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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Hegan v Peninsula Business Services Lt... [2010] NIIT 06386_09IT (16 February 2010)
URL: http://www.bailii.org/nie/cases/NIIT/2010/06386_09IT.html
Cite as: [2010] NIIT 06386_09IT, [2010] NIIT 6386_9IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 06386/09
CLAIMANT: Hugh Osborne Hegan
RESPONDENT: Peninsula Business Services Ltd
DECISION
The unanimous decision of the tribunal is that the claimant is entitled to compensation of £43,489.15 by reason of having suffered an unfair dismissal.
Constitution of Tribunal:
Chairman: Mr B Greene
Panel Members: Mr M Grant
Mr J Smyth
Appearances:
The claimant was represented by Mr P Moore, of PM Associates.
The respondent was represented by Mr Bertrand Stern-Gillet, instructed by Peninsula Business Services Ltd.
SOURCES OF EVIDENCE
1. The tribunal heard evidence from the claimant and on behalf of the respondent from Mr Paul Bradley. The tribunal also received three bundles of documents amounting to 281 pages; four schedules of loss; two skeleton arguments; and a number of authorities from cases and text books.
THE CLAIM AND DEFENCE
2. The claimant claimed unfair dismissal simpliciter and automatic unfair dismissal. The respondent entered a response in which it sought to resist the claimant’s claims in their entirety.
By fax of 21 January 2010 the respondent wrote to the Office of the Tribunals indicating that it conceded liability in this case and requesting that the hearing listed for full merits be converted to a remedy hearing only, which request was granted.
THE ISSUES
3. The issue for determination was the quantum of compensation payable to the claimant by reason of having suffered an unfair dismissal simpliciter and an automatically unfair dismissal.
FINDINGS OF FACT
4. (i) The claimant, who was born on 4 March 1949, was employed as a sales person from 22 March 2004 until 3 April 2009 by the respondent.
(ii) The respondent carries on the business of providing advice and services to its clients in the field of employment law and human relations matters.
(iii) On 3 April 2009 the respondent dismissed the claimant because of his performance.
(iv) The respondent accepts that the claimant’s dismissal amounted to an unfair dismissal simpliciter and to an automatically unfair dismissal.
(v) It was agreed by the parties that in relation to the automatically unfair dismissal that the respondent had failed in its letters to the claimant, in connection with the disciplinary meetings, to advise him that a potential outcome of the disciplinary meeting was his dismissal.
(vi) The tribunal has been asked to determine remedy only.
(vii) From 4 April 2009 until 28 January 2010 the claimant made 51 job applications without success.
However, he has done some work on a self-employed basis for the Federation of Small Businesses for which he earned £2,846 over a period of eight months.
(viii) The claimant’s earnings on a monthly basis were made up of a basic salary of £15,000 per annum gross and a commission based on the results of his sales.
The claimant’s P60s for years 2004-05; 2005-06; 2006-07; 2007–08; and 2008-09 showed a net income of £21,143.63; £39,234.48; £32,703.16; £31,947.10 and £23,811.28.
(ix) The claimant’s contract of employment contained a restrictive covenant which was applicable for 12 months subsequent to the termination of the claimant’s employment.
By reason of that restrictive covenant the claimant was prohibited from;-
(a) directly or indirectly either on his own account or on behalf of or with any other person, firm, company or organisation from either conducting any business or activity like that carried out by the respondent in which the claimant had been directly concerned for the previous 12 months or canvassing or soliciting or by any other means seeking to conduct any business or activity the same as that carried on by the respondent and in which the claimant had been directly concerned, or
(b) conducting any such business or canvassing or soliciting or using any other means to conduct such business with any prospective client with whom the claimant had any material dealings for the previous 12 months.
(x) The claimant seeks, by way of remedy, compensation only.
THE LAW
5. (i) An award for compensation for unfair dismissal shall include a basic award and a compensatory award (Article 152 The Employment Rights (Northern Ireland) Order 1996).
(ii) The basic award is calculated by multiplying the number of years service, calculated in accordance with the Order, by the weekly pay (Article 153 The Employment Rights (Northern Ireland) Order 1996).
