Case No. 10/94
THE EMPLOYMENT TRIBUNAL
BETWEEN:
Applicant:
Respondent:
Ean James Cannell
Peel Motor Body Ltd
DECISION OF THE EMPLOYMENT TRIBUNAL
HELD AT:
Douglas
ON: 7'h February 2011
CHAIRMAN:
Mr Robert Quayle
MEMBERS:
Ms Kim Corlett
Mr David Watts
REPRESENTATION
The Claimant was not represented. Bye-mail and over the telephone he had intimated to the
Tribunals Office that he did not intend to attend the Hearing and requested the Tribunal to
consider his Claim on the basis of the written submissions he had made.
The Respondent was represented by Mr and Mrs Herbert Budd, directors of the Respondent
Company.
DECISION
The Tribunal's unanimous decision is that the Claimant was not unfairly dismissed. The Tribunal
further decided that the Claimant had suffered unlawful deductions from wages in the form of
unpaid holiday pay and awarded the Claimant the sum of £106.25.
EVIDENCE
1.
The Claimant submitted his claim on 5th November 2010 claiming unlawful deduction
from pay & constructive dismissal. The claim was set out in detail in an attached
memorandum. In summary the Claimant argued that the Respondent's continued
failure to pay his monthly salary on a regular basis left him with no alternative but to
leave; the unlawful deduction related to the salary owed but unpaid on his departure
& accrued holiday pay.
2.
The Respondent made Response on 15"' November 2010 denying the claim.
3.
Although the Claimant resigned his employment, he claims he did so in circumstances
such that entitled him to terminate his employment by reason of the Respondent's
conduct. The Claimant therefore claims that his resignation amounts to dismissal by
the Respondent by virtue of Section 112(2)(c) of the Employment Act 2006 ('the Act')
commonly known as 'constructive dismissal'. If the Claimant could succeed in
establishing that he was constructively dismissed, in the absence of the Respondent
being able to establish that the dismissal was none the less fair, such dismissal would
constitute unfair dismissal within the meaning of Section 111 of the Act.
4.
The Claimant declined to attend the hearing & indicated that he was content for the
Tribunal to determine his claim on the basis of the various letters & memoranda he
had submitted in support of his claim. It was pOinted out to the Claimant that his
non-attendance, particularly if the Respondent was represented, might prejudice his
claim in that any evidence submitted by him would not be sworn, nor would it be
capable of being tested by cross examination. Notwithstanding this advice, the
Claimant maintained his refusal to attend.
5.
The Tribunal has found difficulty in fully understanding the claim put forward by the
Claimant not least because of the conflicts between the eVidence submitted by the
Claimant in writing, & the written material substantiated by oral evidence given under
oath on behalf of the Respondent. Inevitably the Tribunal has had little choice but to
attach greater weight to the version of events given on behalf of the Respondent
since it was not questioned in any way other than by the members of the Tribunal.
THE CASE FOR THE CLAIMANT
6.
The Claimant, in his written submissions, stated that he had worked for the
Respondent (a firm specializing in car body repairs) for seven years. This constituted
a second period of employment, the first having ended some time before. There was
no suggestion that the two periods constituted continuous employment. The Claimant
averred that he had never been provided with a statement of terms of employment
for the second period, or, in recent months, with itemised pay slips. Thus he claimed
he did not know exactly how his pay was worked out or indeed what his annual
salary was, although he received £1467.67 per month net after deductions.
7.
During the last 12 months of employment, the Claimant claimed that his monthly pay
date, which was normally the 18th day of the month, had become increasingly
irregular. Initially he had been advised if the payment date was going to be delayed,
with an explanation, but more recently there had been no explanation or warning. He
had always been paid, but it was often late. For example his salary for September
2010 was only paid at the end of that month.
8.
The Claimant explained that, in recent months, he had been the sole employee of the
Respondent although Mr Herbert Budd, a director of the Respondent, had routinely
attended the premises and dealt with all paperwork. However the Claimant claimed
to have become aware that the Respondent's business was experiencing financial
difficulties, along with the whole car body repair industry, which perhaps explained
the late payment of salaries. He also alleged that Mr Budd & his wife had withdrawn
money from the business despite his not being paid his monthly salary on time.
9.
In mid-October 2010, Mr Budd had been away for a per'lod which included the normal
pay date. No pay cheque had been left for him nor had one been offered on Mr
Budd's return. Because of this, and the increasing uncertainty over when he would be
paid, the Claimant, conscious of his family obligations, believed he had no choice but
to resign to seek alternative employment and did so, without notice, on Wednesday
27" October 2010. He left a letter for Mr Budd explaining his departure & requesting
that his outstanding remuneration & relevant tax forms should be provided. He had
consciously avoided meeting Mr Budd (& subsequently declined requests for a
meeting) as he believed such a meeting would lead to confrontation.
