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Unlawful Deduction of Wages – Contractual Disputes: Agarwal v Cardiff University and another

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Calendar May 18, 2017

A worker who suffers a deduction from wages may bring a claim in the employment tribunal to recover the shortfall if it was not made in accordance with a written agreement with the employer or provided for in writing within the contract of employment itself. In Agarwal v Cardiff University and another, the EAT held that a claim for unlawful deduction of wages cannot be made where the employment tribunal would have to engage in an exercise of interpreting the terms of the contract in order to decide whether or not there has been a deduction.

Ms Agarwal l was employed by Cardiff University as a senior lecturer in urology and – as is common with such posts – also had what is known as an ‘honorary contract’ with the local health board under which she undertook a range of clinical duties. She was therefore regarded as having two employers – although she was paid solely by the University. A separate arrangement between the University and the health board, meant that they shared the cost of her salary between them.

In 2014 Ms Agarwal was absent for an extended period of time because of a stress-related illness arising from various difficulties she had experienced in her relationships with colleagues. When she was certified as fit to return to work, the University accepted her return but the health board felt that she could not safely return to clinical duties until some of those difficulties had been resolved and they asked her to participate in mediation. She refused to do so until some of the issues that she had raised had been investigated, but in the meantime asserted that she was ready willing and able to undertake the full range of her medical duties.

The health board persisted in its belief that she should not be allowed to undertake clinical work, however, and withheld funds from the University. As a result, she only received half of her salary. She took both employers to an employment tribunal alleging that she had suffered an unlawful deduction from her wages.

The employment tribunal held that it had no jurisdiction to hear her complaint and the EAT agreed. To determine whether there had been an unlawful deduction, the tribunal would have been obliged to carry out a detailed interpretative exercise to decide whether her entitlement to payment for clinical work depended on her actually performing such work or at least cooperating with the employer in any assessment of her fitness or attempts to resolve the issues regarding her relationships with colleagues. The unlawful deduction from wages regime was not intended to be a forum for resolving disputes as to the interpretation of a contract and the tribunal had no jurisdiction to undertake that exercise. The issue would have to be resolved in a claim before the civil courts.

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