Mr J Biddulph v Eastern Countries Leather (In Partnerships) — 2023

The tribunal considered claims for commission as unlawful deductions from wages, breach of contract in relation to notice pay and expenses, and holiday pay, together with the respondent’s counterclaim. It found that the employment contract envisaged commission being agreed after the websites were updated, and that a figure of 5% had been discussed between the claimant and Mr Burnett. However, no final agreement was ever reached on the amount of commission, how it would be calculated, or the sales to which it would apply. The tribunal accepted the respondent’s evidence that a workable commission scheme proved too difficult to implement and that the respondent instead increased the claimant’s salary from £30,000 to £35,000 and paid a £5,000 lump sum. On that basis, the commission claim failed because there was no agreed, declared, and quantifiable sum capable of amounting to wages from which a deduction had been made.

The tribunal found that the £10,000 paid to the claimant in December 2019 was a loan, relying in particular on the contemporaneous emails in which the claimant himself referred to it as a loan. It accepted that there were no agreed repayment terms and that the parties had contemplated that any future commission might be used to offset it, but no commission scheme was ever agreed and no repayments had been made by the time employment ended. The tribunal also found that the respondent had mistakenly paid the separate £5,000 sum in February 2021 as a bonus without deducting tax and national insurance, but held that the claimant was entitled to treat that payment as net, so the respondent’s counterclaim for £1,705 in tax and national insurance failed.

Relying on clause 7.6 of the contract, the tribunal held that the respondent was entitled to deduct sums owed by the claimant from salary or other payments due. It therefore dismissed the notice pay and expenses claims, finding that the respondent had credited the April salary, accrued holiday pay, and expenses against the outstanding £10,000 loan. After those deductions, the tribunal upheld the respondent’s counterclaim for the remaining balance of £7,766.47.

On holiday pay, the tribunal accepted that the claimant had accrued 9.5 days of untaken holiday in the 2022 holiday year and that only 6 days had been paid in the final salary payment. The respondent argued that 3 days need not be paid because the claimant had worked for his new employer during his notice period, but the tribunal accepted the claimant’s evidence that he had not worked for the new employer and had continued to perform his duties for the respondent during normal working hours. It therefore awarded 3.5 days’ holiday pay at a gross daily rate of £134.61, producing an award of £471.13.