Clarifying pay entitlements during employee suspension: tribunal highlights key requirements for withholding wages
A recent Employment Tribunal decision emphasises the need for explicit contractual terms when withholding pay during periods of employee suspension or when restrictions are imposed by third-parties.
Background
In the high-profile case of Mendy v Manchester City FC, the Tribunal examined the issue of unlawful deductions from wages during suspension. Benjamin Mendy, a professional footballer, was suspended without pay by Manchester City FC while on bail for serious charges and prohibited from participating in football-related activities by the Football Association (FA). The club justified the non-payment by arguing that his own actions had made him unavailable for work, citing his bail conditions and the FA's suspension as factors preventing him from fulfilling his role.
Tribunal findings
The Tribunal held that Manchester City’s decision to withhold Mendy’s wages was unlawful for periods during which Mendy was on bail, despite being prohibited from playing by the FA. It concluded that employees are generally entitled to pay during suspension unless there is an express contractual term permitting non-payment. In this case, the employment contract did not contain any terms explicitly allowing for wage deductions in circumstances involving suspensions or third-party restrictions, such as the FA’s prohibition.
The Tribunal distinguished between time spent on remand (in custody), where deductions may be justified, and time on bail, during which Mendy was 'ready and willing' to work. Although the FA’s suspension barred him from participating in club activities, this third-party restriction did not absolve the club of its obligation to pay him without an explicit contractual basis for doing so.
The Tribunal’s ruling serves as a first-instance decision, meaning it is not binding on other cases but can be persuasive in similar employment disputes.
Implications for employers
This case highlights the importance of clearly defined suspension terms in employment contracts, especially when an employee’s ability to work may be affected by third-party prohibitions, like regulatory governing body restrictions. To withhold pay lawfully, employers must ensure that contracts contain explicit terms allowing for non-payment during suspensions due to external factors. Without such clarity, employers risk claims of unlawful deductions, with potential legal and financial repercussions.
Employers should also weigh the strategic impact of withholding pay in circumstances involving legal or regulatory issues. Such decisions can lead to protracted and costly disputes, especially when an employee's non-availability stems from factors beyond the employer’s direct control. Clear contractual language and careful handling of pay during suspension can mitigate these risks and protect against legal challenges.
Conclusion
The Tribunal’s decision serves as a reminder of the critical importance of well-drafted contracts regarding suspension and pay. In the absence of clear contractual language, employers should approach non-payment during suspension cautiously, particularly where third-party restrictions are involved. Comprehensive contracts can help prevent disputes and support fair treatment of employees.