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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Allan v Freespirit Hair and Beauty Sal... [2010] NIIT 06126_09IT (27 January 2010)
URL: http://www.bailii.org/nie/cases/NIIT/2010/06126_09IT.html
Cite as: [2010] NIIT 6126_9IT, [2010] NIIT 06126_09IT
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THE INDUSTRIAL TRIBUNALS
CASE REFS: 6158/09
6126/09
6935/09
6934/09
CLAIMANTS: 1. Mark Getty
2. Ricky Allan
RESPONDENT: Freespirit Hair and Beauty Salon Limited
DECISION
The unanimous decision of the tribunal is as follows:
(1) The respective claims of the claimants Mr Getty and Mr Allan are consolidated.
(2) The correct respondent in the case is Freespirit Hair and Beauty Salon Limited.
(3) The tribunal does not have jurisdiction to deal with the claimants’ respective claims for unfair dismissal and these claims are dismissed by the tribunal without further order.
(4) The tribunal does not find the claimants’ respective claims for breach of contract (pay in lieu of notice) to be well-founded and these claims are dismissed by the tribunal without further order.
(5) Any other claims are dismissed by consent by the tribunal without further order.
Constitution of Tribunal:
Chairman: Mr JV Leonard
Members: Ms F Graham
Mr M Robinson
Appearances:
The claimants appeared personally and represented themselves.
The respondent was represented by Mr Simon Crawford, Solicitor, of Peden & Reid Solicitors.
REASONS
Evidence
1. The tribunal heard oral evidence from both of the claimants and from Ms Tina Fearon on behalf of the respondent. Various documents were introduced into evidence by agreement between the parties, and the tribunal noted these and the contents of the originating claim forms and responses thereto and other documents in evidence.
Issues
2. The history of the matter is slightly complicated and the tribunal will allude further below to the content of the originating claims lodged by the respective claimants as these are set out in their claim forms, and also to the responses thereto on the respondent's part, but it should be sufficient to say that, after some discussion at the commencement of the hearing, it was mutually agreed between the parties that the claims properly to be dealt with by the tribunal would consist of the claimants’ respective claims for alleged unfair dismissal by the respondent and also those claims that related to alleged breach of contract on the respondent’s part in regard to pay in lieu of notice. It was agreed, by consent of the parties, that any other claims initiated would be dismissed by the tribunal. As a result of these preliminary discussions it was also clear that the matter of the tribunal’s jurisdiction to deal with the claims of unfair dismissal was material to the case. The respondent’s contention was that the tribunal did not have jurisdiction for the reason that there was not one complete year’s continuous service in either case. This clarification of the material issues greatly simplified what would otherwise have been a rather more complex case and the tribunal is grateful to the parties for clarifying matters as they did. Therefore, in proper management of the matter, the tribunal indicated that it would first hear evidence materially going towards the issue of the tribunal’s jurisdiction in regard to the unfair dismissal claims and particularly whether or not one or both of the claimants as employees had or had not completed one year’s continuous service in employment with the respondent. Dependant on the outcome to the tribunal’s determination of that issue of jurisdiction, it was agreed that the case as regards unfair dismissal would either be disposed for want of jurisdiction or would immediately continue to a further stage. The tribunal also would hear evidence pertaining to the matter of the breach of contract claims. The only other immediate issue related to consolidation of the respective claims. As common facts related to both claimants and to the respective claims, it was agreed that the respective claims would be consolidated and the tribunal thus made a consolidation order.
Findings of fact
3. In consequence of the oral and documentary evidence before it, the tribunal on the balance of probabilities determined the following material facts:-
(1) The second-mentioned claimant, Mr Allan, prior to any employment with the respondent was employed in a teaching capacity and that employment came to an end on 28 April 2008. The tribunal inspected a P45 document in regard to Mr Allan which verified the foregoing information to be correct. This employment of Mr Allan was in Scotland. The tribunal had no corresponding information regarding any prior employment of Mr Getty.
