Financial Fair Play? Manchester City and Unlawful Deductions of (very high) Wages
It’s rare that the often-incomparable wages of Premier League footballers end up the the subject of claims in the employment tribunal by the footballers themselves. It’s equally as rare that the subsequent rulings end up providing employees of more modest sectors with the security of knowing exactly where the goal posts lie (sorry) concerning when and how their own wages can be reduced or withheld. Rulings which incidentally originated from circumstances that no one involved would wish to find themselves.
Case Facts
In 2021, the then Manchester City defender Benjamin Mendy was arrested for rape and in August of that year he was subsequently charged by Cheshire Constabulary. His initial application for bail was refused on the grounds that he had breached previous bail conditions and he was remanded in custody.
Five months later in January 2022 he pleaded not guilty and was granted bail on conditions that he did not attend any house parties, did not contact the complainants, that he resided at his address and surrendered his passport. At the subsequent trial in January 2023 he was found not guilty of all charges. Mendy left Manchester City on the expiry of his contract in June 2023 and announced he would be making a claim against the club in the employment tribunal for unlawful deduction of wages.
FA Ban and wage deduction
From the point of his charge up to his acquittal Mendy was subject to a ban on any football related activity by the Football Association, the effect of which was that he was essentially suspended from his role at City without pay. In refusing to pay his not insubstantial wages during these months, the club argued they had an implicit right to do so as he was not able to perform his contractual obligations. According to City, the cause of his inability to do so – the FA ban – had been brought about by his own actions. That he was only remanded in custody for five of the 22 months that the ban had stood for did not alter this position.
Tribunal Action
Mendy cried “foul” (sorry again). His argument was that but for the FA ban he was ready and willing to perform the contract during the months that he was not remanded in custody and that the barriers which prevented this were not of his doing or control. It was the policy of the FA not his own actions that had prevented him from playing.
The tribunal ultimately found in Mendy’s favour arguing that unless there is an explicit contractual or statutory provision allowing for the nonpayment of wages, such a deduction will be unlawful and no such implicit right on City’s part existed. However, they were entitled to withhold the wages Mendy would have earned whilst in custody.
Whilst the exact quantum of what Mendy is owed is yet to be decided upon, it is likely to be the largest amount ever awarded for an unlawful deduction of wages claim the employment tribunal.
Analysis
Employees being suspended from work pending disciplinary procedures is in no way unusual and in almost all instances, the individual concerned is suspended on full pay. Such suspensions are administrative and not sanctions in of themselves. In this case the fact that the suspension was imposed by a regulator (the FA) rather than the employer themselves was immaterial. However, if the reason that the employment contract cannot be performed is attributed to the employee’s own actions (such as being remanded in custody on the basis of past actions), then such deductions may be allowed.
Employers would be wise to check the terms of their own employees’ contracts concerning whether they would be permitted to withhold wages during suspensions, especially if imposed by an external regulator.
The judge in this case stated that such deductions require an explicit provision to make them lawful. In the absence of statutory provisions, future proofing through the reviewing of employment contracts would be a wise safeguard.