10.
The Claimant submitted further evidence by undated letter written in response to the
Respondent's denial of liability, & a further letter dated 23'd January 2011 countering
various points made by the Respondents. In those written submissions he makes or
confirms the following points:a. he had never received a statement of terms of employment for his period of
employment commencing in 2003, although he concedes he had one for the
earlier period of employment
b. he had not received pay slips for a couple of years and was not sure how
much he was earning
c. he did not believe a cheque for his October salary had been left in the office,
as averred by Mr Budd, and cited a conversation (supported by a letter) with
a temporary office worker who provided cover when Mr Budd was away, who
had confirmed that no pay cheque had been left for collection. He also
confirmed having looked at the company cheque book & there had been no
cheque made out to him in it.
d. an allegation from the Respondent concerning the loss of a significant
insurance repair job due to the Claimant's departure was contested.
11.
Various other points were made but these related to matters such as other former
employees, sick pay, conversations between Mr Budd and the Claimant's mother
from whom he is estranged, & peripheral matters raised by Mr Budd which appear to
bear little relevance to the Claim.
12.
Despite the disagreements with Mr Budd over the written evidence & submissions,
the Claimant stated that he had found Mr Budd a good employer, "one of the best
he had ever worked for" - but suspected Mr Budd had wanted him to leave so that
the business could be closed down.
THE CASE FOR THE RESPONDENT
13.
Mr & Mrs Budd, directors of the Respondent, gave eVidence, under oath, in support
of the submissions made by them both orally and in writing to the Tribunal.
14.
Mr Budd denied the Claimant's claim that he had not been given a statement of
terms of employment and produced an unsigned copy, the other copy allegedly
having been given to the Claimant. He acknowledged that his copy was not signed
by the Claimant but non-signature by employees was not unusual. Some positively
declined to sign, others just did not.
15.
Mr Budd also denied the allegation that the Claimant had not been given pay slips
for the past two years although he conceded that he had not provided pay slips
since April of 2010, but only at the specific suggestion of the Claimant. He was given
an annual summary of his pay and the tax deducted. A copy dated w.e.f 06.04.10
was produced showing that the Claimant's gross monthly pay was £1700.
16.
The Respondents conceded that the Claimant's normal pay date of 18 th of the month
had been missed on a very few occasions, but not as regularly as alleged by the
Claimant & always with the knowledge and consent of the Claimant usually because
of temporary cash flow problems. Mr Budd had not been aware that the Claimant
was unhappy about the situation as the matter had never been raised. Indeed
during a conversation only 2 days before the Claimant resigned, there had been no
mention of any dissatisfaction, let alone any hint of resignation.
17.
In October, Mr Budd had been away from the Island from 13 th to 19th October & on
his return had a backlog of paper work to dear which led to his overlooking the
outstanding pay date. He was in the office on a daily basis, in contact with the
Claimant on his return & before the Claimant's resignation, but there had been no
mention of late or overdue payments, or of any dissatisfaction. On the day of the
Claimant's resignation, the salary cheque had actually been made out & was in the
office awaiting collection.
18.
The Claimant's resignation was a complete surprise - & Mr Budd still did not really
understand what had prompted it. He had attempted to contact the Claimant both
directly and through his mother to resolve matters - but it appeared that the
Claimant did not wish to have any contact.
19.
The business had originally had more employees, but through contraction of the
work & departure of staff, the Claimant became the sole employee. Mr Budd averred
that he had only kept the business going to give employment to the Claimant whom
he had become to regard almost as a son. He went into the office each morning to
deal with administrative & financial matters, always having a conversation with the
Claimant on the progress of work, but everything else was left to the Claimant
induding the estimating for each job, determining what parts would be needed and
the actual repair work. He had come to recognize that the Claimant liked to do
things his own way & had a few 'blank spots' in relation to certain customers which
led to some work being turned away. Mr Budd had sought to accommodate the
Claimant's whims, and recognized that, as sole employee, the business had to be
organized to suit his particular way of dOing things. Indeed he had offered the
business to the Claimant, an offer which was declined.
20.
Mr Budd did not take a salary from the business but his Wife received a modest
payment for book keeping & typing duties.
21.
With regard to the claim for unlawful deductions, he had sent to the Claimant the
cheque for the outstanding October salary which had eventually been cashed. He did
not contest that some holiday pay might be due - he had thought about paying, ex
gratia, a full month's holiday pay, but he and his wife had second thoughts as the
Claimant had given no notice of his departure. He thought that the Claimant had
taken most of his annual holiday entitlement to date, but if he had not resigned he
would have been entitled to some holiday at Christmas, and also a bonus which he
had now obviously foregone.
22.
