Reduction in pay unlawful

Davies & others v M J Wyatt (Decorators)`, IDS Brief 670, EAT

Davies was originally classed as self-employed by MJW and received no paid holidays, but this changed when he became an employee. MJW funded the paid holidays by setting up a "holiday scheme" whereby it deducted £20 a week from employees’ wages and, in turn, paid them £40 a day for 15 days’ holiday and eight public holidays.

In October 1998, the Working Time Regulations introduced the right to paid annual leave of 15 days. To fund this, MJW unilaterally reduced the hourly rate of pay by 30p in return for four weeks’ paid holidays. The subsequent claim for unauthorised deduction of wages was unsuccessful. The tribunal held that the reduced hourly rate was the sum "properly payable" to the men and the regulations effectively meant MJW was paying twice for holidays; firstly through its holiday scheme and secondly by giving paid annual leave.

The EAT held that the tribunal had erred in law. MJW could not unilaterally reduce pay without consent to fund its obligation to provide paid annual leave and ordered MJW to repay the deductions. Had both parties consented to a variation of the contract, the situation would have been different.

Ledeatte v London Borough of Tower Hamlets, IRLB 649, EAT

In 1994, Ledeatte brought a race discrimination claim against the authority. In 1997 she brought a complaint of victimisation and relied on three incidents carried out by different individuals in the personnel department: she had been wrongly informed she could not carry forward holiday, she had returned from maternity leave to a different position, and no salary was paid while on sick leave.

The tribunal held that any one of the incidents could constitute victimisation but dismissed the claim because there was no evidence that any of the individuals knew of Ledeatte’s earlier race claim, the "protected act".

Ledeatte appealed, arguing that as the personnel manager was aware of the race claim, it could be inferred that the three individuals also knew of it and there was no need to prove they had actual knowledge.

The EAT accepted the authority’s submission that the perpetrators of the three acts complained of had to have actual knowledge of the protected act – the race claim – to establish the necessary causal link.