(2) Ms Tina Fearon was a Director of a company named Freespirit Hair and Beauty Salon Limited. It was agreed between the parties that that company was the employer in this matter and thus the proper respondent, and the tribunal determined that that was the case. The company, Freespirit Hair and Beauty Salon Limited, thus being the respondent in the matter, it appears took up a franchise known as “Freespirit”. This was associated with a concern known as “Educogym”. That concern planned to open an “Educogym” at premises in the Victoria Square Centre, Belfast. For that purpose the respondent wished to recruit a number of employees as what was termed, “Educo Fitness Instructors”.
(3) Ms Fearon explained to the tribunal the background to the franchising arrangement. In order to adhere to franchise terms, the franchise holder (being the respondent) had to arrange for any such fitness instructors (“Educo Fitness Instructors”) firstly to undergo a four-week dedicated training course. This appears to have been a rather intensive and quite specialised course which resulted in a recognised certification or accreditation with some manner of international standing or recognition. In this instance the training course was to be held in the Bahamas. As the tribunal understands it, the dedicated training course was organised and provided by the body providing the franchise to the respondent. There seems to have been a contractual arrangement with the franchise holder that this course would be provided at a concessionary cost per person of €20,000 on account of the existence of the franchise with the respondent. Apparently individuals who wished to put themselves privately through the course had to pay the full cost of €30,000 for the same course. Ms Fearon explained to the tribunal that there was a risk involved in committing the respondent to this. The explanation afforded was quite clear. The respondent was required to incur a substantial expenditure in regard to this training; the risk was that this cost might not be recouped if the person being trained were to leave employment with the respondent without rendering a substantial amount of service to the respondent to recoup the value and cost of the course. The arrangement therefore proposed by the respondent was that persons were to be sent by the respondent on his course on foot of an agreement that 50% of the cost of the course was to be funded by the respondent company and 50% was to be funded by the individuals themselves. The further arrangement proposed was that the individual in question would take a loan for that 50% cost which was agreed to be repaid by the respondent over a period of time. All of this, of course, anticipated that the employment would continue for that necessary and substantial period of time and would not come to an early termination. Regrettably, that anticipation proved not to be the case under the circumstances which prevailed in this case as is further mentioned below.
(4) Regarding matters of contract, Ms Maria Johnston, who seems to have been a recruitment manager or agent for Educogym appears to have written a letter dated 11 March 2008 to Mr Allan. An unsigned copy of that letter was introduced into evidence by Mr Allan. That letter states, “On behalf of Tina Fearon, Managing Director of Free Spirit Salons and Educogym, I am delighted to offer you the position of personal trainer with Educogym. Your training will begin on the 2nd of April for 4 weeks. (I will forward you all flight details at a later date). On return of training, we may have to place you within one of our existing gyms in Dublin until the Educogym in Northern Ireland opens. I will confirm at a later date. Congratulations on your job offer and I wish you both a very happy working relationship”. Maria Johnston also appears to have prepared a further letter addressed to Mr Allan. The tribunal had sight of an unsigned and undated copy of that letter to which was attached a copy of a document entitled “Contract of Employment”. That latter document bore on its face the date, 18 March 2008. That document contained various terms and conditions of employment under the introductory title “Contract of Employment”. The drafting included a final page where the document was evidently intended to be signed by Tina Fearon and also dated and signed at the end by Mr Allan, but the copy of that document seen and inspected by the tribunal was undated and unsigned at the end page.
(5) The said (undated and unsigned) letter accompanying that “Contract of Employment” document, as inspected by the tribunal, contained the following words, “Dear Ricky. Please find enclosed the contract of employment signed by Tina Fearon. Can you please sign the end page and return the full contract to our head office at your earliest convenience.” Mr Allan’s evidence to the tribunal was that he had received these documents on or about his birthday, 19 March 2008, and that he had immediately signed the document which he contended, in his evidence to the tribunal, bore Miss Fearon’s signature and that he then returned the document as instructed. The (undated and unsigned) copy which the tribunal had had sight of, Mr Allan stated, was an additional copy sent to him to be retained by him. That was his explanation as to why it therefore did not contain any signature or date at the end.
(6) Turning then to the case of Mr Getty, in what the tribunal finds to be a very forthright manner Mr Getty informed the tribunal that he had no clear recollection of any documentation at that time. However he supposed that he would probably have received a document similar to that which Mr Allan stated he had received. If he (Mr Getty) had received that he would have signed and returned this. However, Mr Getty stated that he had no precise recollection and he could not be specific as to detail.
(7) Leaving the foregoing aside for the moment, what then transpired was that arrangements were duly made and Mr Getty and Mr Allan travelled to the Bahamas in order to undergo the training course. That course seems to have commenced in or around the start of April 2008 and both Mr Allan and Mr Getty then returned to the UK on 4 May 2008. Whilst in the Bahamas, according to the evidence of both Mr Allan and Mr Getty, it seems that there was some confusion or difficulty over payment of hotel expenses. That was towards the end of the period of their stay. The tribunal is not clear as to precisely what was the difficulty. However Mr Allan’s and Mr Getty’s evidence was that a “Contract of Employment” document, expressed in similar terms to the other document mentioned above, was put to the two by the representative of the respondent with the suggestion that if this was signed it would resolve any difficulties with the hotel accommodation. Both claimants signed and dated the “Contract of Employment” document on 28 April 2008. Indeed, from an inspection of the two copy documents as dated and signed, the tribunal notes that these seem to have become mixed up, for Mr Allan appears to have inadvertently signed Mr Getty’s copy and vice-versa. This seems to have been of simple mistake and the tribunal does not attach any particular significance to that. Both claimants contended that this was the context in which this version of the “Contract of Employment” document came to be signed and dated by each of them. These “Contract of Employment” documents in the case of Mr Getty and that of Mr Allan were the only signed and dated contractual documents seen by the tribunal in the course of the hearing.
(8) It appears that the original intention of the respondent was to commence business from the Victoria Square, Belfast, premises at the very start of May 2008. However, there was a delay of approximately two weeks in start-up on account of an over-run concerning the time taken to fit out the premises. The business commenced trading from the Belfast location on 12 May 2008. The wages records seen and inspected by the tribunal indicated that both of the claimants were indeed paid for the full month of May 2008. The wages paid represented payment for all of the potential working days of that month of May up to the date of payment on 26 May 2008. Ms Fearon explained to the tribunal that she felt that the proper course was to pay both of the claimants for the full month even though they did not actually commence working until 12 May 2008.
(9) The business it seems did not thrive. Trading was poor and the business was not doing well. Then, by letter dated 2 April 2009, Ms Fearon wrote to both of the claimants following on from a meeting with them which took place that day. The said letter dated 2 April 2009 confirmed that, due to the economic downturn, the business in Belfast was being closed and the claimants were informed that they were to be made redundant upon the expiry of one week from the date of notice. Thus the redundancy was to take effect on 9 April 2009. The final wages received by both of the claimants included pay in lieu of notice in respect of one week.
(10) Returning for the moment to the terms and conditions of employment contained in the “Contract of Employment” document, the tribunal noted that clause 1 of these terms (both in regard to the earlier version and also in respect of the version that was signed and dated by both of the claimants) provides as follows:-
“The employment … will commence on a date to be determined by me provided that it is not more than eighteen (18) months from the date of this Agreement (or such longer period as may be mutually agreeable) and that I give you not less than two (2) weeks notice in writing.”
(11) Further to the foregoing, the document provided, at clause 11, under at the clause title ”Notice” that contractual notice of one week was to be given in respect of termination of employment by the employer during the first year of service.
The Applicable Law
4. In respect of the law of unfair dismissal, the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”) provides at Article 126 of the 1996 Order that an employee has the right not to be unfairly dismissed by his employer. Article 140 of the 1996 Order provides that Article 126 does not apply to the dismissal of an employee unless he has been continuously employed for a period of not less than one year ending with the effective date of termination (subject to a number of statutory exceptions which do not apply in this case).
