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Northern Ireland
Patrick Raymond McCartan v Farrans (Construction), t/a a division of Northstone (NI) Ltd
Published on: 27/11/2015
Issues Covered:
Pay
Article Authors The main content of this article was provided by the following authors.
John Taggart BL
Background

The claimant claimed that there had been a series of unauthorised deductions from his wages with effect from 3 August 2009 to the date of hearing. It was the respondent’s contention that the claimant had consented to the withdrawal of certain weekly payments by virtue of his conduct over the previous number of years. 

An amount described as a bonus or enhancement was added to the claimant’s weekly pay in 1999 which, it was agreed, related to travelling expenses. The respondent then wrote to the claimant in 2009 stating that these payments were made at the discretion of management and would be ceasing as a direct consequence of market conditions arising from the recession. The claimant unsuccessfully appealed. 

Despite the amounts clearly compensating travel to and from work, the Tribunal held that they amounted to ‘wages’ and rejected the respondent’s argument that wages should be given their ‘ordinary meaning’. It was held that the claimant was entitled to an award of £21,993.60 in respect of a series of unlawful/unauthorised deductions from wages.

Practical lessons

The decision to categorise the travel expenses as ‘wages’ was based on the method by which the respondent remunerated the claimant. There was not a system whereby the claimant would present a claim for expenses or where expenses were claimed or recouped in any other way. Instead, the longstanding travel expenses was in fact the payment of an ‘emolument’ which was not caught by the definition of expenses. 

The question of whether a payment is wages or expenses is one of fact and degree (Southwark London Borough Council v O’Brien [1996] IRLR 420). Where an amount, such as that in this case, is a regular payment which is not actually based on the actual travel made then it is more likely to fall under wages as opposed to an expense. An employer seeking to avoid such a situation may want to ensure that expenses are by specific reference to travel actually incurred as opposed to a standard weekly/monthly payment.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 27/11/2015
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