Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

CASE REF: 3128/04

CLAIMANT: Tomi Manderbacka

RESPONDENT: Favourite Chicken & Ribs Restaurant

DECISION

The unanimous decision of the tribunal is that correct name of the respondent is Louis McLoughlin trading as "Favourite Chicken & Ribs Restaurant". The tribunal Orders the respondent to pay to the claimant the sum of £279.36 in costs, inclusive of Value Added Tax.

Constitution of Tribunal:

Chairman Mr J V Leonard

Members Mr J Hall

Mr S Adair

Appearances:

The claimant was represented by Mr Miceal Canavan, Solicitor, of McGuinness & Canavan, Solicitors.

The respondent did not appear and was not represented.

REASONS

1. The tribunal heard from the claimant's representative, Mr Canavan, and examined the documentation placed before the tribunal by Mr Canavan, and also considered the content of the Claimant's Originating Application, the respondent's Notice of Appearance thereto, and correspondence directed to the Office of Tribunals by or on behalf of the respective parties.

THE ISSUE

2. In his Originating Application, the claimant had presented a complaint of, "breach of minimum wage legislation". No immediate Notice of Appearance was entered thereto but solicitors were retained by the respondent which firm then entered into correspondence with the claimant's solicitors. After some correspondence, a sum of money representing in full any wages properly due to the claimant by the respondent was paid by the solicitors retained by the respondent to the claimant's solicitors. A Notice of Appearance was entered to the claim by the respondent's solicitors, which, together with the accompanying letter thereto, made clear that liability on the respondent's part was conceded. As a consequence of this, the

tribunal had to determine the correct name of the respondent. The tribunal, further, had to determine the claimant's representative's application for costs.

THE TRIBUNAL'S FINDINGS

3. On foot of the evidence before it the tribunal made the following findings of fact:-

(a) The claimant commenced this case by way of an Originating Application dated 6 December 2004 and received by the Office of the Industrial Tribunals and the Fair Employment Tribunal ("the Office") on 8 December 2004. In that application the claimant contended that he had been employed by the respondent from 19 November 2004 and had worked for 29.5 hours. He had been paid £103.25 for that work, that being equivalent to a rate of £3.50 per hour; that he had been subject to a breach of the minimum wage regulations.

(b) After the employment had ceased, which was at the conclusion of those 29.5 hours' work, the claimant had approached Messrs McGuinness & Canavan, Solicitors, and he had sought advice. Those solicitors, by letter dated 6 December 2004, wrote to the respondent making a claim on behalf of the claimant for the difference between what wages had actually been received by the claimant and what the claimant contended to be properly due to him if the appropriate level of the National Minimum Wage had been paid.

(c) The respondent did not delay matters, but by letter dated 9 December 2004 replied and in that letter he contended that the claimant had been employed on what was therein described as a "training wage" for two months at the rate of £4.10 per hour. The letter went on to state that the claimant had called to the respondent's business premises at a busy period and his wages had not been prepared. A mistake had been made and a payslip was enclosed with the letter in respect of the claimant's employment together with a cheque for £11.26 being the balance stated to be due to him. If the proper wage had indeed been £4.10 per hour, with that amount of £11.26 being paid, the wages would have been fully discharged. However, as was later conceded by the respondent's solicitors, that was not correct. The foregoing payment of £11.26 was received by the claimant's solicitors on or about 14 December 2004.

(d) By letter dated 7 January 2005, the claimant's solicitors wrote to the respondent requesting payment of the balance of the wages properly due and threatened that a costs application would be made as there was no defence to the claimant's claim. At that stage also the Labour Relations Agency became involved in the matter and discussions apparently took place between the Labour Relations Agency and with solicitors who were at that stage retained on behalf of the respondent, the firm in question being Messrs Desmond J Doherty and Co., Solicitors. These discussions took place around the end of January and into early February 2005.

(e) By letter dated 17 January 2005, Messrs Desmond J Doherty and Co. wrote to the claimant's solicitors informing them that the respondent's solicitors were now in receipt of the balance of monies due to the claimant, being the

sum of £28.57; however those monies were not paid over at that point in time. The tribunal can only surmise that the failure of the part of the respondent's solicitors to release the balance of the wages at that stage, which were clearly conceded as being due to the claimant, relates to the issue of costs that had been raised by the claimant's solicitors. The tribunal speculates (as the only other cause of delay that occurs would be the solicitors awaiting cheque clearance followed by mere inertia in attending to the proper conduct of business) that the respondent's solicitors might have felt it appropriate to withhold immediate payment of the balance of monies due to the claimant pending a concession being made on the part of the claimant's solicitors that no costs would be pursued in the matter.

