Mr B Morris v Engineering Systems Design (Group) Limited And by way of respondent’s contract claim — 2025

Mr B Morris was recruited by Engineering Systems Design (Group) Limited through Flux Consulting in late 2023. His contract and handbook contained a clause allowing the company to recoup recruitment fees if he left within 12 months. The tribunal preferred Mr Morris's evidence that the amount he might have to repay was not explained to him before he signed. After he resigned on 13 March 2024 giving notice to 12 April 2024, Paul Guy told him on 28 March 2024 that his last day would be 28 March, and the company then issued a P45 showing 29 March 2024 as the leaving date.

The tribunal held that the March 2024 payslip did not comply with s.8 ERA 1996 because it did not itemise the recruitment-fee deduction, so the payment of nil against a net amount of £2,134.51 was an unnotified deduction. It also found that the agreed further sum of £249.13 for 3.5 days' pay up to 12 April 2024 had not been paid. Those sums, totalling £2,383.64, were ordered to be paid as unlawful deductions from wages. The tribunal also found that Mr Morris had been wrongfully dismissed when the respondent unilaterally brought his employment to an end on 29 March 2024 rather than the end of his notice period, although no separate monetary award was quantified for that point.

On the respondent's employer's contract claim for £4,500 recruitment fees, the tribunal held that the clause was not a penalty clause because it applied whenever the claimant left within 12 months, whether or not there was a breach. However, applying General Billposting, the respondent could not rely on the clause after it had itself breached the employment contract by ending the employment early and failing to pay wages due. The counterclaim was therefore dismissed. The tribunal noted that the respondent had reclaimed the VAT element of the recruitment invoice, but that did not alter the outcome.