Contractors, don’t do a Rankin and forget to put your timesheets in on time

Eagle-eyed ContractorUK readers may have noticed that I introduced four unlawful wage deduction cases against umbrella companies last week, when there’s actually a fifth – Mr J Rankin V Giant Professional Ltd, writes Rebecca Seeley Harris of ReLegal Consulting Ltd.

There’s good reason to distinguish it from the cases of Binns, Zajota, Pajpani and Collins but Rankin is still a very important case for contractors to know about, and not forget unlike the claimant, who did forget.

The Rankin case: introduction

Before I get to that issue, keep in mind that the claimant Rankin, a contractor, provided his services quite standardly through an umbrella company, Giant Professional, to the end-client. And in the normal course of this normal set-up, Rankin would have expected to be paid by Giant for the hours worked while engaged in work on the customer’s behalf. 

It was a term of Rankin's contract, however, that he submit his timesheets to Giant, its client (“Oscar Associates”) and the end-user (“WWT”, Oscar Associates’ customer), and for this submissin to be in ‘a timely manner’ -- “weekly at least.” 

The timesheets were the only record of work done and due to the fact that the engagement largely involved remote working, it was essential that the end-client see and approve the timesheets promptly.

Contractual duty; timesheets and the right to be paid

Unfortunately, Mr Rankin did not fulfil his contractual duty to submit the timesheets promptly, and only did so after the client gave two weeks’ notice to terminate the assignment.  By this time, explains the judgment, Mr Rankin had been locked out of the client’s system.

Further irritatingly for the claimaint, the timesheets he did submit successfully to Giant did not establish a right to be paid wages for the period in question. This right only starts with the end-client’s confirmation that the work was done but this confirmation was not provided.

From  a legislative standpoint, a claim for unlawful deduction of wages is a specific statutory provision in section 13 of the Employment Rights Act 1996. 

What are deductions defined as, in law?

Section 13 (3) defines “‘deductions” as being the difference between the amount of wages paid to a worker (here, nil) and the amount of wages “properly payable” on that occasion. 

The statutory right is to protect the worker from the employer making deductions from their wages without consent.

Another unlawful deduction might be, as seen in other recent cases, for holiday pay or employer’s national insurance contributions.

What wages were properly payable?

So the crux of the question for the tribunal hearing Rankin’s claim was what wages were “properly payable”, and this in turn is a contractual question. But problematicaly for his claim, the right to be paid under the contract had been breached by Rankin himself , and it was the only way that the parties could verify the amount of work done.

Without that evidence, there was no basis on which to say that wages were properly payable to the claimant for the assignment. The tribunal held, therefore, that there was no unlawful deduction on this occasion.

Finally, here's some steps to take to avoid following Rankin's example

Therefore, Rankin V Giant is quite a different case to the quartet mentioned at the outset, and not only because it was dismissed but because of why it was dissmissed; in effect, the contractor forgot to put his timesheets in on time.

When in doubt about your timesheet submission time -- and it may well be “promplty” or “weekly at least”, ask your umbrella, check your contract or have a legal professional check it for you.

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Written by Rebecca Seeley Harris

Rebecca is a leading expert in employment status, IR35 and the law involving independent contractors and the self-employed for the purposes of tax and employment law. Rebecca has run her own consultancy for the past 20 years covering all employment status issues such as off-payroll in the private and public sector, otherwise known as IR35, s.44 and any issues affecting the self-employed and personal service companies.
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