Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2010/524_10IT.html
Cite as: [2010] NIIT 524_10IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 524/10

CLAIMANT: Marc McGerty

RESPONDENT: North Antrim Business Agency Ltd

DECISION

The decision of the tribunal is that the claimant has not suffered an unauthorised deduction from wages and his claims in respect thereof are dismissed.

Constitution of Tribunal:

Chairman (Sitting Alone): Ms Bell

Appearances:

The claimant appeared in person.

The respondent was represented by Mr Michael Clarke, Vice Chairman of the board of director’s of the respondent company.

1. The claimant complained in his claim that he had suffered an unauthorised deduction from his wages in relation to time in lieu and holidays due to him on termination of his employment. At hearing the claimant confirmed that he was no longer pursuing his claim in relation to holiday pay and that the correct title of his former employer and proper respondent in this matter is North Antrim Business Agency Ltd. The proceedings against the Chairperson of the Board of Directors North Antrim Business Agency Ltd are accordingly dismissed and the title of the proceedings are amended from Marc McGerty v 1. The Chairperson of the Board of Directors North Antrim Business Agency Ltd - 2. North Antrim Business Agency to Marc McGerty v North Antrim Business Agency Ltd.

2. The respondent in its response resisted the claimant’s claims on the basis that all statutory payments due to the claimant on termination of his employment had been made and that it did not consider that the claimant was entitled under his contract of employment to payment for the claim of time in lieu. It also contended that the claimant left the respondent prior to working his agreed notice period.

Issues

3. The issues for the tribunal were:-

(i) Is the claimant contractually entitled to payment in lieu of time accrued due at termination of his employment?

(ii) Has the claimant suffered an unlawful deduction from wages?

Evidence

4. The tribunal considered the claim, response, agreed bundle of documentation, and heard oral evidence from the claimant, Mr Michael Clarke and Ms Claire Gibson the current Chairperson of the respondent’s board of directors.

Findings of Fact

5. The claimant was formerly employed by Moyle District Council and spent approximately half of his time over four years carrying out duties as operations manager for the respondent company which was an enterprise company.

6. In early 2008 the claimant was offered the position as Chief Executive of the respondent company. The claimant was familiar with the standard form of contract of employment used by the respondent from his previous involvement with the respondent and on accepting the position offered to him, prepared a contract of employment for himself with details of his personal package, dated it 23 May 2008 and forwarded it to Mr Terry McCartney, the respondent’s Chairperson at that time, for approval and to return to him then to sign. The claimant gave evidence that Mr McCartney told him however that the contract was not applicable to him as Chief Executive and gave him a two page letter dated 26 May 2008 to sign instead, setting out his terms and conditions of employment, which the claimant signed to acknowledge acceptance of. The previous draft contract was not returned to the claimant for signature. The respondent contended that the two page document was a letter of offer issued to supplement the contract that the claimant had prepared.

7. The terms and conditions set out in the letter dated 26 May 2008 were limited in comparison to those in the draft contract prepared by the claimant but compared against their equivalent provision differed materially only in relation to the approved business mileage, the draft contract providing a rate of 10 pence per mile, whereas the letter allowed 20 pence per mile, and, time in lieu. The draft contract stated
‘[f]or additional time worked in excess of 30 minutes time off in lieu will be permitted with agreement of the Manager. Time in Lieu must be taken within 30 days of the date accrued.’ The letter however provided ‘you will be expected to be flexible in undertaking duties outside normal working hours, for which time off in lieu will be permitted.’ Both documents required the claimant to give the respondent three months notice to terminate his employment. The tribunal finds that the letter

dated 26 May 2008 from the Chairperson to the claimant and signed by the claimant to accept the terms and conditions therein forms the claimant’s statement of terms and conditions of employment rather than the unsigned draft contract prepared initially by the claimant.

8. In October 2009 the officers of the respondent’s board of director’s changed and following differences in opinion the claimant decided to leave and start up in business himself. The claimant tendered his resignation to the respondent by letter of 16 October 2009 giving three months notice.

9. A board meeting took place on 28 October 2009 at which the claimant confirmed that he was happy to work three months notice. It was indicated to the claimant that if he wished to leave before this that this would be a decision for the Chairperson, Ms Gibson.

10. On 4 November 2009 before a meeting with Ms Gibson the claimant emailed her and Mr Clarke with details of the time in lieu and holidays he considered to be due to him stating that ‘[t]he total Time in Lieu balance is 186 hours (26 days and
one hour), and I have eight days, which combined totals 34 days and I hour. I have calculated that if my last day is 31 December 2009 then my last day in the office would be around the 13^th November.’ The claimant later that day met with Ms Gibson who informed him that he was due to finish work on the 15 January 2010. The claimant presented Ms Gibson with his calculation of time in lieu and holidays he considered to be due to him and indicated that he wished to take this time off before termination of his employment and asked Ms Gibson if he could finish work on the 13 November 2009. Ms Gibson questioned the time in lieu sought, in particular pointing out that the time claimed for training preparation appeared to be excessive. Ms Gibson asked the claimant if he would reduce his time in lieu figure and confirmed that she would need to discuss matters further with Mr Clarke and the board. The claimant gave evidence that he thought that it was always implied that provided he had completed the work that needed to be done before he left that he it would be acceptable for him to finish working on the 13 November 2009 and that he was not aware that he had to wait for Ms Gibson’s approval. The tribunal find that Ms Gibson did not agree at the meeting with the claimant on 4 November 2009 that the claimant could stop working for the respondent on 13 November 2009.

