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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Saavedra v Aceground Ltd (t/a Terrazza-Est) [1994] UKEAT 639_93_3011 (30 November 1994) URL: http://www.bailii.org/uk/cases/UKEAT/1994/639_93_3011.html Cite as: [1994] UKEAT 639_93_3011 |
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At the Tribunal
Judgment delivered on 20 December 1994
Before
THE HONOURABLE MR JUSTICE HOLLAND
MR K M HACK JP
MR R JACKSON
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellant MR N W COX
Free Representation Unit
49/51 Bedford Row
London
WC1R 4LR
For the Respondents MR E TAVERNA
(Director)
MR JUSTICE HOLLAND: This is an appeal by the applicant against part of a Decision of an Industrial Tribunal sitting in London (South) on the 10th May and 11th June 1993. The history that led to the making of the application unfortunately does not appear with clarity from the Reasons for the Decision of the Industrial Tribunal as promulgated on the 1st July 1993 and one of the continuing concerns of this Tribunal has been as to whether such Reasons were adequate to enable us to determine this Appeal. In the event, and with understandable encouragement from the parties, we are satisfied that the essential facts are not in controversy being substantially apparent from the available documentation, and are as follows:
1. 7th June 1988. The applicant commences employment at the Terazza Est Restaurant, Fleet Street, London EC4 as a wine waiter. This employment is maintained notwithstanding changes of ownership; as from October 1990 his employers are the Respondents.
2. 4th July 1988. A contract of employment in writing specifies his rate of pay as "£7.80 per session plus service"; the number of sessions is specified as 10 per 5 day week. At all material times, each customer's bill is subject to a 15% service charge and this levy funds a pool or "tronc" from which payments for "service" are made on a weekly basis. The distribution of "the tronc" was to all the service staff in proportions determined by management. The system adopted involved allocating to the weekly pool a number of 'points' and giving each member of staff an individual points entitlement. Thus, as at the end of December 1991 the
total allocation in terms of points was 120 with individual allocation as follows:
Manager 24 points
Assistant Manager 22 points
Head Waiter 20 points
Wine Waiter (applicant) 14 points
Senior Waiter 1 14 points
Senior Waiter 2 14 points
Waiter 12 points
Total 120 points
In the result the applicant received 14 x 120ths, that is 11.67% of the tronc.
3. December 1991. The manager was dismissed for redundancy. In the result the allocation of points to the tronc was reduced by his allocation, that is, by 24 points to 96. In the further result the applicant's own allocation was 14 x 96ths, that is 14.58% of the tronc.
4. 2nd February 1992. The Respondent's management being confronted by a falling turnover decided to allocate 110 points to the tronc with the further 14 points being allocated as to 2 points to the assistant manager (increasing his allotment to 24 points), and as to 12 points to the House, that is, to the management thereby to help pay a cook's wage. In the result the applicant's own allocation became 14 x 110ths, that is, 12.73%.
4. 16th February 1992. The allocation was varied again so that those previously allocated 14 points now had 15 points and the junior waiter's 12 points became 13. Inevitably the total increased pro tanto to 114 points. The applicant's allocation became 15 x 114ths, that is 13.16%.
This arrangement continued to the 26th June 1992 following which date the history becomes immaterial for present purposes.
Three further matters have importance. First, there is a finding by the Industrial Tribunal that these latter changes were communicated orally to the applicant along with the other service staff. Second, whether or not the applicant agreed to the variations (as to which there is no finding), there was on any view no agreement in writing. Third, but for the allotment to the House, the applicant would have received 14 x 98ths, that is,14.29% for weeks ending 2nd and 9th February 1992 and thereafter 15 x 102ths, 14.70%.
We now turn to the relevant provisions of Wages Act 1986:
"Section 1
(1): An employer shall not make any deduction from any wages of any worker employed by him unless the deduction satisfies one of the following conditions, namely
a. ...........;
b. the worker has previously signified in writing his agreement or consent to the making of it.
Section 5
(1): A worker may present a complaint to an industrial tribunal
a. that his employer has made a deduction from his wages in contravention of section 1(1) .....
Section 7
(1): In this part 'wages' in relation to a worker means sums payable to the worker by his employer in connection with his employment, including
(a) any ...... emolument referable to his employment, whether payable under his contract or otherwise .....
Section 8
(3): Where the total amount of any wages that are paid on any occasion by an employer to any worker on that occasion (after deductions) then, except in so far as the deficiency is attributable to an error of computation, the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion."
These provisions have been the subject of analysis in various reported decisions. For present purposes we do not think that any such decision serves to add to, or to vary the plain terms of the statutory provisions.
The Applicant's case was that from the 2nd February 1992 to the 26th June 1992 he suffered a deduction in wages without agreeing or consenting thereto in writing so that he had a complaint to present to the Industrial Tribunal. The deduction arose because that which he was paid from the tronc was less than that properly payable, the deficiency being reflected in the decline in the proportionate allocation.
The Respondent's case was that the allocation of the tronc was entirely a matter for management's discretion so that there was no normal expectation that an individual allocation would not reduce. True, there might be a normal expectation that the allocation would be fair and in the interests of the staff, but in February 1992 the relevant decisions had been so founded. Thus, there never had been a 'deduction' by agreement in writing.
The Industrial Tribunal did not deal explicitly with these issues but inferentially it accepted the Respondent's submissions so that apart from an award of £13 (the genesis of which cannot be readily discerned from the findings) the Applicant's case failed.
For our part, we find as follows:
1. We accept that the allocation of the tronc is a matter for the discretion of the Respondent's management so that the latter can give effect to a contract of employment that stipulates payment of "service". The latter can only be funded from a tronc accumulated and disbursed by management.
2. We find, however, that this exercise of discretion is limited to allocating to those who give service that which is paid for service. What is "properly payable" to the former whether under contract or otherwise (it matters not which for present purposes) is the latter.
3. We therefore find that the allocation of a proportion of the tronc to the management was outwith the bounds within which the Respondents could lawfully exercise discretion and resulted in a deduction from the Applicant's wages by reference to Section 1(1) and Section 8(3), that is, the difference between his allocation for the material period and that which he would have got but for the allocation to the `House'.
4. Given that, whether or not the Applicant agreed or consented to such deduction there was nothing "signified in writing", then it was unlawful so as to found a complaint to the Industrial Tribunal.
5. The appeal must therefore be allowed.
6. There is no good reason to remit the matter to the Industrial Tribunal. We can and do make a declaration that the complaint is well founded (see Section 5(4)) and we order the Respondents to pay the Applicant the amount of the deduction made during the material period.
7. As to the calculation of the payment:
a. the exercise of discretion that increased the individual allocations cannot be impugned as giving raise to any deduction;
b. accordingly the Applicant is entitled to:
Weeks ending 2nd and 9th February:
14 less 14 or 14.29% less 12.73%
98 110
i.e. an increase in his share of the tronc equivalent to 1.56% of the total for those weeks.
Remaining weeks:
15 less 15 or 14.70% less 13.16%
i.e. an increase in his share of the tronc equivalent to 1.54% of the total for that period.
From the resultant figure (readily calculable by the parties) there must be deducted £13.
In conclusion we would like to pay tribute to the representation; each side was clear and moderate, readily responding to guidance from the Tribunal.