Unlawful deductions

Where an employer changes the contract so as to pay the employee less and the employee continues to work, the change will be affirmed and will not amount to an unlawful deduction.

The facts

South Derbyshire District Council had a car-leasing scheme which the council decided to terminate. Although it held discussions with the union, these did not end in agreement, and the council decided that the scheme would be phased out.

Employees were worse off to the tune of more than £2,000 a year. They claimed that this amounted to an unlawful deduction.

The ruling

The EAT rejected their claim. It agreed that the council had no right to unilaterally change the car-leasing scheme. However, once it had made the change and the employees had continued to work, the amount of money due to employees effectively was the new changed rate, so that there was no deduction from their wages properly due to them.

Holdcroft and others v South Derbyshire DC EAT/0758/03