Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:  85/09

 

 

CLAIMANT:                      Edjta Vaiksnoraite

 

 

RESPONDENT:                Barrhan Limited

 

 

DECISION

 

The tribunal makes a declaration that during the period 1 October 2008 until the claimant resigned on 5 May 2009, save for the weeks ending 5 September 2008, 9 January 2009 and 16 January 2009, the respondent did not provide her with itemised pay statements in conformity with the requirements of Article 40 of the Employment Rights (Northern Ireland) Order 1996.

 

 

Constitution of Tribunal:

 

Chairman (Sitting Alone): Mr Wimpress

 

 

Appearances:

 

The claimant appeared in person and represented herself

 

The respondent did not appear and was not represented

 

 

 

The Claim and the Response

 

1.       The claimant brought proceedings against the respondent in respect of the respondent's failure to provide her with an itemised pay statement and to pay her the national minimum wage.  The claim form was dated 26 November 2008 and it was received in the tribunal office on 5 December 2008.  The respondent’s response to the claim was rejected at the pre-acceptance stage because it was lodged out of time and the respondent did not appear at the hearing.  However, it appeared to the tribunal on hearing this matter that the proper title of the respondent was Barrhan Limited rather than Michael Hanley and the title of the proceedings was amended accordingly.

 

 

 

 

 

 

Sources of Evidence

 

2.       The tribunal heard evidence from the claimant and received copies of a number of documents from her. 

 

          The claimant is Lithuanian by birth and speaks little English.  Her evidence was translated by an interpreter, Mr Vytavlas Uzvalakas.  The tribunal is grateful to Mr Uzvalakas for his assistance.

 

The Issues

 

3.       The claimant brought proceedings against the respondent in respect of the respondent's failure to provide her with an itemised pay statement and to pay her the national minimum wage. 

 

The Facts

 

4.       The Donn Carragh Hotel trades under the name of Barrhan Limited and Mr Hanley is the proprietor and the person for whom the claimant worked.  The claimant initially worked for the respondent in a trainee capacity having been placed in the post by the Job Centre in 2007.  She became employed by the respondent as a dessert chef in October/November 2008.  She did not receive a contract of employment or written particulars of employment. 

 

5.       In her claim form the claimant stated that she worked 18 hours per week and that her average take home pay was £85.00 per week.  This equates to an hourly rate of £4.72.  In her evidence to the tribunal the claimant said that she was paid £4.70 per hour and that her hours of work varied between 16, 18 and 22 hours per week usually spread over 3 days.  On the basis of the claimant’s diary entries, it would appear that she occasionally worked longer hours.  The diary records that she worked for 24.5 hours during one week in November 2008 and 24 hours in a week in February 2009.  The claimant also worked for 34 hours during a week in September 2008 while she was still a trainee. In April 2009 the claimant reduced her hours to 12 hours per day due to ill health.   The claimant’s evidence was that some weeks she was paid the minimum wage and some weeks she was not.  The claimant kept a written record of the hours that she worked in the form of a diary.  The claimant was paid weekly.  She was paid in cash and received her wages in a small brown envelope which was clearly designed for such payments in that it contained spaces where gross pay, net pay and other details could be filled in but nothing was inserted.  The sample brown envelope retained by the claimant merely gave her first name and the week in question which was 13 April. 

 

6.       The claimant was also able to produce three wage slips which were the only ones that she received throughout her training and employment by the respondent.  The relevant details were as follows:

 

 

 

          Week 22  05/09/08       Total Gross Pay  £115.15   Net Pay  £112.00

          Week 40  09/01/09       Total Gross Pay  £121.21   Net Pay  £116.00

          Week 41  16/01/09       Total Gross Pay  £121.21   Net Pay  £116.00

 

          Although these wage slips appear to be properly made up and had appropriate deductions for income tax and national insurance, the claimant disputed their accuracy and said that she was paid £2.00 or £3.00 more than the net figure given.   The claimant stated that she had been told by the Job Centre that her employer was probably not paying tax.  It is not easy to reconcile the figures given in the pay slips with the claimant’s diary entries but it would appear from the relevant diary entry that in week 40 she worked for 20 hours and was paid £116.00 at £5.80 per hour net.