Article 118 of the 1996 Order provides that the notice required to be given by an employer to terminate the contract of employment of a person who has been continuously employed for one month or more is not less than one week's notice if his period of continuous employment is less than two years.
In regard to notice pay, the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 is applicable in relation to breach of contract by non-payment of notice pay and the tribunal may make an appropriate order.
The Tribunal’s Determination of the Issues
5. In this case the tribunal’s initial focus was upon whether or not these two claimants were employed by the respondent for a period of one year’s continuous employment. The tribunal noted the contentions made by both claimants as to when the employment had commenced. In the case of Mr Getty, his contention was that the employment had commenced on 29 March 2008. In the case of Mr Allan, his contention was that the employment had commenced on 18 March 2008. These respective contentions were based upon the date written on the face of the “Contract of Employment” document in each case intended for each of the two persons. Whilst Mr Getty could not remember having received a signed contract nor having dated and signed and returned that prior to his travelling to the Bahamas for the training, Mr Allan contended that he had indeed received a signed contract document, signed by Ms Fearon, and that he had countersigned and returned this document as instructed on or about 19 March 2008. He therefore submitted that, taking the date of termination of employment in his case as being 9 April 2009, he had received an offer of employment which he had accepted and that the employment was therefore to be deemed continuous for a period in excess of one year. Mr Getty made a similar submission on the understanding that he, likewise, had been afforded a contract offer which he had accepted, although he could not remember the precise details nor could he be certain about that.
6. In his submissions to the tribunal, Mr Crawford on behalf of the respondent drew to the tribunal’s attention the evidence which was that Mr Allan had been employed in another capacity, in Scotland, up to 28 April 2008. Therefore he could not have been employed by the respondent prior to the ending of his earlier employment. The tribunal had no corresponding information regarding Mr Getty of a similar nature and therefore could not draw any conclusions derived from earlier employment history. Mr Crawford went so far as to suggest that Mr Allan was being disingenuous in his evidence to the tribunal regarding what Mr Allan stated to be the “earlier contract” which Mr Allan contended was then replaced by the contract document signed by both parties on 28 April 2008, shortly before their return to Northern Ireland. Mr Crawford drew to the tribunal’s attention the respective claim forms. He contended that neither of the two claimants had completed the section in the respective claim forms which requested details as to when the employment had commenced with the respondent. He submitted that this striking omission was for the very clear and good reason that both claimants knew that it would deprive the tribunal of jurisdiction if they were each to be truthful and accurate about the commencement date. Mr Crawford contended that such vagueness, in contrast, was not displayed in any other part of the respective claim forms in either case. In response, Mr Getty contended that he was not familiar with legal matters and that he had merely omitted to complete some sections of the claim form due to inadvertence or inexperience on his part.
7. What then was the status of the claimants in the period upon which the tribunal must focus, that is to say from mid to late March 2008 up until the end of April or early May 2008? The tribunal notes that it is certainly not in contention on the part of the respondent that there was indeed a contract of employment in existence in both cases from the start of May 2008. It is the status of both claimants in the weeks leading up to that point which is in contention. In terms of conducting a legal analysis of the situation based on the determined facts, the tribunal notes that most of the academic commentaries upon the contractual employment status of an individual relate to whether or not a contract of service exists or whether, in contrast, there is a contract to provide services as an independent contractor, these often being in the “self-employment” issue type of cases in redundancy or contract claims. It is slightly unusual to encounter the scenario that is now before this tribunal.
