P McMahon Mr Iain Merrick Kerr v - Solicitor Energy Vault SA — 2023

The claimant, Mr Iain Merrick Kerr, worked as the respondent’s Chief Commercial Officer from March 2018 until November 2021. He alleged that his salary had been reduced in March/April 2020 on the basis that the shortfall would later be repaid when funding was received, and that the respondent’s failure to repay the reduced sums, together with the calculation of his payment in lieu of annual leave at termination, amounted to an unlawful deduction from wages under section 13 of the Employment Rights Act 1996.

The tribunal found that there was an agreed oral variation in March 2020 under which the claimant’s salary was reduced by 50%, later increased to £200,000 in December 2020. It accepted Mr Piconi’s evidence that he told the claimant the reductions were expected to be temporary, that salaries were expected to return to normal when the CDU or other funding was secured, and that discretionary bonuses might partially or fully offset the reductions. It rejected the claimant’s case that Mr Piconi gave a commitment that the claimant’s salary would be reinstated to its March 2020 level and that all sums lost would be repaid once funding was received. The tribunal relied in particular on the surrounding emails, the absence of any written reference to a repayment commitment, and its finding that the claimant read the full 8 April 2020 email chain, including the talking points.

Applying the civil standard of proof on the balance of probabilities, and the section 13 ERA framework on whether the claimant had received less than the wages properly payable, the tribunal held that the reduced salary was the amount properly payable under the varied contract. It therefore found that there had been no deduction from wages in respect of salary, and for the same reason the payment in lieu of untaken annual leave was not less than properly payable. The tribunal also noted that, even if section 13(1) had been engaged, the oral variation later confirmed in writing on 8 April 2020 would have authorised the reduction. The claim was dismissed in full and no remedy was awarded.