Mr J Camacho v Hirst Magnetic Instruments Limited — 2022

Mr J Camacho brought a claim for unlawful deductions from wages against Hirst Magnetic Instruments Limited, arising from salary, car allowance and holiday pay claimed after the end of his employment. The tribunal recorded that the pension contribution element was not pursued. The hearing was before Employment Judge Youngs in Exeter on 14 October 2022, and the reserved judgment was sent on 16 November 2022.

The tribunal found that the Claimant had been employed from 5 July 2021 as Finance Director and interim Managing Director under an original contract and then a revised contract approved by the Board on 25 October 2021. It accepted that he worked at least 40 hours per week. It also found that the revised contract backdated the 40-hour arrangement to 5 July 2021, and that the Claimant was entitled to back pay for the additional hours worked. The parties agreed that unpaid basic pay for 31 January to 15 March 2022 totalled £14,280.

On the disputed deductions, the tribunal held that the car allowance was not contractually due because the contract provided for a company car through salary sacrifice or an equivalent scheme, not a car allowance. It also held that the payment of £23,896.60 to JC Business Solutions Ltd on 29 October 2021 was an overpayment of wages, or in any event an overpayment of pay under the contract, because no commission agreement had been reached and the payment related to work done by the Claimant as an employee. The tribunal calculated the overpayment of car allowance at £2,168.40, and combined with the commission payment the Respondent was entitled to deduct £26,065.

The tribunal accepted that seven days' accrued holiday remained outstanding on termination, but it calculated that entitlement on basic pay only, not car allowance, and assessed seven days' pay at £4,760. That brought the total wages properly payable for the relevant period to £19,040. Because the Respondent's lawful overpayments exceeded that figure, the deductions from February and March 2022 wages were permitted under s.14 ERA 1996 and the Claimant's unlawful deduction claim was dismissed.