The claimant worked for the respondent as a CCTV operator. Since 1 December 2009, relevant CCTV operators are legally obliged to possess a CCTV licence granted by the Security Industry Authority (SIA). The claimant argued that the respondent had failed to pay his SIA licence fee and that he had suffered a financial detriment. The argument was essentially that the respondent’s failure to reimburse the claimant for the fee amounted to an unlawful ‘deduction’ from his ‘wages’.

An arrangement had been put in place for the reimbursement of employees who had paid the fee but left before the expiry of the licence. The tribunal rejected the argument that the employer had made a ‘deduction’ on the technical point that the claimant actually paid the fee after the commencement of the tribunal proceedings. Further, the tribunal seemed to reject the contention that the fee amounted to wages and would more properly be considered an ‘expense’. That was not determinative of the case as the tribunal had already held that the respondent was not under any contractual obligation to reimburse the claimant for his expenditure on the licence fee. The claim was dismissed.

Practical Lessons

While it was the lack of contractual obligation that decided this case, the tribunal was sceptical of the argument that an employee who makes a payment in respect of a licence fee, which he must have if he is going to carry out his work, was incurring expenses in carrying out his employment.

In some cases employers may well make the argument that the amounts being claimed do not amount to wages at all but are ‘expenses’ and excluded under Art 45 ERO 1996. The case law demonstrates that expenses which have been paid over a long period can potentially become part of a wage when in reality they no longer serve the purpose of an ‘expense’.

This is unquestionably a matter of fact and degree but there is no reason why employers cannot review their internal procedures and clarify what they consider to be expenses. Whilst it didn’t become a determinative issue in this case, clear communication to employees that the licence fees were to be considered expenses and not part of the wage would have brought some clarity.