(iii) The amount of the compensatory award shall be such as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer (Article 157 The Employment Rights (Northern Ireland) Order 1996).
(iv) In determining the compensatory loss the employee has a duty to mitigate his loss.
(v) Where the statutory dismissal procedure has not been completed and the failure is wholly or mainly the employers, an industrial tribunal shall increase any award by 10% and may raise the increase to 50%, if it considers it just and equitable to do so, unless there are special circumstances which make the uplift unjust or inequitable (Article 17(3) and (4) The Employment Rights (Northern Ireland) Order 2003).
(vi) In determining a week’s pay for the purposes of calculating the basic award under Article 153 of the Employment Rights (Northern Ireland) Order 1996 the value of commission earned is not taken into account where that commission does not depend on the length of the employee’s working week or the amount of work done but which is dependant on the success of the work done. (Martin Evans v Malley Organization Ltd (T/A First Business Support) [2002] EWCA Civ 1834 Court of Appeal).
(vii) Where compensation in excess of £30,000 is awarded by a tribunal in order to take into account the effects of tax to be levied on such an amount the tribunal must gross up by 32% any amount of compensation in excess of £30,000 (Income Tax (Earnings and Pensions) Act 2003 sections 401 and 403).
APPLICATION OF THE LAW AND FINDINGS OF FACT TO THE ISSUES
6. (i) The respondent has conceded that the claimant suffered an unfair dismissal simpliciter and an automatically unfair dismissal.
(ii) The respondent accepts that there has been a failure by it to complete the statutory dismissal procedure by failing to advise the claimant in writing of the risk to him of dismissal at the disciplinary meeting. As this failure is due wholly or mainly to the failure on part of the respondent an uplift to the compensatory element is appropriate.
The respondent does not suggest that there are any special circumstances which make an uplift unjust or inequitable.
(iii) The tribunal considers that the uplift should be 20%. In so concluding the tribunal was influenced by the fact that although the failure by the respondent was a simple and straightforward failure it was a failure that occurred in very serious circumstances when the claimant’s job was at risk and when he ultimately lost his job.
(iv) The claimant is entitled to compensation for unfair dismissal as set out below. In addition to the loss to the date of hearing the tribunal allows a future loss of 26 weeks. In allowing a future loss of 26 weeks the tribunal had regard to the fact that the claimant is an accomplished salesman with considerable experience in that field and that the restrictive covenant which restricts his opportunities for pursuing work in a similar field to that upon which he was formerly engaged with the respondent or with their clients or potential clients expires in April 2010.
(v) In assessing the net loss to the claimant the tribunal used the net figures for the year 2008-09, gleaned from the P60. It rejected the claimant’s contention of aggregating his net earnings for a number of years to determine his net weekly wage as this would not reflect the changing economic circumstances in 2008 and 2009.
The tribunal also rejected the respondent’s contention that it should use his net wages paid for the 12 weeks prior to dismissal. The tribunal regarded these figures as presenting an equally unrepresentative picture of his loss. According to the wages slips produced for 12 weeks he did not receive his basic salary during eight of those weeks. There was not any evidence to explain why that was the case. The respondent’s representative suggested this omission might be due to a period of unpaid leave given to the claimant. The tribunal does not consider that it would be just and equitable in deciding the loss suffered by the claimant to focus on periods when he got unpaid leave.
BASIC AWARD £
£288.46 x 7½ (5 x 1.5) = 2,163.45
COMPENSATORY AWARD
From 4 April 2009 – 28 January 2010
£457.91 x 42.71 (42 weeks and 5 days) = 19,557.34
FUTURE LOSS
29 January 2010 – 30 July 2010
£457.91 x 26 = = 11,905.66
Loss of Statutory Rights = 250.00
TOTAL COMPENSATION = 31,713.00
Uplift of Award by 20% = 38,055.60
TOTAL COMPENSATION INCLUDING
THE BASIC AWARD = 40,219.05
The grossing up for tax purposes of £10,219.05 = 13,489.15
+ 30,000.00
TOTAL COMPENSATION = £43,489.15
7. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.
Chairman:
Date and place of hearing: 25, 27 and 28 January 2010, at Belfast.
Date decision recorded in register and issued to parties: