Introduction

The case of Lucy & Ors v British Airways Plc ([2009] UKEAT 0033_08_1301) presents a critical examination of the jurisdictional boundaries of Employment Tribunals in the United Kingdom, particularly concerning claims of unlawful deductions from wages under Part II of the Employment Rights Act 1996 (ERA 1996). Seventy-eight cabin crew employees of British Airways (BA) appealed against a decision by the Employment Tribunal, which had dismissed their claims on the grounds that the Tribunal lacked jurisdiction to hear them. The crux of the dispute revolved around whether the failure to pay certain allowances, which were contingent upon being rostered for flying duties, constituted unlawful deductions from wages or claims for damages due to breach of contract.

Summary of the Judgment

The Employment Appeal Tribunal (EAT) upheld the original Tribunal's decision, dismissing the Claimants' appeals. The EAT affirmed that the Claimants' claims were not actionable under Part II of the ERA 1996 as they were unquantifiable unlawful deductions from wages. Instead, the claims were characterized as damages for the loss of the opportunity to earn allowances, which fall outside the jurisdiction of Employment Tribunals and should be pursued in the County Court. The judgment extensively analyzed the nature of "wages" under the ERA 1996, the concept of quantifiability, and the implications of preceding case law, notably the Coors Brewers Ltd v Adcock & Others case.

Analysis

Precedents Cited

The judgment references several key precedents to articulate the legal framework governing the quantifiability of claims under Part II of the ERA 1996:

• Coors Brewers Ltd v Adcock & Others [2007] ICR 983: This case established that claims not capable of being quantified do not fall within the jurisdiction of Employment Tribunals under Part II of the ERA 1996.
• Delaney v Staples [1991] IRLR 112: Affirmed that certain payments in lieu are not considered "wages" and thus cannot be claimed under Part II of the ERA 1996.
• Secretary of State for Health v Rance [2007] IRLR 665: Outlined the discretionary principles Employment Tribunals must follow when allowing new points of law on appeal.
• House of Lords in Delaney v Staples ([1992] 1 AC 687): Determined that payments in lieu of notice are claims for damages, not "wages."

These precedents collectively informed the EAT's stance on the necessity of quantifiability for claims to fall within the Tribunal's purview and the distinction between wages and damages.

Legal Reasoning

The EAT's legal reasoning centered on several pivotal points:

• Definition of Wages: Under Section 27(1) of the ERA 1996, "wages" include various forms of remuneration related to employment, such as fees, bonuses, commissions, and allowances.
• Quantifiability Requirement: For a claim to be actionable under Part II of the ERA 1996, it must be capable of quantification. The Tribunal assessed whether the Claimants could specify the amount of unpaid allowances.
• Application of Section 224: The Claimants argued that Section 224 of the ERA 1996 provided a method for calculating lost wages. However, the EAT concluded that Section 224 was intended for specific scenarios concerning "a week's pay" and did not directly apply to the current case.
• Nature of the Claim: The EAT determined that the Claimants' inability to earn allowances due to BA's closure of the Manchester base constituted a loss of opportunity rather than an unlawful deduction of wages.

The EAT emphasized that while Employment Tribunals can handle complex and difficult-to-quantify claims, the nature of the Claimants' losses—being tied to unfulfilled flying duties rather than directly earned wages—rendered their claims unquantifiable under Part II of the ERA 1996.

Impact

The judgment has significant implications for future employment claims involving variable remuneration:

• Jurisdictional Clarity: Reinforces the boundaries of Employment Tribunals, clarifying that claims for loss of potential earnings or opportunities do not fall within Part II of the ERA 1996.
• Quantifiability as a Litmus Test: Establishes that the ability to quantify the loss is essential for a claim to be actionable under the relevant section of the ERA 1996.
• Shift to County Courts: Encourages Claimants with similar grievances to pursue their claims through County Courts as they pertain to damages for breach of contract rather than unlawful deductions from wages.
• Case Law Development: Contributes to the evolving jurisprudence on the interpretation of "wages" and the scope of Employment Tribunals' jurisdiction.

Complex Concepts Simplified

Unlawful Deductions from Wages

Under Section 13 of the ERA 1996, employers are prohibited from making unauthorized deductions from an employee's wages. However, for a deduction to be considered unlawful, it must be quantifiable—a specific amount that can be clearly identified.

Quantifiability

Quantifiability refers to the ability to assign a definite monetary value to the loss or deduction in question. If a Claimant cannot specify the exact amount lost, the Employment Tribunal may deem the claim unquantifiable and thus outside its jurisdiction.

Part II of the Employment Rights Act 1996

This part of the Act deals with the protection of wages, including rules against unlawful deductions. It provides a framework for employees to claim deductions that are not authorized by contract or statute.

Section 224 of ERA 1996

Section 224 provides a method for calculating "a week's pay" in circumstances where there are no normal working hours. It is specifically designed for determining average remuneration and is not intended to be a catch-all provision for quantifying all types of wage-related claims.

Loss of Opportunity vs. Unlawful Deduction

Loss of opportunity pertains to the potential earnings an employee could have received had certain conditions (like flying duties) been met. Unlawful deduction involves specific sums that were wrongfully withheld. The former relates to damages for breach of contract, while the latter falls under Part II of the ERA 1996.

Conclusion

The Lucy & Ors v British Airways Plc judgment serves as a pivotal reference point in delineating the scope of Employment Tribunals' jurisdiction concerning wage-related claims. It underscores the necessity for claims under Part II of the ERA 1996 to be not only related to actual wages but also to be quantifiable in nature. Claims that revolve around the loss of potential earnings or opportunities, which cannot be precisely measured, fall outside the Tribunal's authority and must be addressed through alternative legal avenues, such as the County Courts. This distinction is crucial for both employers and employees in understanding the appropriate venues for different types of employment disputes.