Set-off is a valid defence in the Employment Tribunals
12th December, 2014
Employment Appeal Tribunal states that set-off is a valid defence in the Employment Tribunals
In what is likely to be a welcomed step forward for businesses, the Employment Appeal Tribunal has considered whether a claimant’s successful loss of pension rights claim can be set-off by a respondent’s counterclaim for an amount of overpaid wages in the case of Ridge v HM Land Registry UKEAT/0485/12.
In the first reported case of its kind, the Employment Appeal Tribunal has upheld a first instance decision that set-off is available as a defence in Employment Tribunals. Where two parties owe each other money, one party may exercise a right of set-off to reduce or eliminate its liability to the other party.
This development may be particularly welcomed by businesses as it could assist with the short limitation period which counter claims are subject to. However, this does not mean that employers simply do not need to present a valid counterclaim. Merely raising the claim as a set-off would leave the employer without a proper remedy where the employee’s contract claim fails on its own merits (leaving the employer with nothing to apply the set-off against) or where the employee’s claim is significantly less than the employer’s.
In this particular case, the employee made a claim for loss of pension rights during his notice period. The employer’s counterclaim for overpayment of wages was deemed to be out of time. In the absence of the defence of set-off, the employer would have been liable to pay the pension rights claim in full. The amount of the overpaid wages was not clear from the tribunal findings and the case has been remitted to a fresh tribunal.
For further information and advice in relation to Employment Tribunal claims, please contact Claire Brook on 01244 405575 or send an email to [email protected].
You might also be interested in...
18th July, 2018
Special Focus: Solicitors’ Professional Indemnity Insurance Run-off – it dominates the thoughts of sole practitioners and partners in smaller law firms in my experience and restricts the ambitions of firms. The SRA could help law firms by relaxing their rules on run-off cover on their Solicitors’ Professional Indemnity Insurance to help firms merge or close more easily. This would protect... Read More »
17th July, 2018
Helen Watson, Head of Employment Law at Aaron & Partners LLP, has taken up an invitation to become a Trustee of both the Trust Board and the Main Board Theatr Clwyd has bolstered its senior leadership team with the appointment of an experienced employment law solicitor to support its vision of being at the forefront of theatre making... Read More »
6th July, 2018
When a business invests in its community it deserves praise – but it must go beyond that, writes Helen Watson, a trustee at Claire House and partner at Aaron and Partners Solicitors. Corporate social responsibility (CSR) is the link between a company and the community in which it operates. As a trustee on charity boards including Claire House... Read More »