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Deductions from wages:"Expenses" widely construed

This report relates to 1 case(s)

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    Southwark London Borough v O'Brien [1996] IRLR 420 EAT (0 other reports)

For the purposes of the statutory provisions prohibiting unlawful deductions from wages, the definition of "wages" excludes "any payment in respect of expenses incurred by the worker in carrying out his employment". The words "in respect of" indicate that "expenses" is to be construed more widely than simply the reimbursement of the precise sum expended by the worker, holds the EAT in London Borough of Southwark v O'Brien [1996] IRLR 420. Accordingly, in this case, a generous car mileage allowance which exceeded the actual expenses incurred by an employee was properly categorised as expenses rather than wages, notwithstanding its profit element. The industrial tribunal therefore had no jurisdiction to hear the employee's complaint that his employer's refusal to pay the allowance was an unlawful deduction from his wages.