Miss J Byrne v Alderley Day Nursery Limited — 2021

The claimant brought an unlawful deduction from wages claim arising from the respondent's handling of furlough pay after she had left employment on 13 March 2020. On 3 April 2020 the respondent agreed to make a furlough claim for her under the Coronavirus Job Retention Scheme and sent a letter stating that she would remain employed during the furlough period and that her usual contractual terms would apply except as varied.

The parties then exchanged emails in April 2020 about whether the respondent should pay the full furlough sum immediately or hold part of it pending clarification of eligibility and any possible HMRC repayment. The tribunal recorded that the respondent said the claimant had received a total of £1,085 via the scheme, that her entitlement in April 2020 was £1,063.01, and that this meant there was an alleged overpayment of £21.99. The claimant said she had agreed to 50% being held, but not for as long as six to 12 months.

The tribunal first considered employee and worker status and initially thought the claimant was not an employee or worker. It then held, however, that the April 2020 furlough arrangement amounted in effect to a rehire, so the claimant was an employee for the relevant period. The tribunal nevertheless found that she had agreed in writing to 50% of the furlough payment being retained pending clarification, and that this amounted to a contractual variation.

Because of that agreement, the withheld 50% was not properly payable at the date of the claim and there was a valid written agreement for the purposes of section 13 ERA 1996. The tribunal therefore dismissed the unlawful deduction claim. It noted that any issue about the outstanding 50% after the respondent had returned sums to HMRC would have to be pursued in another jurisdiction.