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2 November 2012
Employment Appeal Tribunal (EAT)
HHJ McMullen QC, MR D Evans and Mr J R Rivers
Payments which are genuinely in respect of expenses, however generous they may be, are not ‘wages' for the purposes of the rules on unlawful deductions from wages.
This case concerned a dispute about the interpretation of two agreements whereby the two employees were seconded from the Australian parent company to a UK subsidiary company. The employees argued that the contracts they signed entitled them to a food allowance and a housing allowance on top of their salary. The Employment Appeal Tribunal concluded that the contracts made clear those payments were included within the remuneration figure quoted in the contracts. On that basis, their claims failed. But they would have failed anyway because those payments were payments for expenses and so did not constitute ‘wages'. The tribunal therefore had no jurisdiction to deal with the claim for unlawful deductions from wages in respect of the failure to pay those expenses on top of the overall remuneration figure.
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