A law firm acted unlawfully when it deducted training costs from an employee’s wages when she was sacked, an employment tribunal has ruled.

S Shah was an office manager at north west firm Seth Law Ltd when she was dismissed for making a comment about a client within earshot of members of the public at lunchtime.

When she was dismissed the firm, which specialises in road traffic accidents, deducted £1,700 from her salary to cover a Chartered Institute of Personnel Development course in HR which Shah had opted to undertake after her promotion from fee earner to office manager in 2018. The firm had agreed to pay for the course in monthly instalments and increase Shah’s salary to £19,000.

Shah argued that the firm had no contractual right to make a deduction from her wages as she had never received a contract and had never seen a letter stating that her training costs would be deducted if she ceased employment. The firm said she had received both the contract and the letter.

Employment Judge Feeney, sitting in Manchester, said that the letter which the firm purportedly gave to Shah was ‘extremely important’ because ‘while [the contract] would allow recoupment of training costs where they were “owed to the employer”, until the claimant left there would be no question whatsoever of owing the employer the training costs: the training costs had been willingly paid by the respondent in order to develop the claimant.

‘Accordingly, that clause by itself only enabled the respondent to recoup the money if the claimant owed it to them. She only owed it to them if... she ceased employment during the training course or within 12 months of completing the training course.’

The judge concluded that while Ms Shah had not been ‘entirely truthful’ about her personal contract he could not accept that the letter was given to her on the date the firm claimed.'

He ordered Seth Law Ltd to pay Shah £1,700.