A law firm was not entitled to make deductions from the pay of a consultant solicitor because it was unhappy with the quality of his work, an employment tribunal has ruled.
Judge Elliott in London said: “If a worker or employee performs below standard, the employer has options it can take. This is either to performance manage the worker or to terminate the contract subject to the legal requirements that apply to that situation.
“The remedy is not to make deductions from pay and this is the purpose of section 13 [of the] Employment Rights Act, so that employees and workers are not subject to deductions from wages where there is no agreement to the deduction.”
The claim for unlawful deductions was made by Alastair Dobbie, who was a consultant at London firm Feltons.
There are two elements to his claim, the other being for suffering detriments – ultimately the termination of his consultancy agreement – because he made protected disclosures about possible overcharging of a client under whistleblowing legislation.
As we reported last week, the Employment Appeal Tribunal overturned the decision that they were not protected disclosures and remitted the matter to a differently constituted tribunal.
The unlawful deduction element was decided separately and handed down in December, although it was only published last week.
In a preliminary ruling back in 2017, the tribunal decided that his consultancy agreement meant Mr Dobbie was a worker, rather than an employee, meaning his claims of unfair dismissal and breach of contract were dismissed, but the other elements of his claim could continue.
Mr Dobbie claimed over deductions made in relation to five clients, the most significant of which was whether in relation to a significant client there had been an agreement to double the £5,000 monthly fee he was receiving for two months.
The tribunal recorded that Feltons was unhappy with the standard of his work, with errors he made in issuing High Court proceedings meaning they had to be reissued, and that founder Paula Felton spent “a great deal of time working on the [the] matter herself as a result”.
This was one of the reasons Judge Elliott found there was no agreement to double the fee, while also noting there was no written record of it.
“The claimant is a solicitor and understands the importance of a written record of an agreement, particularly one that is as important to him as his pay. It was a simple enough matter, had there been such an agreement, for him to send an email.”
That meant Mr Dobbie was entitled to be paid the £5,000 a month, and the judge added that there was no provision in the consultancy agreement for the firm to claw back payments if it considered his work sub-standard.
Judge Elliott went on to find that Mr Dobbie was entitled to most of the rest of the sums claimed, ranging from £4,000 to £250, but also that credit had to be given for post-termination payments the firm made of £4,400.
She added: “[Feltons] acknowledges in many of the cases that the claimant did the work but says it was not of any value. The deduction of his pay is and was not an available option in those circumstances.”
The judge said there would have to be another hearing to determine remedy but “strongly urged” the parties to resolve it.
“The parties are also urged after 4.5 years of litigation to take a pragmatic approach to this versus the continuing stress of the litigation and the time and cost of yet another hearing,” the judge said.