Mr C Marshall v Peter Vardy Limited — 2021

The tribunal found that Mr C Marshall's base salary was wages within section 13 of the Employment Rights Act 1996 and that Peter Vardy Ltd reduced those wages by 10% for several months after he returned from furlough on 15 June 2020. The reduction continued until the end of his employment in April 2021, and the tribunal accepted the Respondent's quantification of the shortfall at £2,563.86 gross, equivalent to a monthly shortfall of £270.83.

The Respondent argued that the June 2020 letter was an offer of new terms which the Claimant accepted by returning to work, and alternatively that he accepted the reduced pay by continuing to work. The tribunal rejected both arguments. It found that the letter was understood by the Claimant as an instruction to return rather than a free-standing offer, that he did not consider he had a choice, and that the wording of the letter indicated the Respondent appreciated written agreement was required. It also accepted the Claimant's evidence that he complained almost weekly to his line manager and raised the issue in writing when seeking a hardship loan, so he had made clear that he did not accept the change.

The Respondent further contended that bonus payments could be set against the salary shortfall because the Claimant's total earnings exceeded his base pay. The tribunal rejected that submission. It held that the bonus payments were payable under the contract of employment and were wages for the purposes of section 27 ERA 1996, because the Respondent had fixed the rules of each bonus scheme and was obliged to pay in accordance with those arrangements until varied. On that basis, the bonus payments did not offset the obligation to pay the full base salary, and there were no gaps in the series of deductions such as would defeat the claim.