In this case, the employment tribunal determined that Manchester City Football Club's ("MCFC") non-payment of wages to a player for 18 of the 22 months he was suspended from work pending trial for sexual offences amounted to an unlawful deduction from wages.
Background
The Employment Rights Act 1996 ("the Act") prevents employers from making deductions from a worker's wages except in defined circumstances. These include where the deduction is authorised by law or by a provision in the worker's contract, or where the worker consents to the deduction in writing.
In the absence of specific contractual clauses, case law also allows employers to withhold pay if the worker is not "ready, willing and able" to work during a period of suspension. For example, pay may be withheld from a suspended worker who cannot work because: doing so would breach their bail conditions; they have been remanded in custody; or they have been suspended by an external regulator. However, pay may only be withheld in these circumstances if the impediment to the worker's return to work was avoidable by the worker, i.e. it involved some degree of culpability. If the impediment was unavoidable by the worker, then withholding pay will amount to an unlawful deduction.
Facts
Mr Mendy joined MCFC in July 2017, on a base salary of £6 million per year, for an initial fixed term expiring on 30 June 2023. During 2020 and 2021, Mr Mendy was arrested on a number of occasions on allegations of sexual offences and was released on conditional bail. His bail conditions included a prohibition on him hosting parties at his home. He nevertheless continued to host parties at his home.
On 26 August 2021, Mr Mendy was charged with multiple offences relating to his conduct at those parties and was held in police custody. On 27 August 2021, his application for bail was refused, in part because he had breached his previous bail conditions. Also on that date, the Football Association (FA) suspended Mr Mendy, prohibiting him from taking part in any football-related activity. The FA suspension was initially stated to be for a six month period, although in practice it remained in place until Mr Mendy's contract with MCFC expired at the end of June 2023.
MCFC initially informed Mr Mendy on 27 August 2021 that he was suspended for a period of 14 days with full pay while a disciplinary investigation was conducted. On 10 September 2021, MCFC extended the suspension on full pay by a further 28 days.
However, on 28 September 2021 MCFC informed Mr Mendy that his salary would be withheld from that date, and that his wages for September would also be withheld, both because he had been remanded in custody and because of his suspension by the FA. MCFC also decided to pause its disciplinary investigation pending the outcome of the criminal process.
Mr Mendy was released on conditional bail on 7 January 2022. As well as preventing him from hosting parties, his new bail conditions effectively prohibited him from training with MCFC. On 30 December 2022, Mr Mendy was again remanded in custody due to another breach of his bail conditions. He was then released on bail on 18 January 2023, and he remained on bail until the expiry of his contract with MCFC on 30 June 2023. MCFC continued to withhold Mr Mendy's wages throughout this period. Mr Mendy was eventually acquitted of all of the charges against him.
Mr Mendy claimed unlawful deductions from wages. The employment tribunal upheld his claim in part. As to whether or not an impediment is avoidable, the tribunal noted that the question is whether the employee in whole or in part contributed to the state of affairs whereby they were unable to work, but that this issue cannot be determined by reference to guilt or innocence, nor to whether the employee was granted bail.
In respect of the periods when Mr Mendy was remanded in custody, the tribunal found that the impediment to him returning to work was linked to the fact that he had acted in a culpable way by breaching his bail conditions. This was an avoidable impediment, so Mr Mendy was not entitled to recover his salary from MCFC for those periods.
However, during the periods when Mr Mendy was not in custody but was on bail, he was prevented from returning to work by his bail conditions and the FA suspension. The tribunal found that neither of these impediments was avoidable by Mr Mendy. As such, withholding his wages during the periods when Mr Mendy was on bail amounted to an unlawful deduction.
The tribunal did not rule on the amount of compensation due. However, since it determined that Mr Mendy's wages had been withheld unlawfully for 18 of the 22 months concerned, the likely award is approximately £8.5 million.
What does this mean for employers?
This is only a tribunal judgment, and therefore not binding. However, it highlights the difficult balance faced by employers when weighing up reputational risks and legal obligations in deciding whether to suspend workers without pay pending a criminal trial and/or – in regulated industries – where the regulator imposes a lengthy suspension.
Employees under investigation will usually be suspended on full pay and benefits. It may, though, be possible to withhold payment during the employee’s suspension where the employer has a contractual right to make the deduction. Many employment contracts will include the power to suspend the employee in certain circumstances but they should also clearly set out the terms that apply if the employee is suspended – including the circumstances in which the employer can withhold and/or recover wages.
However, this may be unattractive as enforcing such provisions could be viewed as a presumption of guilt, and the imposition of a disciplinary sanction, potentially leading to constructive dismissal claims based on breach of trust and confidence.