11. The claimant emailed Ms Gibson on 6 November 2009 stating that he was prepared to reduce the time in lieu he sought to from 183 hours to 101.5 hours being 14.5 days rather than 26 days. Combined with eight days holidays sought this amounted to 22.5 days which the claimant wished to take off work before his termination date.

12. Mr Clarke emailed the claimant on 11 November 2009 indicating that they needed to discuss his last day at work, taking into account his remaining holidays and proposed time off in lieu. Mr Clarke confirmed that he understood allowing 22.5 days off in lieu would make the last day at work 11 December 2009 for an effective date of termination of 15 January 2010, notice having been given on 16 October 2009, and asked the claimant to confirm that this was also his understanding.

13. On 12 November 2009 Ms Gibson told the claimant that the board wanted him to work until 11 December 2009. The claimant replied that he could not stay beyond the 13 November 2009 as he had believed that the 13 November 2009 had been agreed as his last day and he had signed a lease on premises and agreed to undertake other work before Christmas. Ms Gibson informed the claimant that 13 November 2009 was not acceptable to the board and that this date was not agreed by her with him. The claimant suggested that he could undertake work for the respondent that fitted around his new work pattern but this was not acceptable to Ms Gibson.

14. Despite the respondent requiring the claimant to continue working until 11 December 2009 before taking time in lieu and holidays accrued due to bring his effective date of termination up to 15 January 2010, the claimant left work on 13 November 2009.

15. On 16 November 2009 the claimant received a letter from Ms Gibson expressing extreme dissatisfaction with the manner in which the claimant left on 13 November 2009. It confirmed that the respondent was treating the 13 November 2009 as the claimant’s last day of employment and he would be paid holidays and salary up to then but that his time in lieu claim was considered unreasonable, should have been agreed at the time and was being disputed by them and in any case did not amount to a length of time sufficient to warrant him not fulfilling his full contractual notice period.

16. The claimant received payment from the respondent following termination of his employment on 13 November 2009 for holidays accrued due to him.

The Law

17. Article 45 of the Employment Rights (Northern Ireland) Order 1996 provides that an employer shall not make a deduction from wages of a worker employed by him save where authorised by statutory provision or relevant written contractual provision or agreed to in writing by the claimant before the event giving rise to the deduction. A deduction occurs where a worker is on any occasion paid less than the total amount of wages properly payable to him.

18. Terms maybe implied into a contract in a variety of ways including custom, whereby if a term is regularly adopted then it may be possible to assert that it has become customary and falls to be implied into every contract in that trade, or industry or area, however courts will not lightly find a custom, and “the custom asserted must be (in the traditional phrase) “reasonable, notorious and certain”.

19. An express contractual term may be varied, however for the new contractual term to be enforced it must be obvious and precise, that is, certain as to what the new term is.

20. Under the general law of contract a party may be discharged from further performance if the other party is guilty of a repudiatory breach of contract, as such the innocent party may be excused from further performance.

Applying the law to the facts found

21. The tribunal is satisfied on a balance of probabilities that the letter to the claimant and signed by him rather than the draft contract prepared by him sets out the terms and conditions of employment expressly agreed between the respondent and claimant on the claimant’s engagement. There is an express term therein that the claimant will be expected to be flexible in undertaking duties outside normal working hours, for which time off in lieu will be permitted, there is no qualification therein limiting how far back time in lieu may be claimed. However, nor is there express provision therein allowing for payment in lieu of time in lieu accrued due at termination of employment. The claimant gave evidence that two employees employed under the standard contract received payment in lieu of time in lieu accrued due at termination of their employment, these payments were however authorized by the claimant and the tribunal is not persuaded that it was a reasonable, notorious and certain custom such that a condition has as a result been implied into the claimant’s contract for payment in lieu of time in lieu accrued due, by custom and practice. There is no evidence before the tribunal that the condition was expressly varied to allow for a payment in lieu of time accrued due on termination.

22. It clearly would be unfair not to allow an employee to use up a contractual entitlement prior to termination of employment where payment in lieu thereof will not be made on termination. It is however incumbent upon an employee to serve out his full contractual notice period unless a shorter period is agreed with his employer. The tribunal is not persuaded that the respondent agreed with the claimant for him to finish on 13 November 2009 and finds that the claimant in leaving work prior to 11 December 2009 was guilty of a repudiatory breach of his contract of employment with the respondent which the respondent accepted by its letter of 16 November 2009 and as such the claimant is not entitled to seek to enforce a contractual entitlement to take time off in lieu before his employment is deemed to have officially terminated with the respondent, he himself being in breach of the contract in respect of his contractual obligation to serve his proper notice prior to termination and having brought his employment to an early end on 13 November 2009 .

23. The tribunal finds that the claimant is not contractually entitled to a payment in lieu of time in lieu accrued due which he did not have an opportunity to take before termination of his employment as the result of his own actions.

Conclusion

24. The claimant has not suffered an unauthorised deduction from wages and his claims in respect thereof are dismissed.

Chairman:

Date and place of hearing: 21 May 2010, Belfast.

Date decision recorded in register and issued to parties: