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The Employment Appeal Tribunal (EAT) recently overturned a tribunal’s decision in the case of Deksne v Ambitions Ltd, offering key insights into how unlawful deductions from wages should be assessed.
The Claimant argued that the Respondent had made unlawful deductions from wages due to incorrect holiday pay calculations. While the Respondent admitted the errors, the Employment Tribunal originally ruled that the deductions were out of time because they did not form a “series” under the law, referencing the significant case of Bear Scotland v Fulton. Notably, there were gaps of over three months between some underpayments.
The EAT found the tribunal’s approach flawed. Whether deductions form a “series,” it emphasised, is a question of fact. The judgment outlined that tribunals must consider:
⦁ Similarities and differences between the deductions,
⦁ Their frequency and size,
⦁ The impact on the worker, and
⦁ The circumstances linking the deductions together.
⦁ The EAT clarified that gaps exceeding three months between payments do not necessarily break the series, overturning the tribunal’s reliance on that aspect.
The EAT ruled that all the Claimant’s underpayments—resulting from the same calculation error—were indeed part of a series. Consequently, they fell within the tribunal’s jurisdiction, considering the two-year backstop under s23(4A) Employment Rights Act and the EAT substituted a finding of unlawful deductions from wages.
This decision underscores that identifying a “series” of deductions requires a holistic view of the circumstances, rather than rigid reliance on intervals between payments. It also highlights the continued evolution of case law in this area. Employers will want to remain vigilant in assessing payroll practices and ensure compliance with statutory obligations to avoid disputes with employees.
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