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30th June, 2011

Bank manager detained in custody on remand not entitled to wages.

An employee who was remanded in custody pending a criminal trial which subsequently resulted in his conviction was not entitled to be paid his wages for the period that he was detained on remand. In the case of Burns v Santander UK plc UKEAT/0500/10, the Employment Appeal Tribunal (“EAT”) upheld a Tribunal’s decision that the employee was not “unavoidably” prevented from working. This case highlights the importance for employers of ensuring that their contracts of employment contain appropriate provisions relating to lawful deductions from wages.

The employee at the centre of the case, Mr Burns, was a branch manager for Santander (“the Bank”). He was arrested in February 2009 and charged with committing thirteen criminal offences. Following his arrest, he was placed in custody on remand for six months pending trial, which took place in August 2009. At the trial, Mr Burns was convicted of two of the thirteen offences – common assault and assault with intent to commit sexual assault – and acquitted of the remaining eleven. He received a suspended sentence of imprisonment plus an order for unpaid work and a supervision order, with the six months that Mr Burns had spent on remand being taken into account as part of the sentence.

While Mr Burns had been on remand, the Bank had kept his job open for him but had ceased paying his wages. Following his conviction and release from custody, Mr Burns was suspended on full pay pending disciplinary proceedings, which concluded with his dismissal. Mr Burns subsequently brought an Employment Tribunal claim against the Bank for unlawful deductions from wages for the period during which he had been on remand in custody. The Tribunal at first instance dismissed the claim, holding that Mr Burns’ “contractual entitlement to pay ended when he did not provide consideration for it by attending work”.

Subsequently, Mr Burns appealed against the decision to the EAT, alleging that he had been ready and willing to work during the period in which he had been in custody but had “unavoidably” been prevented from doing so and was therefore entitled to be paid. Mr Burns contended that the decision to remand him in custody lay with the criminal courts and not with him and therefore he should not have been denied his pay.

The EAT dismissed Mr Burns’ appeal and upheld the Tribunal’s decision not to award Mr Burns his unpaid wages. The EAT decided that the Tribunal had been entitled to find that Mr Burns’ remand in custody had been an “avoidable impediment”. As a consequence, it was to be implied that Mr Burns was not entitled to be paid his wages for the remand period. Despite the fundamental doctrine of innocence until proven guilty, the Tribunal stated that Mr Burns’ conduct had been sufficiently serious for the criminal judge to order that he be placed in custody. Therefore, although Mr Burns had not been convicted of any offence at the time that the Bank decided not to pay him, the judge had deemed that he should be deprived of his freedom and therefore deprived of his right to attend work.

This decision raises questions as to what the outcome would be in a similar case involving a wholly innocent employee who is prevented from working due to being detained in custody. Cases such as this one involving claims for unlawful deductions from wages often hinge upon what terms it would be reasonable to imply into the employee’s contract of employment in terms of whether or not they have a right to be paid in those particular circumstances.. That said, the starting point for a tribunal is an employer is not entitled to deduct from an employee’s wages if it does not have the express written consent of the employee in advance to do so. Therefore, there must be an express lawful deduction from wages clause in the contract of employment and it must be signed by the employee. Employers can improve their protection against such claims by ensuring that their contracts contain appropriately drafted lawful deductions from wages clauses. It is therefore important for employers to check their existing contracts and update them where necessary in order to ensure that they contain adequate provisions.

For a free review of your contracts of employment or for any further information, please contact Helen Watson on 01244 405565 or e-mail her here.

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