Lack of Consent for Reduction in Wages on CJRS Results in Success for Claimant

Muncada v Marriott Hotels

In one of the first of very many claims I suspect to see is the Unlawful Deduction from Wages claim. I predict that there will be many of these claims following the ommission of employer’s obtaining their employees consent or written consent to furlough, and to a reduction in wages - which are separate matters.

In Muncada there was an express resistance to the furlough scheme, and he explicitly stated he wanted to receive his contractual salary, but despite this Marriott only paid the Claimant 80% furlough pay and then later dismissed him.

He brought claims for Unlawful Deduction from Wages for the period he was paid 80% furlough pay.

Pursuant to s.13 of the ERA 1996 an employer may not make a deduction from the wages of any worker employed by the employer, or receive a payment from such a worker, unless:

1.    it is required or authorised to be made by virtue of any statutory provision or any relevant provision of the worker's contract, or

2.    the worker has previously signified in writing their agreement or consent to the making of it

These types of cases will no doubt flood the Tribunals given that a lot of employers relied on the scheme as entitlement to reduce employees pay. There was great reliance placed on the Guidance which made no mention of the need for any furlough agreement being in writing, but you may remember that Treasury Direction made explicit reference to the need to be in writing, which has undoubtedly made for a very messy situation which the courts will be left to deal with.

It has always been understood that consent to furlough was required the format of which was a grey area at the beginning. That being said, the need for an agreement to furlough is not the same thing as an agreement to receive a reduced rate of salary and the two are separate matters and will have needed to be referenced separately in my view, albeit may be contained in the same document.

The furlough scheme did not, and does not allow for employers to unilaterally vary an employees pay without consent which appears to have been a misunderstood concept of the scheme.

Muncada’s claim for unlawful deduction from wages pursuant to s.13 brought under s.23 complaint of the Employment Rights Act 1996 was successful.

The judgement can be read here.