In conclusion Mr & Mrs Budd expressed their surprise at the Claimant's departure he had been a good & trusted employee - & their regret that he had not felt able to
explain why he had left. The Respondent had been forced to turn away a specific
repair job for which parts had been ordered by the Claimant just before his
resignation, as there are now no staff to do the work. In fact he has closed the
business. The fact that the Claimant had priced up this last job and given a parts
order only days before he left increased the Respondent's suspicion that the
resignation was not premeditated or as a result of any longstanding grievance.
THE LAW
23.
The law on constructive dismissal has been set out in the case of O'Sullivan v Mees
Pierson Intertrust Limited (Case no. 633). However for the sake of completeness it is
reiterated here.
24.
Construct'lve dismissal arises in terms of section 112(2)(c) of the Act (previously s 42
of the Employment Act 2001) which states that an employee shall be treated as
dismissed by his employer if the employee terminates the contract with or without
notice in circumstances such that he is entitled to terminate it without notice by
reason of the employer's conduct. This is for the Claimant to prove and, to do so, he
must establish to the satisfaction of the Tribunal that the conduct in consequence of
which he terminates his Contract of Employment amounted to a fundamental breach
of that contract on the part of the Respondent.
25.
The UK leading case on the matter (which the Tribunal can refer to as persuasive
authority) is that of Western Excavating (EEC) Ltd. v Sharp 1978. Essentially this
case states that the requirements for success in a claim for constructive dismissal
includes proof of a fundamental breach of the contract on the part of the employer
and that it was that breach that caused the employee to reSign. Furthermore the
breach must be sufficiently important to justify the resignation or it must be the last
in a series of incidents which justify the reSignation ("the final straw"). This case also
indicated that it is not enough for an employee to reSign merely because the
employer has acted unreasonably.
26.
It is necessary for a Tribunal to view objectively whether the conduct complained of
is likely to destroy or seriously damage the trust and confidence. It is not necessary
to show that the employer intended the breach. The Tribunal must look at the
employer's conduct as a whole and determine whether it is such that its effect,
judged reasonably, is such that en employee cannot be eXpected to put up with it
(Malik & Anor v Bank of Credit and Commerce International SA 1997 1RLR 462,)
FINDINGS OF FACT
27,
The Claimant's case in this matter here appears to be that the breach of contract on
the part of the Respondent was the breakdown in the relationship of trust and
confidence that he should have enjoyed through routine late payment of his salary
and the failure to provide pay slips,
28,
As stated earlier, the Tribunal has experienced some diffi culty in determining where
the truth lay in certain areas where the evidence diverged. Not having the Claimant
present to give evidence obviously hampered any objective assessment of what
actually happened, Both Mr and Mrs Budd appeared to be persuasive witnesses and
the Tribunal could see no reason why their evidence should be dis-believed or
discounted, The Tribunal has no reason to disbelieve the Claimant's evidence either,
but where it diverges from the Respondent's, the Tribunal has little choice but to
accept the Respondent's version.
29,
Accordingly the Tribunal makes the following findings of fact:(a) The Claimant was offered a statement of terms and conditions of
employment in 2003 when the current period of employment commenced,
(b) The Claimant was not given itemised pay slips from April 2010 but he had
either not objected or had actively encouraged non-provision,
(cl In a small business with only one employee, and particularly where that
employee is effectively running the business, it is not unusual that certain
routine matters were not rigorously observed. That is undoubtedly bad
practice, and in the case of pay slips is not in accordance with the legal
requirement, but in the particular situation of a one employee buSiness,
where administration is cut to a minimum and is on a fairly minimal basis, not
wholly surprising.
(d) The non provision of itemised pay slips was either at the Claimant's
suggestion or was accepted by him without demur. Such non-provision, in
any event, was only of relatively short duration.
(e) Whilst the Claimant was justified in feeling aggrieved that his salary was not
paid on the due date as a matter of course, he does not appear to have
communicated that dis-satisfaction to the Respondents, at least in such a way
that the Respondents were aware of any dis-satisfaction
(f) In October 2010, the Claimant's monthly pay was delayed without
explanation, However the Claimant made no representations to the
Respondents concerning such late payment even though the temporary office
worker may have been aware of some unease over the delay
(g) Mr Budd had returned from his trip away and was back in the office for
several days before the Claimant left but there appears to have been no
mention of the late payment, no request for payment nor any intimation
given that the Claimant would leave if payment was not made.
(h) Although the delays in paying the monthly salary may have been frustrating
to the Claimant and poor practice on behalf of the Respondent, the Tribunal
is not convinced by the evidence that the delay in payment of the October
salary was, of itself, the "final straw" prompting the Claimant's resignation.
THE DECISION
3~.
