Cleeve Link Ltd v Bryla concerned the question of the enforceability of a clause seeking to recoup recruitment costs from an employee, and clearly establishes that an Employment Tribunal is entitled to consider whether or not such a clause is unenforceable as a penalty.
It arose in the case of Ms Bryla, a care worker recruited from Poland. Her contract of employment incorporated a term entitling her employer to recover all of its recruitment costs, which included an agency fee of £400 and her airfare, if she left within the first 6 months of her employment. The clause provided that after 6 months’ employment, the proportion recoverable would reduce gradually to zero over the next half year (reducing by one-sixth each month). Ms Bryla left the job after only 12 weeks, when she was dismissed without notice for misconduct following an altercation about her working hours. She was owed £1,203.35 for unpaid wages but was paid nothing.
An employment judge found that the clause was unenforceable as a penalty, despite finding that the clause represented a genuine pre-estimate of the costs of recruitment incurred by the employer. The Employment Apppeal Tribunal overturned this. On the facts as found by the Employment Judge, the clause did not amount to an unenforceable penalty but a genuine liquidated damages clause. However it firmly rejected the employer’s suggestion that an Employment Tribunal has no jurisdiction to find a penalty clause unenforceable.
It seems to me that the deduction contemplated by the contract must be a lawful deduction. If it is a penalty clause, it is not a lawful deduction, and I cannot accept [Cleeve Link’s] argument that it is not within the province of the Employment Tribunal to decide this matter. This is no different to a number of other aspects of a contract of employment that fall to be considered, construed and adjudicated upon in the context of the statutory jurisdiction.
One further observation about this case is that it may well give an idea of the shape of things to come in courts and tribunals. Ms Bryla represented herself, and His Honour Judge Hand commented that the hearing had proceeded more slowly than it might have otherwise done so that he could ensure that she understood what was happening and it is clear that despite his best efforts he was not confident that she had grasped the limitations of the jurisdiction of the Employment Appeal Tribunal as an appellate forum.
There has been a significant erosion of the right to legal representation over the last two to three years, with severe curtailment of access to legal aid, pressure on many law firms with the result that a significant number are closing, restrictions on no win no fee employment cases because of their complexity and unpredictable nature and, above all in tribunals, the introduction of fees. As I have said previously, whether you are an employer, an employee or both, systematic attacks on our judicial processes are unlikely to prove beneficial for anyone in the medium to long term, let alone for those who face the immediate prospect of denial of access to justice.