Unauthorised deductions from wages: Mendy v Manchester City Football Club Limited

If you are a football fan and interested in employment law, you will no doubt have been eagerly awaiting the outcome of Benjamin Mendy’s claim that his former club, Manchester City (“City”), unlawfully made deductions from his wages. As Employment Judge Dunlop (“EJ Dunlop”) said: “I am fairly sure that no other single claimant has ever alleged that sums in the region of £11 million have been deducted from his wages”.

A brief background

In September 2021, approximately a month after Mr. Mendy was charged with committing several offences, including rape and sexual assault, City informed Mr. Mendy that they would stop his wages because he was not ready and able to perform the obligations of his contract. City said that Mr. Mendy was unable to perform his obligations, predominantly because he was subject to an FA Safeguarding ban preventing him from training and playing football matches while awaiting trial for criminal allegations. He was also subject to bail conditions and was placed in custody whilst awaiting trial due to a breach of his bail conditions. Ultimately, Mr. Mendy was cleared of all charges against him and his contract with City ended in 2023. Mr. Mendy brought a claim to recover the wages that he said were owed to him.

Can an employer withhold pay?

Section 13 Employment Rights Act 1996 (“ERA”) says

(1) An employer shall not make a deduction from wages of a worker employed by him unless—

(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or

(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.

As EJ Dunlop made clear, the only question for her to consider was whether City was legally entitled to withhold that pay, within the terms of s.13 ERA.

Numerous arguments were deployed by both sides. At their simplest:

1. Mendy argued that his contract contained no express term permitting deductions to be made (or to allow City to stop paying his salary) in these circumstances. He said the terms of the contract presented City with a binary choice – to follow the dismissal procedure (which would, if a dismissal resulted, have freed Mr Mendy to contract with another club) or to keep him under contract and continue paying him. There was no legitimate mechanism to keep him under contract whilst refusing to pay him.
2. City agreed that there was no express term permitting it to withhold payment in these circumstances. City argued that there was an implied term to permit the employer to stop paying wages in such circumstances and /or that his salary was payable under the contract because the impediments stopping Mr. Mendy from performing his contract were all avoidable because of his culpable behaviour, namely, Mr. Mendy largely brought his troubles upon himself and ignored sensible advice and warning after warning in his self-destructive pursuit of his chosen lifestyle.

Outcome

The majority of Mr. Mendy’s claim was successful, and he recovered his wages for a period of 16 months and 23 days. During this period, EJ Dunlop found that he was “ready and willing to work” but was prevented from doing so because of the FA Safeguarding ban and his bail conditions which were unavoidable impediments and involuntary on his part. EJ Dunlop was clear that Mr. Mendy was not to be blamed for his inability to perform the contract during this period.

Mr. Mendy was remanded in custody for two periods, namely, from 1 September 2021 to 7 January 2022 and, again, from 30 December 2022 to 17 January 2023. During this period, EJ Dunlop found that Mr. Mendy’s inability to perform the contract was, in part, due to his own culpable actions in breaching his bail conditions. In those circumstances, EJ Dunlop found that City was entitled to withhold pay for those periods.

Thoughts

City sought to defend the claim on the basis that the wages were not properly payable in the first place because Mr. Mendy couldn’t do his job, and he was not entitled to be paid because no work was done or capable of being done under the contract. There are numerous cases where the Courts adopted this line of reasoning and found that employees who had, by virtue of their own actions, disabled themselves doing any work would not be entitled to salary.

City’s argument of an implied term did not get far with the judge who found that, save for the periods of custody, his actions had not been the cause of his inability to perform his duties.

A key note for employers is that, apart from in exceptional circumstances which would justify a departure from the general principle, an employer will need an express contractual provision in order to withhold wages during a period of suspension (which itself should be imposed as a precautionary measure and not a sanction). Even then and with the appropriate clause in the contract, care must be taken and non-payment of wages could be seen as a punishment creating the risk of separate claims.

A final point to note is that given the sums in dispute, it wouldn’t be surprising if City appeal to the Employment Appeal Tribunal.