Claimant v Sparta Global Ltd — 2020

The claimant brought a section 13 ERA 1996 complaint seeking a declaration that the respondent had unlawfully deducted £2,203.20 from his wages and repayment of that sum. The respondent admitted the deductions but said the amount had already been repaid on a no liability basis. The claimant also argued that the contractual clawback provisions relied on by the respondent were an unlawful restraint of trade and/or a penalty clause.

The tribunal found that the claimant had entered into a training contract under which he could be liable to repay up to £22,000 if he left within 24 months, with staged repayment percentages depending on length of service. It recorded that the respondent had not provided disclosure or evidence showing how the asserted training cost of £22,000 had been incurred, despite requests and directions to do so. The claimant resigned in June 2019, and the respondent then deducted £2,203.20 from his June and July pay.

Applying the authorities it cited on penalty clauses, including Dunlop and Makdessi, the tribunal held that the clawback provisions were a penalty and that the detriment imposed on the claimant was out of all proportion to any legitimate interest of the respondent. It found there was no proper correlation between the stated training cost and any cost borne by the respondent, noted the disparity in bargaining power, and drew an inference from the respondent's failure to provide the material requested. The tribunal therefore declared the deductions unlawful under section 13 ERA 1996 and said it was unnecessary to decide the restraint of trade argument.

Although the complaint succeeded, no award was made because the respondent had already repaid the deducted sum. The judgment therefore records declaratory relief only, with no further monetary award.