The claimant was employed by the respondent from 28th January 2019 until she resigned on 19th April 2019.  The issue arose subsequent to her dismissal when the respondent deducted £945 from her final wages.  The deduction was made as a result of a contractual clause allowing recoupment of recruitment agency fees.  The claim brought was that such a clause was unlawful as it was a ‘penalty’ clause.  She had also issued grievances about her treatment when she was in the role.  

The Tribunal, at first instance, dismissed the claimant’s claim on the basis that it was not a penalty clause and there had been no express breach of contract by the respondent which would have allowed the claimant to recover the fee.  The claimant appealed this decision also noting that there was only a one hour hearing, the claimant was unrepresented and the majority of the time was taken up by legal arguments made by the respondent on penalty clauses.  

The EAT allowed the appeal citing the failure of the Tribunal to properly examine whether there had been constructive dismissal.  The claimant had never mentioned constructive dismissal at first instance but considering the grievances and the issues with how she was treated being linked to the resignation, the Tribunal should have considered it.  When these issues were also mentioned when it came to the penalty clause, the Tribunal should have picked it up then and reconvened a hearing to examine whether constructive dismissal had taken place.  The basis of any constructive dismissal, according to the EAT, would have been whether the respondent had breached the implied term of mutual trust and confidence.  If that had occurred then the recoupment of fees clause could not be relied upon by the respondent. Therefore, the case was remitted back to the Tribunal.  

Practical Lessons 

This case provides a useful examination of a couple of points.  From the point of the Tribunal dealing with the cases there must be some exploration into the issues arising and with unrepresented claimants it should be considered that they may not use the particular legal terminology such as constructive dismissal.  That does not mean it should not be considered.  The second issue is the nature of the clause which was not fully discussed in this judgment.  It seems unfair that an employee would be met with the costs of recruitment and it may be interesting to see how a newly convened Tribunal deals with this aspect.
https://www.gov.uk/employment-appeal-tribunal-decisions/miss-s-holmes-v-tellemachus-ltd-2022-eat-71