The Tribunal has had to consider whether the only areas of dis-satisfaction described
by the Claimant were sufficiently fundamental to warrant his departure without
notice from the Respondent's employment, and that it was those matters that were
the actual cause of the departure, thereby fulfilling the tests set in the relevant case
law on the subject.
31.
Even if occasional delays in payment of monthly wages were sufficiently
fundamental to warrant a break down in the implied contract of mutual trust and
confidence between employer and employee, the Tribunal could find no evidence
that the Claimant had made the Respondent aware of any feelings of dissatisfaction, or indeed that there had been any significant dis-satisfaction. Moreover,
during the final month's employment and particularly just before employment
terminated, the Claimant appears to have said nothing to Mr and Mrs Budd of the
Respondent, hence their surprise at his sudden departure. The evidence suggests
the Claimant made his feelings known about customers for whom he would not do
work - and the Respondents accepted his position even if they disagreed or felt
embarrassment. However that does not suggest he would have felt any diffidence
about mentioning other areas of concern, such as delayed pay dates. The
reasonableness or otherwise of the employer's behaviour is not, of itself, sufficient to
justify a finding of constructive dismissal.
32.
It is difficult to see how relatively short delays in paying monthly salaries (it being
acknowledged that salaries were always paid each month even if late) could prove
sufficiently fundamental to the relationship of trust implied in an employment
contract to represent a repudiatory breach of contract. The fact that the Claimant
does not appear to have complained or taken other action in a business he was
virtually running himself, suggests that it was not as significant an issue as it
appears to have become in retrospect. Moreover the final month's delay could hardly
be described as "the last straw" if the Claimant does not appear to have been overly
concerned at the practice in previous months. The Claimant appears not to have
mentioned the delay to Mr Budd and then to have reSigned on the basis of an
alleged breach which had not been raised with the employer.
33.
Because, in the Tribunal's judgement on the basis of the facts, the alleged breach,
whether a progression of breaches or a final culmination in a series of breaches, was
not suffiCiently fundamental to be repudiatory, and because the Tribunal is not
convinced that the late payment in the final month was, in fact, the last straw, the
Tribunal does not feel it necessary to conSider in detail any other issues which would
have to be present to sustain a finding of constructive dismissal, it being necessary
for all elements to combine to justify such a finding.
34.
The Tribunal finds that the Claimant was not constructively dismissed but left of his
own volition without giving his employer the contractual Period of notice specified in
his statement of terms and conditions. There was, therefore, no unfair dismissal.
35.
Because the Claimant was not present, the Tribunal did not have the opportunity to
ask if he would wish to be reinstated or re-engaged were there to be a finding of
unfair dismissal. In the light of the Tribunal's findings, the matter is not relevant.
THE UNLAWFUL DEDUCTIONS CLAIM
36.
Any payments to which the Claimant was contractually due but which had not been
paid, would represent an unlawful deduction of pay under Section 21 of the Act.
37.
According to the evidence given by the Respondent, the Claimant appears to have
cashed the cheque sent to him for his last month's salary despite initially declining to
accept it. There appears, therefore, to be no outstanding payments due to the
Claimant, other than any accrued holiday pay.
38.
According to the evidence given by the Respondent, although consideration was
given to the making of an ex gratia payment of one month's holiday pay, the
Claimant had, in fact, taken a substantial proportion of his annual holiday
entitlement already during the year. That entitlement was, according to his
statement of terms of employment, 20 working days per annum, the basic minimum
required under the Annual Leave Regulations 2007.
39.
The calculation of pay in lieu of holiday not taken, is made according to a formula
set out in Regulation 7 of the Annual Leave Regulations 2007 and is (4 x A) - B
where A is the proportion of the holiday year which had expired before the effective
date of termination, and B is the period of holiday taken between the start of the
leave year and the date of termination.
40.
In this case, the Claimant's holiday year was from 8th January (the anniversary of his
commencement date) and, according to the evidence which has not been
contradicted by any evidence given by the Claimant, 3 weeks holiday had been
taken. The effective date of termination was at the end of the 43"' week of the year.
Thus the calculation is (4 x 42/52) - 3.
41.
The Claimant is therefore entitled to receive one quarter of a week's salary as unpaid
holiday pay. On the basis of monthly gross earnings of £1700 and a 48 working
week year, the weekly salary was £425. One quarter of a week's pay would
therefore be £106.25 and the Tribunal awards that amount to the Claimant.
42.
Under Section 2S(4)(c) of the Act, in the case of a complaint of unlawful deductions,
the Tribunal may, if it considers it just and equitable, order a further payment of up
to four weeks' pay to the employee. In the circumstances of the Claim, the Tribunal
does not consider it fair and reasonable to order any further payment.
Sigc,d
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Mr R.B.M. Quayle - Chairperson
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Clerk to the Tribunal:
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