Hannah Snape v Tooth Fairies Limited — 2022

Hannah Snape brought claims for notice pay and for an alleged unauthorised deduction from wages against Tooth Fairies Limited. At the hearing she confirmed that she did not wish to pursue the notice pay claim, so that aspect of the case was dismissed upon withdrawal. The only live issue was whether the respondent had unlawfully deducted £1,231.77 from her wages in relation to training costs.

The tribunal found that the claimant had signed a written contract dated 5 January 2021 containing paragraph 7(d), which required repayment of training costs by deduction from final salary or by later repayment if necessary. The claimant had undertaken a Level 4 IQA qualification funded by the respondent at a cost of £2,999, resigned on 12 August 2021, and was told that repayment would be sought. The tribunal accepted that the claimant knew the repayment would be in the thousands and that the deduction would attach to her final pay on 1 September 2021. It also accepted the respondent's evidence that the £349.83 paid on 1 October 2021 related to statutory sick pay and a tax refund, not additional wages.

Applying section 13 ERA 1996 and the authorities cited, including Cleeve Link Ltd v Bryla, Dunlop, Makdessi, Yorkshire Maintenance Company Ltd v Farr and Strathclyde Regional Council v Neil, the tribunal held that paragraph 7(d) was not a penalty clause. It found that the £2,999 training cost was not unreasonable in light of the time and resources the respondent had spent supporting the claimant's qualification, and that the respondent had a legitimate commercial interest in recovering those costs. The deduction of £1,231.77 was therefore authorised by the written contract and the claim for unlawful deduction of wages was dismissed.