(f) Nothing material occurred after the letter dated 17 January 2005 until the claimant's solicitors wrote to the respondent's solicitors by letter of 4 March 2005 recording the information earlier received that the respondent's solicitors were in funds and pointing out that they had not dealt with the costs issue that had been raised by the claimant's solicitors. Correspondence was also exchanged between the respective solicitors in or about 22-24 March 2005 but still no monies were paid over and an objection to paying costs was stated on the part of the respondent's solicitors.

(g) In a further letter of 1 April 2005 from the claimant's solicitors to the respondent's solicitors it was pointed out that the balance of monies due still had not been handed over. Then by letter dated 14 April 2005 the respondent's solicitors wrote and transmitted payment of the said sum of £28.57 in full discharge of the wages properly due to the claimant. That letter was received by the claimant's solicitors on 18 April 2005.

(h) A Notice of Appearance had not been entered on behalf of the respondent at that stage by the solicitors acting on the respondent's behalf. Further discussions apparently took place between the respective parties' solicitors, and it was clear that the costs issue remained very much a live issue as far as the claimant's solicitors were concerned. Notwithstanding the rather belated but still full payment of the wages due, a decision was taken by the respondent's solicitors to enter a Notice of Appearance, presumably in order to give those representatives a locus standii before the tribunal in order to argue any costs point. Thus a Notice of Appearance dated 5 April 2005 was lodged with the Office by the respondent's solicitors, under cover of a letter dated 14 April 2005, in which the solicitors applied for an extension of time for the lodging of a Notice of Appearance. The said letter further stated that liability was conceded in the matter. The said Notice and letter clarified that the correct name of the respondent was Louis McLoughlin trading as "Favourite Chicken & Ribs Restaurant".

(i) By a letter dated 25 April 2005 the claimant's solicitors wrote to the respondent's solicitors reciting the history of the matter, insofar as the course of correspondence above-mentioned is concerned, and referring those solicitors to the costs provisions in the tribunal's Rules of Procedure. Details

of costs stated to have been incurred were provided to the respondent's solicitors by means of an itemised fee statement annexed to the letter, which statement provided the dates of various attendances made and work carried out on behalf of the claimant between 2 December 2004 and 25 April 2005. The total stated was £259.67 for professional charges, plus VAT of £45.44, producing a total of £305.11.

(j) A Notice of Hearing dated 3 August 2005 was issued by the Office to the respective parties' representatives indicating that the matter was to be heard at 10.30 am on 7 September 2005 at Londonderry Courthouse.

(k) The tribunal did not need to determine any other findings of fact in regard to the matter in order to make a determination.

THE APPLICABLE LAW

4. The tribunal does not need herein to recite the statutory National Minimum Wage provisions in view of the concessions made on the respondent's part. The only issue in this case is an issue of costs. In this case a copy of the Originating Application was dispatched by the Office to the respondent at such a time as to provide that the Industrial Tribunals Rules of Procedure contained in Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 did not apply in respect of the costs; the applicable Rules of Procedure are those contained in the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2004 and, in particular, Rule 14 contained in Schedule 1 to the said 2004 Regulations. Rule 14 provides that where, in the opinion of the tribunal, a party has in conducting the proceedings acted vexatiously, abusively, disruptively or otherwise unreasonably, the tribunal shall consider making, and if it so decides, may make, an Order containing an award against that party in respect of the costs incurred by the other party. A number of Orders are available to the tribunal in that regard including, where the tribunal thinks fit, an Order that the first party pay to the second party a specified sum in respect of the costs incurred by that second party.

THE TRIBUNAL'S DECISION

5. In consequence of the Notice of Appearance, the tribunal determined that the proper respondent was Louis McLoughlin trading as "Favourite Chicken & Ribs Restaurant".
6. The tribunal considered the facts of the matter. The tribunal heard, in the absence of the respondent who did not appear and who was not represented at hearing, the submission on the part of the claimant's representative, in the course of which that representative referred the tribunal to the course of correspondence and to the other dealings with the respondent and with his solicitors. It was submitted that the respondent had behaved in an unreasonable fashion in the conduct of the proceedings. It was contended that there had been unreasonable conduct right from the outset of the proceedings, that there was no justifiable reason not to pay the full rate of the National Minimum Wage, and that there was no proper justification for the substantial delay in payment of what was properly due by the respondent to the claimant. The claimant's representative contended that in a

typical National Minimum Wage complaint, the amount of money claimed was often quite small. It was submitted that, unless any tribunal hearing such a case were to adopt a pro-active and purposive approach in dealing with such costs applications, any respondent could escape proper liability by intentionally delaying the payment of any monies properly otherwise due and therefore, in practical terms, defeating the expressed purpose of the National Minimum Wage provisions. The tribunal, in the absence of the respondent, was faced with no argument to counter the claimant's representative's submissions.

