Mrs F Stone v The Finance Store Limited and 1 other — 2019

The Tribunal accepted that, under the Statement of Main Terms of Employment and the later agreed position in December 2016, the Claimant was entitled to be paid £39,000 gross per year, or £3,250 gross per month. From January 2017 the First Respondent paid £500 gross per month instead. The issue was whether that reduction had become binding by agreement, or whether it remained an unauthorised deduction from wages under section 13 of the Employment Rights Act 1996.

The Tribunal found that there was no binding variation. The proposed reduction to £500 per month formed part of a wider, subject-to-contract package dealing with the Claimant's shareholding, the bridging loan and related documentation. Although there were discussions and draft documents, the new employment contract was never finalised or signed. The Tribunal found that the salary reduction was an advance step in anticipation of a broader deal, not a standalone contractual variation.

The Tribunal rejected the Respondents' case that the Claimant had accepted the lower payment by conduct. It held that her silence and receipt of the reduced payments were reasonably capable of a different explanation, namely that she was waiting for the wider share-sale arrangements to be completed. The Tribunal also found that Mr Stone's email of 27 April 2017 was a protest about his consultancy payments, not a complaint on the Claimant's behalf about her salary reduction.

On that basis, the claim succeeded. The Tribunal held that the total amount of the unauthorised deduction at the date the proceedings were issued was £60,500 gross.