As part of their roles, the four Claimants received a Car User Allowance; individuals in receipt of such an allowance were categorised as either an “essential” or “casual” car user.  The Claimants’ allowances had historically been categorised as essential, but following a review of their car usage in March 2024, their essential status was removed and they were deemed casual car users.  This change came at a financial detriment and the Claimants lodged Tribunal claims alleging they had each suffered an unlawful deduction from wages.

The Claimants’ terms and conditions in respect of their entitlement to a Car User Allowance were governed by The National Joint Council for Local Government Services, National Agreement on Pay and Conditions – more commonly known as the “Green Book”.

Section 6 of the Green Book made provision for Car Allowances, as follows:

“6.1 Employees required to use their motor vehicles for the efficient performance of their duties will receive allowances for the use of their motor vehicles on business only after being so authorised by the local authority.  The local authority may determine whether the use is casual or essential and the cubic capacity of car considered appropriate.” 

The Green Book made a distinction between essential and casual users, as follows:

“6.2    Essential users are those whose duties are of such a nature that it is essential for them to have a motor car at their disposal whenever required.  If the employee uses a private car in carrying out those official duties then they shall be entitled to receive the lump sum allowance and mileage rates set out below.” 
…

“6.4    Casual users are those for whom it is desirable that a car should be available when required.  The mileage rates are as set out below.”

While disputed by the Claimants’ Representative in submissions at the Final Hearing, the Tribunal found, as a matter of fact, that the Respondent introduced a Travel and Subsistence Policy in 2017.  That Policy defined an essential car user as being:

“…those whose duties are of such a nature that it is essential for them to have a motor vehicle at their disposal whenever required.  Essential users must meet 1 of 2 criteria;-

1. an officer is required to make regular visits within the District to undertake a statutory function.  Posts within this category are normally limited to posts such as Environmental Health, Building Control and Licensing and Planning.
   
2. an officer undertakes at least 2,500 miles annually in the performance of their duties”.  

The Policy stated that mileage undertaken by employees would be reviewed annually to consider entitlement to the essential user allowance in conjunction with relevant Directors/Heads of Service.

In March 2024 the Claimants were each informed that the Respondent had carried out a review of their essential car user allowance and that their status was being changed from essential to casual car user and that they would each receive the corresponding mileage rate, effective from 01 April 2024.

The Claimants raised a group grievance, followed by an unsuccessful appeal process and they then brought Tribunal proceedings.

Their Tribunal claims were brought under Article 45 of the Employment Rights (Northern Ireland) Order 1996 (the provisions relating to unlawful deduction from wages).  That Article provides that:

“45.—(1) An employer shall not make a deduction from wages of a worker employed by him unless—

(a)    the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or

(b)    the worker has previously signified in writing his agreement or consent to the making of the deduction.” 

The Tribunal had to determine whether the Car User Allowance fell within the statutory definition of wages as defined by Article 59 of the 1996 Order, or whether the payments were merely an “expense”; the latter being specifically excluded from the statutory definition.  Evidently, if the allowance in question did not fall within the statutory definition of wages, any unlawful deduction from wages claim would not be well founded.

In the 1996 Order, “wages” is defined as follows:

“Meaning of “wages” etc.

59.—(1) In this Part “wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including—

(a)    any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,

………

But excluding any payments within paragraph (2).

(2) Those payments are—

(a)…

(b)any payment in respect of expenses incurred by the worker in carrying out his employment,”

In the course of the proceedings, the Tribunal was referred to a case from the Scottish Employment Appeal Tribunal, Dundee City Council v Robertson EAT/595/01, which also concerned the removal of an essential car user allowance and which the Respondent’s Counsel submitted was “on all fours” with the extant case.  In that case, the Industrial Tribunal at first instance had originally held that an essential car user allowance amounted to wages and that its removal had been an unlawful deduction.  The Tribunal’s decision was overturned on appeal; the EAT indicating that the Tribunal had misdirected itself in law by treating the allowance as wages because there was a profit element or because it was paid irrespective of the level of travel.  Lord Johnston at paragraph 9 of the EAT Decision commenting:

“…generally, what can be categorised as allowance and therefore expenses, does not necessarily have to meet precise expenditure incurred.  The fact that there was a profit element does not remove, in the appropriate case, the relevant payment from the notion of expenses if otherwise the relevant criteria are met.  Nor can an allowance be apportioned between the expense element and the profit element.  If there is an expense element, then that is sufficient to categorise the allowance in question as expenses.” 

The Tribunal also drew assistance from the case of Barrie v Rochdale Metropolitan Borough Council EAT/224/94 as follows: “There is nothing in the Act [in Northern Ireland the 1996 Order] which permits a Tribunal to say that a particular deduction was partly in respect of wages…and partly in respect of expenses…In our view in this case, the Tribunal had to determine whether the deduction was either wholly within s.7(1) [Article 59(1)] or wholly within s.7(2) [Article 59(2)]”. 

The Tribunal accepted the above proposition and concluded that the Car User Allowance in question was an expense and hence was specifically excluded from the definition of wages under the 1996 Order.  The claims therefore failed.

This is a helpful Decision for any employers who operate a Car User Allowance.  However, it also highlights the manner in which the Industrial Tribunal’s decision making authority is confined by statute.  Unlike the superior Courts, such as the High Court, the Tribunal has no inherent jurisdiction and can only adjudicate on matters and offer remedies which sit within its statutory remit.  That is, however, not to say that the removal or amendment of a Car User Allowance will always be without risk.  As the Tribunal noted, there may have been other avenues of redress available for the Claimants (presumably this may have been a reference to a breach of contract claim in the ordinary civil courts).  However, in this instance they elected to bring their claims in the specific statutory venue of the Industrial Tribunal and framed them under the one statutory heading.  The Tribunal was therefore bound to determine the matter within the statutory confines in which it operates – in this instance the matter turned on the definition of wages as per the 1996 Order.