8. However, examining the determined facts of the matter, the proper analysis that the tribunal can bring to bear begins with an examination of the requirements for the franchise arrangement. That clearly required that a training course would have to be attended by persons who were to work for the respondent in the capacity of “Educo Fitness Instructors”. This was so in order that such persons might attain the accreditation required by the franchise. The tribunal fully understands the employer’s position in that there would be very clearly a substantial risk in the employer funding the full and substantial cost of this course, only to have any employee leave after a short period of time and perhaps take away skills and experience into some other employment, to the benefit of the employee and the other (future) employer and to the substantial detriment of the respondent. It is for this reason that the tribunal notes that clause 1 of each contract is constructed in the way in which it is, thereby permitting the employment to commence on a date to be determined by the employer. This provision clearly anticipates what has indeed occurred in this case. The arrangements specified that the prospective employees would enter into an agreement to be sent on the training course. The arrangements also specified, in particular, that there would be joint funding of the cost of the course in order to share the risk and to reduce the potential risk to the employer. Any such arrangement does not, of itself, constitute a contract of employment. This is so for the reason that any contract of employment, upon proper analysis, will of necessity be composed of a number of separate components. There is plenty of well-settled law upon this topic which the tribunal does not intend to recite in this decision (see for example O’Kelly v Trusthouse Forte Plc [1983] IR 728, Carmichael v National Power [2000] IRLR 43 and generally see Harvey at Vol.1 Div.A (1) as regards the application of the so-called “control test”, “economic reality test” and the “mixed test” in analysis of the relationship). However, in essence, the existence of a contract of employment presupposes that there is clear evidence of such factors as mutuality of obligation, obligation to render personal service, control by the employer of the employee’s activities, remuneration by payment of wages, payment for illness absence, paid holidays, control by means of a disciplinary code laid down by the employer, prohibition on working for other companies or individuals, and other such matters. Some of these components do not appear to be present in the agreement underpinning these initial training arrangements required for the operation of the franchise.
9. What then appears to have occurred is that almost immediately upon return of the claimants from the Bahamas, the employment indeed commenced, in the sense that work was provided for each of the claimants to undertake, they each undertook such work at the direction and under the control of the employer, and they were paid remuneration in respect of this work. It was at the stage that work was performed as provided and instructed, that wages commenced to be paid. This appears to be in accordance with the contract terms mentioned above, materially clause 1 of these terms, although it must be said that there was no evidence of the necessary two weeks’ advance notice being given in writing by the employer. However, the tribunal must assume that the claimants waived their entitlement to such written advance notice and the reality is as above-mentioned. Upon an analysis of the facts and the application of the law, the tribunal has difficulty in accepting the claimants’ arguments that the financial arrangement was, in effect, a type of pay for work to be performed on behalf of the employer in the course of the training. Therefore, the tribunal’s determination is that the period of time spent by both Mr Getty and Mr Allan prior to their return from the Bahamas to commence working in the Belfast Educogym did not constitute a period of employment where each was employed by the respondent under the terms of a contract of employment. The evidence leads the tribunal to the conclusion that the employment only commenced upon return from this training in each case and there existed no employment contract prior to that point, whatever other contractual arrangement may have existed. The tribunal would observe that it is possible for persons to have a very broad and very diverse range of contracts of all types and these will of course deal with a broad range of issues covering all possible human interaction. Included amongst these will of course be a smaller number which will constitute contracts of employment upon proper at legal analysis. In this case the contract of employment commenced at the start of May 2008 in the case of each claimant when there is evidence of a clear consensus that each would commence working and be paid for that work.
10. Regrettable though the outcome of the tribunal's determination may be for both of the claimants, the tribunal’s conclusion is that neither Mr Getty nor Mr Allan was employed by the respondent for a period of one complete year at the time of termination of employment. That being the case, the tribunal does not have jurisdiction to deal with the unfair dismissal claim.
11. In respect of the breach of contract claim for pay in lieu of notice, as the contract terms appear to have been agreed to provide for one week’s notice of termination of employment where the employee had been employed for less than one year, and as the statutory provisions mentioned above (Article 118 of the 1996 Order) give no enhanced entitlement greater than that provided for by contract, and as one week’s notice of termination was indeed afforded by the respondent to both of the claimants, there is no additional entitlement. Thus there is no evidence of any further entitlement to pay in lieu of notice (nor indeed to any other wages outstanding and unpaid). Therefore this claim is not well-founded in either case.
12. Accordingly the claimants’ claims are dismissed by the tribunal, without further order.
Chairman:
Date and place of hearing: 1 December 2009, Belfast.
Date decision recorded in register and issued to parties: