Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:          6092/09

 

 

CLAIMANT:                       Iris Ann Scarlett

 

 

 

RESPONDENTS:           1. Craig Bennett

 

       2.          Dreemore Developments Ltd (in administration)

 

                                       3.        BC (NI) Ltd

 

 

 

DECISION

 

 

The decision of the tribunal is that the tribunal awards the claimant £1,021.97 in respect of her claims of redundancy payment and unpaid wages.

 

 

 

Constitution of Tribunal:

 

Chairman (sitting alone):           Mr I Wimpress

 

 

 

Appearances:

 

The claimant was unrepresented and appeared on her own behalf

 

The respondents did not appear and were not represented

 

 

The Claim and the Response

 

1.       In her claim form dated 1 June 2009, the claimant brought claims against   BC( NI) Ltd and Dreemore Developments Ltd in respect of redundancy and unpaid wages which arose from the termination of her employment as a sales assistant on 8 April 2009.  The claimant received a cheque in respect of her final wages and redundancy payment but the cheque was not honoured.  The claimant also sought payment in respect of the back pay that was included in her final pay slip. 

 

2.       On 11 August 2009, Mr Cavanagh of Messrs Cavanagh Kelly, a firm of chartered accountants and insolvency practitioners, wrote to the tribunal office.  Mr Cavanagh advised that he had been appointed as Administrative Receiver in respect of Dreemore Developments Ltd on 2 February 2009 and that all the employees which included the claimant were transferred to BC (NI) Ltd on 1 December 2008.  Mr Cavanagh enclosed a copy of his Notice of Appointment and the relevant sections of a Business Sales Agreement together with a schedule which listed all employees who had been transferred.  Mr Cavanagh concluded the letter by stating that he did not believe that there were grounds for any claim against Dreemore Developments Ltd. 

 

Sources of Evidence

 

3.       The tribunal heard oral evidence from Ms Scarlett and received a number of documents from her which included her contract of employment, a pay slip, two P60s some correspondence and a cheque.  None of the respondents appeared at the hearing of this matter on 22 January 2010 but Messrs McGrigors, Solicitors, filed written submissions in advance of the hearing on behalf of the Administrative Receiver of Dreemore Developments Ltd, Mr Cavanagh. 

 

The Facts

 

4.       The claimant's date of birth is 23 October 1958.   As appears from the claimant's contract of employment, she commenced working for Dreemore Developments Ltd on 23 July 2007 at Bennett’s Mace, Main Street, Brookborough as a General Shop and Deli Assistant.  The contract provided that her rate of pay was £5.85 per hour.  The claimant worked a 40 hour week and this gave her gross pay of £936.00 per month and £784.84 net.  The claimant’s contract also made provision in respect of notice pay on the basis that the claimant would receive one week’s notice pay in respect of each completed year of service. 

 

5.       In her evidence to the tribunal the claimant stated that her first place of work was at Bennett’s Mace Lisbellaw in June 2007.  She moved to the Brookborough shop on 10 September 2007.  The claimant maintained that she was entitled to one week's notice based on her contract of employment. In early 2009 her pay slips changed from Dreemore Developments Ltd to BC (NI) Ltd.

 

6.       The claimant finished work as normal on Wednesday 8 April 2009 at 5.00pm and at 8.00pm on the same day she received a text message from the manager of the shop who advised that the shop had closed.  On 17 April 2009, the claimant received a pay slip and two cheques.  The pay slip gave the employer's name as BC(NI) Ltd.  The cheques were signed by Mr Bennett and were stamped “Bennett & Selvin Spmrkts Ltd".  The first cheque was for £234.00 and the second cheque was for £887.97.  The pay slip details were as follows:

 

Basic Pay -                                              £234.00

Back Pay -                                               £323.39

Redundancy -                                           £702.00

Total Gross Pay -                                  £1,259.39

Net Pay -                                              £1,121.97

 

Deductions in respect of tax and national insurance totaled £137.42

 

7.       The cheques were not honoured by the bank.  The claimant therefore wrote to Mr Bennett as “the presumed owner of Dreemore Developments Ltd and BC (NI) Ltd” and referred to three previous occasions when she had been paid in cash and required him to pay her the cash equivalent of the cheques on this occasion as well.  No reply was received.

 

8.       The claimant's P60 for 2007/2008 gives Dreemore Developments Ltd as her employer c/o  Craig Bennett 25 Statmore Road, Clogher and for 2008/2009 her P60 gave her employer as  BC(NI) Ltd of 97a Main Street, Fintona, County Tyrone. 