7. In determining this case, the tribunal considered the course of correspondence and the dealings between the parties, and examined the itemised costs statement which had been prepared by the claimant's representative and which had been sent to the respondent's representative under cover of the said letter of 25 April 2005. It was clear to the tribunal that the claimant had, quite properly, sought legal advice at an early date after his employment had ceased. His solicitors had issued a letter to the respondent dated 6 December 2005 and, contemporaneously with that, the solicitors had lodged the Originating Application with the Office. No letter before action had been dispatched prior to the lodgement of that application. The respondent, it must be fairly stated, had not delayed at all in replying to the said letter of 6 December 2004. Whether this was on account of a genuine misapprehension on his part or not as to the correct legal position regarding the National Minimum Wage, he had immediately dispatched a sum of money in order to reimburse the claimant based on a calculated hourly rate figure of £4.10. Thereafter, and the tribunal is not clear precisely as to when this occurred, the respondent sought legal advice. He must have thus received advice correcting any possible misapprehension on his part as to the proper statutory wage rate applicable to his employment of the claimant. He then appears to have put his solicitors in funds in respect of the balance of £28.57 payable to the claimant. That fact was confirmed by the said letter of 17 January 2005 from the respondent's solicitors to the claimant's.
8. Examining the period prior to 17 January 2005, the tribunal had some difficulty in seeing how the conduct of the respondent was unreasonable to such a degree that costs ought properly to be awarded in respect of any costs incurred by the claimant for the period from 2 December 2004 up to the end of December 2004. The respondent might well have been under a genuine but mistaken misapprehension as to the application of the National Minimum Wage Regulations, as borne out by the content of his said letter dated 9 December 2004. There was a credible reason therein set out for the balance stated as believed by the respondent to be due not being paid before that date; the response was quite prompt and was not delayed. The tribunal feels that it would be fair and reasonable to give the respondent the benefit of any doubt concerning this possible and perhaps quite genuine misapprehension as to the legal position.
9. What is however clear to the tribunal is that, having apparently subsequently received the benefit of proper legal advice, if not before, at latest by 17 January 2005, the respondent knew precisely where he stood and that a balance of £28.57 was properly due by him to the claimant. Quite properly, he put his legal advisers into funds to that amount. In the absence of any evidence, the tribunal does not speculate about such issues as the means of payment employed to put those solicitors into funds and cheque clearance times resulting in delays. The tribunal believes that it would be improbable that the respondent's solicitors would have written to state that they were in funds unless they were otherwise in a position to make an immediate payment. Thus the capacity to pay on the part of the respondent's solicitors existed, if not from an earlier date, at latest from 17 January 2005 onwards. The tribunal is not concerned with the responsibility for the delay thereafter and whether it falls at the door of the legal advisers or of the respondent. It is noted that this case is being dealt with under the 2004 Rules of Procedure and the tribunal has not heard any evidence or submissions in respect of that issue. The tribunal therefore takes the view that from 17 January 2005 onwards there was no proper justification whatsoever for the failure to pay over the said balance of £28.57 which was due to the claimant, and the fact that the solicitors were put in

funds for that amount and that this money was, after some delay, indeed paid over on 14 April 2005 is a concession of that fact.

10. The tribunal examined the itemised statement of costs as presented by the claimant's solicitors to the respondent's solicitors. Disregarding that part relating to December 2004, and taking regard of those items only therein set out as relating to the months of January - April 2005, the costs itemised therein come to a figure of £137.75. Adding the stated Value Added Tax to that at £24.11, the total is £161.86. The claimant's representative submitted that his costs for the day's hearing would be £100.00, plus Value Added Tax being £17.50, a total of £117.50 for the day. The total for these two figures comes to £279.36, inclusive of Value Added Tax. The tribunal is of the view that the claimant took a reasonable course of action in retaining solicitors to advise him and in endeavouring to recover the wages properly due to him by having those solicitors issue proceedings, enter into correspondence, and appear before the tribunal. The level of fees incurred is likewise reasonable and fair in the tribunal's view, and such fees have been necessarily incurred in the matter.
11. Taking everything into consideration, the tribunal, on foot of Rule 14 contained in Schedule 1 to the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2004, determines that the conduct of the respondent has been unreasonable. The tribunal Orders the respondent to pay to the claimant the sum of £279.36 in costs, inclusive of Value Added Tax. No other Order or determination is made in this case.

Chairman:

Date and place of hearing: 7 September 2005, Londonderry.

Date decision recorded in register and issued to parties: