that being the amount of the underpayment for six years prior to the commencement of proceedings.

4. In reaching its decision on remedy, the ET concluded that section 9 LA provided a long-stop date for any award in respect of unauthorised deductions; section 23 ERA did not itself provide another limitation period for such a claim - that was focussed on a different issue, namely whether the ET had jurisdiction to hear the claim at all; a claim outside the ET's jurisdiction could, subject to any rules of res judicata or abuse of process, be litigated in the civil courts and would be limited to six years; section 39 LA did not, therefore, apply and the applicable time limit was six years, as provided by section 9.

Statutory Employment Protections - The Relevant Legal Framework

5. The Claimant's claim was made in reliance on the provisions of the National Minimum Wage Act 1998 (``NMWA''), which, by section 1(1) provides that:

``(1) A person who qualifies for the national minimum wage shall be remunerated by his employer in respect of his work in any pay reference period at a rate which is not less than the national minimum wage.''

6. By section 17(1) NMWA, it is then provided:

``(1) If a worker who qualifies for the national minimum wage is remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage, the worker shall at any time (``the time of determination'') be taken to be entitled under his contract to be paid, as additional remuneration in respect of that period, whichever is the higher of -

(a) the amount described in subsection (2) below, and

(b) the amount described in subsection (4) below.''

7. The actual statutory formula (provided in subsections 17(2) and (4) NMWA) is not relevant for present purposes, but the effect of section 17(1) is to provide the worker with a contractual entitlement to be paid at the relevant rate. A failure to pay the national minimum wage to a worker in respect of any pay reference period is thus to be treated as an unauthorised deduction from wages under Part II ERA - it being a payment of wages less than that which is ``properly payable'' (see section 13(3) ERA). Section 13 ERA relevantly provides:

``13. Right not to suffer unauthorised deductions

(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 section ``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.


8. A worker does not, however, have to show a contractual entitlement to a payment in order to pursue a complaint that the failure to pay comprises an unauthorised deduction from wages; section 27(1)(a) ERA defines ``wages'' more broadly, as follows:

``(1) In this Part ``wages'', in relation to a worker, means any sums payable to the worker in connection with his employment, including -

(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,


And see New Century Cleaning Co Ltd v Church [2000] IRLR 27 CA.

9. By section 23(1)(a) ERA it is provided that:

``(1) A worker may present a complaint to an employment tribunal -

(a) that his employer has made a deduction from his wages in contravention of section 13 (including a deduction made in contravention of that section as it applies by virtue of section 18(2)),


10. By section 205(2) ERA, it is further provided that the remedy for a worker in respect of any breach of section 13 is by way of complaint to an ET and not otherwise. That said, a party to a contract of employment will still be entitled to pursue a common law claim for sums due under that contract in the civil courts (or, if the claim in question arises or is outstanding on the termination of the employment, in the ET pursuant to the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 (``the 1994 Order'')), see Rickard v P B Glass Supplies Ltd [1990] ICR 150 CA.

11. For complaints of unauthorised deductions in the ET, the period within which such a claim must be presented is provided by subsections 23(2)-(4) ERA:

``(2) Subject to subsection (4), an employment tribunal shall not consider a complaint under this...

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