 

9.       The claimant was able to identify Mr. Bennett's signature from the two cheques and on the Business Asset Transfer Agreement where he appeared as a director of Dreemore Developments Ltd.  The claimant also identified Mr Eugene Donnelly's signature on the same document as a director of BC (NI) Ltd.  The claimant recalled meeting him at the head office at Fintona.

 

10.     Notwithstanding the apparent change in ownership of the business on 1 December 2008, it is apparent that Mr Bennett was still very much involved and signed the cheques in payment of wages and redundancy when the business closed in April 2009.  The tribunal also notes that Mr. Bennett was a director of Dreemore Developments Ltd when the transfer occurred.

 

Submissions

 

11.     The claimant’s case rested on her evidence to the tribunal and understandably she did not seek to advance any legal submissions. 

 

12.     In their written submissions to the tribunal Messrs McGrigors submitted that the claimant had been transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") from Dreemore Developments Ltd to BC(NI) Ltd by a Business Asset Sale Agreement  dated 1 December 2008.  Clause 10.1 of the Agreement provides as follows:

 

"TUPE applies to the sale and purchase of the Business affected by this Agreement and accordingly the contracts of employment between the Employees and the Seller [Dreemore Developments Ltd ] shall not terminate as a consequence of the Agreement and shall transfer to the Buyer [BC(NI)Ltd] with effect from the completion date [1 December 2008] pursuant to TUPE."

 

13.     It was further submitted that this was a normal solvent transfer as Dreemore Developments Ltd, the transferor, was not the subject of insolvency proceedings at the time of the transfer on 1 December 2008. As the claimant's claim  accrued  both after the transfer and after Dreemore Developments Ltd had entered into administrative  receivership on 2 February 2009, the amounts claimed were not liabilities arising during employment with Dreemore Developments Ltd or related to transfer or the insolvency proceedings [Article 8 TUPE].  Under Articles 45,118, 120 and 170 of the Employment Rights (NI) Order 1996 liability in respect of unlawful deduction from wages, obligations in respect of notice and entitlement to redundancy payments fell to be dealt with by the employer and BC (NI) Ltd was the claimant's employer during the relevant period rather than Dreemore Developments Ltd.  In essence it was contended that all liabilities in respect of the claimant's employment transferred to BC (NI) Ltd on 1 December 2008 and liabilities accruing after that date were the sole responsibility of BC (NI) Ltd.  The submission also drew attention to the consequences of the tribunal finding that any of the outstanding amounts related to past employment with Dreemore Developments Ltd.  It was submitted that if this occurred these liabilities would not be regarded as preferential debts within the meaning of Schedule 6 of the Insolvency Act 1986 and that it would therefore be unlikely that there would be funds available to meet such an award.  The submission concluded by requesting that Dreemore Developments Ltd and the Administrative Receiver be removed as respondents in the proceedings.

 

The Law

 

           14.    Article 170 of the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”) provides that an employer shall pay a redundancy payment to any employee in the event that the employee is dismissed by the employer by reason of redundancy.  Circumstances in which an employee who is dismissed shall be taken to be dismissed by reason of redundancy are set out in Article 174 of the 1996 Order. This provides as follows:

 

                    “For the purposes of this Order an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to (a) the fact that his employer has ceased or intends to cease (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business— (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.”

 

             15.    Article 197 of the 1996 Order sets out how the amount of the redundancy  

          payment should be calculated with reference to length of service and age of the employee. 

 

16.               The Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 (“the 1994 Order”) provides that an employee may bring a claim for damages for breach of contract of employment or for a sum due under that contract if the claim arises or is outstanding on termination of employment. 

Conclusions

 

17.     The claimant was employed from 23 July 2007 to 8 April 2009 and therefore has less than two completed years of service.  Accordingly, she is not entitled to statutory redundancy pay.  However, it is clear from the claimant’s final pay slip that Mr. Bennett intended that she should have the benefit of a redundancy payment based on two years service.  Thus the claimant enjoys a contractual entitlement to this payment which in common with the unpaid final week’s wages and the back pay was outstanding on the termination of her employment.

 

Award

 

18.     Final week's pay                             £234.00 (gross)

Back Pay                                       £323.39 (gross)

                              

                   Sub total £557.39

 

Less PAYE & National Insurance                                            £319.97

 

Contractual Redundancy Pay                                                  £702.00

                                                   

 

                                                                       TOTAL AWARD     £1,021.97

 

 

19.     This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

 

 

 

Chairman:

 

 

Date and place of hearing:  22 January 2010, Enniskillen

 

 

Date decision recorded in register and issued to parties: