'Unlawful wages deduction' claim fails
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R A Davies v Fanwood Transport & Shipping
• A CARDIFF industrial tribunal has rejected claims by lorry driver R A Davies that he was wrongfully dismissed by Fairwood Transport & Shipping, and that the company made an unlawful deduction from his wages.
The tribunal said that Davies had been employed by the company between August and October 1988, having previously worked for them on a self-employed basis. Davies was told by a director of the company that they were not getting on and that he proposed to employ someone else to drive Davies's vehicle. Davies was not given the opportunity to work his notice and he received no payment in lieu or any payment in respect of holiday pay accrued during the two to three months of his employment.
The tribunal had no jurisdiction over Davies's dismissal, as he had been employed only for a few months and not for the requisite two years. His claim of unlawful deductions, contrary to the Wages Act, faced the still unresolved difficulty of whether payment in lieu fell within the general definition of "wages" in Section 7(1).
However, said the Tribunal, there was another deeper difficulty, since the company claimed, on the basis of a principle that might be entirely mistaken, to have withheld the whole of each payment. That could not be regarded as a "deduction", even with the benefit of Section 8(3) of the Act, which provided that an underpayment should be taken to be due to a deduction unless if was due to 'an error of computation". Sub-section (4) defined that phrase as meaning an error of any description affecting the computation of the gross amount of wages.
An erroneous assumption that notice money and holiday pay were not due would lead to a computation of the gross wages as nil. That matter was therefore taken out of the scope of the Wages Act, which was concerned only with deductions. Section 8(3) raised a presumption that underpayments, which might well include non-payments, were due to deductions, but were excluded if the underpayment or non-payment was caused by a mistake of any kind affecting the computation of the top line.
Now either the company was right or wrong, said the tribunal. If it was right, Davies's application must fail. If it was wrong, it was a mistake of some kind affecting the computation of the gross amount. Consequently, it was a case for the county court.