 

7.       The claimant resigned from her job on 5 May 2009 due to her ongoing health problems.  The respondent did not provide the claimant with either a P45 or a P60 despite numerous requests.  The matter was also the subject of an investigation by the HM Revenue and Customs National Minimum Wage Compliance unit.  The claimant provided the tribunal with copies of correspondence between the National Minimum Wage Compliance unit and the claimant and the respondent.  The investigation was still underway in February 2009 but the claimant was unable to inform the tribunal of the outcome. 

 

The Law

 

8.       Article 40 (1) of the Employment Rights (Northern Ireland) Order 1996 provides that an employee has the right to be given by his employer ‘a written itemised pay statement’.

 

          Article 40 (2) states:

 

“The statement shall contain particulars of -

 

(a)            the gross amount of the wages or salary,

 

(b)            the amounts of any variable, and …fixed deductions from that gross amount and the purposes for which they are made,

 

(c)             the net amount of wages or salary payable…

 

          Article 43 of the Order deals with enforcement which may be by reference to an Industrial Tribunal which may, under Article 44(2) confirm, amend or substitute proper particulars in place of the purported particulars given by the employer. The tribunal’s statement shall be deemed to have been given by the employer to the employee.  The tribunal may also make a declaration under Article 44 (3) (a) that the employer has failed to give the employee any pay statement in accordance with Article 40. 

 

Section 1 of the National Minimum Wage Act 1998 (“the 1998 Act”) provides for a person who qualifies under the Act to be paid not less than the national minimum wage.  Section 2 of the 1998 Act makes provision for the Secretary of State to make regulations for determining the hourly rate at which a person should be remunerated by his employer in respect of his work in any pay reference period.  The rate from 1 October 2007 is £5.52 per hour for an adult and from 1 October 2008 it went up to £5.73 per hour.

 

Section 17 of the 1998 Act makes provision for enforcement.

 

“17(1)      If a worker who qualifies for the national minimum wage is remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage, the worker shall be taken to be entitled under his contract to be paid, as additional remuneration in respect of that period, the amount described in subsection (2) below:-

(2)      That amount is the difference between—

(a)      the relevant remuneration received by the worker for the pay reference period; and

(b)      the relevant remuneration which the worker would have received for that period had he been remunerated by the employer at a rate equal to the national minimum wage.

(3)      In subsection (2) above, “relevant remuneration” means remuneration which falls to be brought into account for the purposes of regulations under section 2 above.

 

          Section 28 of the 1998 Act is also relevant and provides as follows:

 

         28 (2)      Where—

(a)      a complaint is made—

(ii)      to an industrial tribunal under Article 55(1)(a) of the Employment Rights (Northern Ireland) Order 1996, and

(b)      the complaint relates in whole or in part to the deduction of the amount described as additional remuneration in section 17(1) above,

                                   it shall be presumed for the purposes of the complaint, so far as relating to the deduction of that amount, that the worker in question was remunerated at a rate less than the national minimum wage unless the contrary is established.

 

          Article 45 of the Employment Rights (Northern Ireland) Order 1996 (‘the 1996 Order’) makes provision in respect of unlawful deductions as follows:

 

          “45 (1)     An employer shall not make a deduction from wages of a worker employed by him unless—

 

(a)      the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or

 

(b)      the worker has previously signified in writing his agreement or consent to the making of the deduction.

 

(3)            Where the total amount of wages paid on any occasion by an

employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.”

 

          Article 55 of the 1996 Order sets out the procedure for making complaints in respect of unlawful deductions as follows:

 

          “55 (1)     A worker may present a complaint to an industrial tribunal—

 

(a)      that his employer has made a deduction from his wages in contravention of Article 45 (including a deduction made in contravention of that Article as it applies by virtue of Article 50( 2)),

 

(2)      Subject to paragraph (4), an industrial tribunal shall not consider a complaint under this Article unless it is presented before the end of the period of three months beginning with—

 

(a)      in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made,…

 

(3)   Where a complaint is brought under this Article in respect of ——

 

(a)      a series of deductions or payments…

 

the references in paragraph (2) to the deduction or payment are to the last deduction or payment in the series or to the last of the payments so received.

