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Unlawful Deductions from Wages: Employee Entitled to be Compensated for Unpaid On-Call Time Over his 15 Year Term of Employment

The Court of Appeal decision in Bath Hill Court (Bournemouth) Management Co Ltd v Coletta entitled the employee to £100,252.42, representing unpaid National Minimum Wage (NMW) for the time he spent “on-call” at night, in his flat, where he was permitted to sleep.

Notably, this case commenced prior to 1 July 2015 when the 2 year backstop period was imposed on unlawful deductions claims as a result of the Deductions from Wages (Limitation) Regulations 2014. In order to settle the minds of those who saw the figure in the paragraph above and panicked, if the same case were brought now, the employment tribunal would only be able to look back two years from the date of complaint in considering cases of this nature.

In Bath Hill Court the employee was a live-in porter in a block of flats managed by the Defendant. He was employed from February 2000 until his dismissal in August 2015. The employee brought proceedings in the Employment Tribunal in November 2014 on the basis that Bath Hill Court paid him less than the National Minimum Wage as he should have been paid whilst he was “on-call” at night, when he was in his flat and permitted to sleep. The Employment Tribunal treated this as a claim for unlawful deductions from wages contrary to Part II of the Employment Rights Act 1996. In September 2015, the Tribunal found in favour of the employee and this decision was upheld on appeal to the Employment Appeal Tribunal (EAT).

At a remedy hearing (concerning only quantum) in December 2016, the employee was awarded £44,603 in arrears dating back six years prior to the commencement of the proceedings. A six year cap on arrears was enforced on the basis that the Limitation Act 1980 applied to the claim and the employee appealed to the EAT refuting the relevance of the 1980 Act. The employee argued that he was entitled to arrears for the whole period of his employment and the EAT agreed with him. Accordingly in March 2018, he was awarded the sum of £100,252.42. The employer appealed the decision to the Court of Appeal.

Ultimately, the Court of Appeal determined that the Limitation Act 1980, on which the employer’s argument relied on, was not relevant. By virtue of section 39 of the Act, the “Act shall not apply to any action or arbitration for which a period of limitation is prescribed by or under any other enactment.” The Court were satisfied that a ‘period of limitation’ had already been prescribed by the Employment Rights Act 1996 (sections 23(2) to (4)) which provide that a claim for unlawful deductions from wages must be brought within three months of the date of the payment from which the deduction was made, or within three months of the last deduction in matters where a series of deductions were concerned.

The employer’s appeal was dismissed and the Claimant was entitled to the full £100,252.42.

The principles set out by the Court of Appeal in Bath Hill Court are still applicable for claims commenced prior to 1 July 2015. It is clear that prior to the enforcement of the Deductions from Wages (Limitation) Regulations 2014, the position on claims regarding historical unlawful deductions was very uncertain.

This bulletin is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice.

JMW Solicitors is a Limited Liability Partnership.

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