Employment Law Cases
Work outside the contract and unauthorised deductions
Abellio East Midlands Ltd v Thomas
An employee could not make a claim for an unlawful deduction/underpayment of wages where he took up a more senior position but did not receive a contractual salary increase.
This case concerns what is called a ‘quantum meruit’ claim – which means ‘the amount he deserved’ or ‘as much as he deserved’. Such a claim is for a reasonable sum in respect of services supplied or work performed. Here the EAT considered this novel approach to recovering monies allegedly owed.
Mr Thomas, who was employed by Abellio as Area Manager for the Leicester Area, agreed to move to a new position as Area Manager for Nottingham and was told that he would receive an increased salary to reflect the greater responsibilities in that role. His salary was £42,000 pa and he was told that this would increase to £52,000 pa, subject to approval from HR. Mr Thomas took up the role in Nottingham but HR only authorised an increase to £48,000, saying it would increase to £52,000 once he had completed a probationary period. Mr Thomas was unhappy about this but continued in the role. When his employment was terminated, he brought an unlawful deduction from wages claim seeking the £52,000 salary he said he’d been promised. He also argued that he was entitled to a quantum meruit for the services he had provided.
The tribunal held that he was entitled to a remedy in unjust enrichment, a quantum meruit payment, for the work he did in the ‘entirely different’ position in Nottingham. It decided that he should have been paid an increased salary while in that position, and such a claim could be brought as an unlawful deduction from wages claim under Part II of the Employment Rights Act 1996 (ERA 1996). Abellio appealed.
The appeal was allowed.
In a highly technical judgment, the EAT held that a claim for a quantum meruit cannot be brought as an unlawful deduction of wages claim under Part II of the Employment Rights Act 1996. This is because the statutory definition of ‘wages’ does not include a payment for work done outside the scope of the contract of employment. Given that the work carried out by Mr Thomas was done outside the scope of his contract of employment he could not bring a claim in the employment tribunal for unlawful deduction of ‘wages’. However, the claim could and should have been brought in the civil courts, such as the county court.
Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2022/20.html
The case highlights the limits placed on what claims can be heard by an employment tribunal and is a lesson for claimants to think very carefully about the appropriate jurisdiction before issuing any claims related to their employment and in particular any claims related to unlawful deduction of wages. It also acts as a lesson to employers to agree terms and conditions with employees, particularly related to wages, before they start work or change roles.