 

(4)   Where the industrial tribunal is satisfied that it was not reasonably practicable for a complaint under this Article to be presented before the end of the relevant period of three months, the tribunal may consider the complaint if it is presented within such further period as the tribunal considers reasonable.

 

While there has been some debate as to the appropriate means of enforcing national minimum wage claims in tribunals, I am satisfied on the basis of the legislative provisions above and the decision of the Employment Appeal Tribunal in the case of Blackford Farms Ltd v Mulqueeney [2007] EAT that it can be brought either as claim for unlawful deduction of wages or breach of contract.

 

Conclusions

 

9.       It would have been helpful to the tribunal in adjudicating on the question of whether the claimant was paid the national minimum wage to have had the benefit of a detailed schedule of loss.  While the wage slips and diary entries provided some sort of framework it was less than ideal but the tribunal has done its best to understand the case on the basis of this material.

 

10.     The national minimum wage is based on gross pay.  The relevant pay reference period is one week.  I have carefully examined the claimant's diary entries and the three pay slips that were provided to her.  According to her own records the claimant worked for 1020.5 hours during the 2008/2009 tax year.  If one extrapolates from the figures given in the week 41 payslip for 2008/2009 (which I assume to be accurate for present purposes) and add the 196 hours which the claimant, according to her own records, worked between week 41 and week 52 this gives a figure of £1123.08 on the assumption that the claimant was paid at the correct national minimum wage of £5.73 from 1 October 2008.  This would produce a total gross pay figure for the 2008/2009 tax year of £5,846.30. If in turn this figure is divided by the 1020.5 (the hours that the claimant worked during the 2008/2009 tax year) this gives an average hourly rate of £5.73 which is in conformity with the current national minimum wage and in excess of the previous rate of £5.52.  Another approach is to take the claimant’s recorded hours for the 2008/2009 tax year (1020.5 hours) and multiply this by the net hourly rate of pay, £4.70, given by the claimant in her claim form.  This produces a total of £4796.35.  It is then necessary to compare it with the gross pay that the claimant would have received over this period on the basis that she was paid the correct national minimum wage of £5.52 from April 2008 to 1 October 2008 (521.5 hours x £5.52 = £2878.68) and £5.73 from 1 October 2008 until the end of the tax year (505 hours x £5.73 = £2893.65).  If these figures are added together the total gross figure for the 2008/2009 tax year based on the claimant’s recorded hours would be £5772.33.  Given the claimant’s variable hours one would expect the respondent to make small deductions in respect of income tax and national insurance with the possibility of a rebate at the end of the tax year depending upon the final figures.

 

11.     It is reasonably clear from both the entries in the diary and such wage slips as are available that the claimant's pay would have made her liable to both income tax and national insurance deductions.  The total hours worked by the claimant for the 2008/2009 tax year are broadly consistent with the claimant’s pay as given in the pay slips. It would therefore appear that the claimant's gross hourly rate of pay was in excess of the national minimum wage.  This leads me to believe that the claimant's understanding of what constitutes the national minimum wage may be flawed.  The respondent has contributed to this misunderstanding by its failure to provide regular pay slips to the claimant with appropriate deductions being made in respect of income tax and national insurance.  Notwithstanding the presumption contained in section 28(2) of the 1998 Act that the worker in question was remunerated at a rate less than the national minimum wage unless the contrary is established, I cannot be satisfied on the basis of the evidence before me that the claimant was paid at a rate less than the national minimum wage.

 

12.     It is clear however that the respondent did not provide the claimant with itemised pay statements on a regular basis.  The tribunal therefore makes a declaration that during the period 1 October 2008 until the claimant resigned on 5 May 2009, save for the weeks ending 5 September 2008, 9 January 2009 and 16 January 2009, the respondent did not provide her with itemised pay statements in conformity with the requirements of Article 40 of the Employment Rights (Northern Ireland) Order 1996.  As I am not satisfied that the claimant was paid at less than the national minimum wage no monetary compensation is payable.

 

 

 

Chairman:

 

 

Date and place of hearing:         25 August 2009, Enniskillen.

 

 

Date decision recorded in register and issued to parties: