Claimant v Engineering Systems Design (Group) Limited
Outcome
Individual claims
The tribunal found the respondent made an unlawful and unnotified deduction totalling £2,134.51 by withholding wages to recoup recruitment fees. The respondent was in repudiatory breach of contract by terminating employment early and failing to pay wages, thereby losing its right to enforce the recoupment clause under the General Billposting rule.
The tribunal found the respondent wrongfully terminated the claimant's employment before his notice period expired on 12 April 2024, instead treating termination as 29 March 2024. Additionally, the respondent failed to pay the claimant £249.13 for 3.5 days' work, constituting a breach of contract.
Facts
The claimant, a newly qualified building services engineer, was recruited via an agency (Flux Consulting) which charged the respondent £4,500 including VAT. His contract contained a clause requiring repayment of recruitment fees if he left within 12 months. After approximately 4 months, the claimant resigned with one month's notice to expire on 12 April 2024. The respondent deducted the entire recruitment fee from his final pay, leaving him with nothing, and issued a P45 showing termination on 29 March 2024, before his notice period had expired. The claimant claimed unlawful deductions from wages and breach of contract.
Decision
The tribunal found in favour of the claimant. The respondent had wrongfully terminated the employment early and failed to pay wages due, constituting repudiatory breaches of contract. Under the General Billposting rule, a party in repudiatory breach cannot rely on contractual terms to its advantage, so the respondent lost its right to enforce the recruitment fee recoupment clause. The deductions were therefore unlawful. The tribunal ordered repayment of £2,383.64 (£2,134.51 unlawfully deducted plus £249.13 for 3.5 days unpaid work). The respondent's counterclaim for the recruitment fees failed.
Practical note
An employer who commits a repudiatory breach of contract by wrongfully dismissing an employee or failing to pay wages cannot then rely on contractual recoupment clauses to claw back sums from that employee, even if the clause is not a penalty clause.
Award breakdown
Award equivalent: 5.0 weeks' gross pay
Legal authorities cited
Statutes
Case details
- Case number
- 2403513/2024
- Decision date
- 11 April 2025
- Hearing type
- full merits
- Hearing days
- 1
- Classification
- contested
Respondent
- Sector
- professional services
- Represented
- Yes
- Rep type
- barrister
Employment details
- Role
- building services engineer
- Salary band
- £25,000–£30,000
- Service
- 4 months
Claimant representation
- Represented
- No