Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REFS:  6830/09, 6993/09

 

 

CLAIMANT:                      Karen McVeigh

 

 

RESPONDENT:                Excellent Edges Limited

 

 

DECISION

The unanimous decision of the tribunal is that the claimant was unfairly dismissed and that the respondent is ordered to pay her the sum of £5,668.89 in compensation.

 

Constitution of Tribunal:

Chairman:              Ms P Sheils

Members:              Mr G Hunter

                              Mr H McConnell

 

Appearances:

The claimant appeared and was represented by Mr Conor Hamill, counsel, instructed by Mary Gallen of Worthingtons Solicitors.

The respondent, Mr Noel Irvine, owner of the company Excellent Edges, appeared and represented himself.

 

The Claim and the Response

 

1.     The claimant lodged a claim on 15 September 2009 alleging that she had been unfairly dismissed and that she was owed monies in respect of unpaid wages, notice pay and other unpaid amounts. 

 

The respondent entered a response on 26 October 2009 denying that the claimant had been dismissed as alleged or at all. 

 

Sources of Evidence

 

 2.      The Tribunal heard from the claimant. The Tribunal also heard from the respondent, Mr Noel Irvine, and from witnesses for the respondent, namely, Mark Harrigan, Margaret Miskelly and Tara Millar.   

 

Facts

 

The Tribunal found the following facts as agreed or proven on a balance of probabilities:

 

 3.      The claimant commenced her employment with the respondent, Excellent Edges Limited, in October 2006.  She was employed by Mr Irvine as a sales representative selling hairdressing scissors.  The claimant received a basic salary which in May 2009 amounted to £1,400.00 gross per month, £1,050.80 net per month.  In addition the claimant received additional benefits including the use of a company car, fuel expenses, parking expenses, car tax and insurance paid for by the respondent.  Additionally the claimant had 10% commission on all scissors sold on reaching her target sales of £1,000 pounds worth of scissors per week.

 

4.             In August 2008 the claimant was asked to sell other hairdressing products sold by a

“sister” company, Salon Care Sales.  Although the claimant was told that she had “transferred” to the employment of the sister company it was accepted by the respondent at the hearing that the claimant at all times worked for Excellent Edges Limited. 

 

On 15 May 2009 the claimant received a telephone call from the respondent Mr Irvine inviting her to a meeting the following Monday, 18 May 2009.  The claimant asked Mr Irvine if she had cause to be concerned about this meeting but he advised her she had none.

 

5.             On Monday 18 May the claimant was invited into the meeting and was joined in it by her colleague, Mr Mark Harrigan.  Mr Harrigan was employed by Salon Care Sales.  Both Mr Harrigan and Ms McVeigh were told at the meeting that the respondent was closing Salon Care Sales as the respondent wanted to avoid the company going into insolvency.  

 

6.             At this meeting the claimant and Mr Harrigan were given new contracts entitled “self-employed contractor agreement (Sales).”  This was an agreement with Excellent Edges Limited on the one part and the claimant on the other which, amongst other terms and conditions, included the words “Relationship with the Parties …nothing in this agreement shall render the contractor an employee, agent or partner of the company and the contractor should not hold themselves as such.”

 

The respondent stated that he had spent some time creating this agreement himself and that he had not taken any advice or guidance on it from anyone. He stated that he had compiled it from other such documents on the internet. The respondent also stated he was aware of the fact that the new working arrangement he offered the claimant was ending her employment relationship with him as his employee.

 

 

7.             At the meeting the respondent advised the claimant that he would continue to pay her wages for an additional two month period up until the end of August 2009. The respondent went on to advise the claimant that at that point her wages thereafter would be whatever she earned in commission in sales.  The respondent indicated that the claimant could continue having use of the car up until the end of the period of the car lease which was approximately one year from May 2009. 

 

8.             The respondent admitted that the purpose of the new contract was to change the claimant’s contract of employment with him to being a self-employed contract and accepted that the claimant would no longer be entitled to previous contractual benefits like sick pay and holiday pay.  The respondent indicated that he believed that this was the only means he had of keeping the business going but strenuously denied that he had dismissed the claimant. However the Tribunal saw no evidence that the company, Excellent Edges was in financial difficulty and the Tribunal found from the respondent’s evidence that the company was still a going concern.

 

9.             The claimant was shocked at the respondent’s proposal at the meeting on 18 May.  The claimant was in no doubt that she was no longer employed by the respondent and that she would not be entitled to a basic salary, sick pay or holiday pay and that she would thereafter have to pay all her own expenses.  The claimant stated that she was devastated and extremely upset at this meeting.

 

10.         The claimant went home on 18 May 2009 and contacted a former employee of Excellent Edges Limited, Mr Wilson McKendrick, her previous line manager.  He had left Excellent Edges Limited and was now working in competition with the company. Mr McKendrick had previously offered the claimant a job while she was working in Excellent Edges Limited but as the claimant had then secured a pay rise on the basis of this offer the claimant had at that stage decided to stay.  However, on the 18 May 2009 Mr McKendrick again offered the claimant an opportunity of working for him.   This opportunity was as a self-employed sales representative on 20% commission.

 

11.         In the event claimant decided to try the new arrangement with Excellent Edges, under the self-employed contract, for a month.  However, when the claimant suggested to the respondent that she would try the new arrangement for only a month the respondent told her that she could take it or leave it. The claimant signed the new contract on 19 May 2009.

 

12.         The claimant stated that her reasons for signing the new contract were twofold. The claimant stated that one of her reasons for doing so was so that she could benefit from an income protection insurance policy that would be available to her at the end of the month. Further and in spite of her option to work for Mr Mc Kendrick the claimant stated that she had decided to continue working for the respondent from

          18 May 2009 until her ultimate departure on 3 June 2009 because she was afraid    that the respondent would not pay her wages at the end of May. 

 

13.         The claimant indicated that she finally left the respondent because she had lost her trust in the respondent and did not want to continue working for him on a self-employed basis. The claimant left the respondent’s employment on 3 June 2009.  

 

14.         The claimant’s new employment rates were less than she earned with Excellent Edges Limited.   She earned £1,283.00 pounds gross per month instead of £1,400, and £1,026.40 nett per month (nett £265.56 per week), instead of £1,150.80 nett per month (£236.86 nett per week).  The claimant lost the use of a company car and receives no expenses to cover fuel, car tax or car insurance. 

 

The Law

15.         Article 126 of the Employment Rights (Northern Ireland) Order 1996 provides an employee with the right not to be unfairly dismissed by his employer.  Article 130 of the same order indicates that any dismissal of an employee is fair if the employer shows that the reason for the dismissal is a reason following within Article 130.

16.           Article 130 states at paragraph (2) a reason falls within this paragraph if it –

(a)       relates to the capability or qualifications of the employee performing work of
           the kind which he was employed by the employer to do,

 

(b)      relates to the conduct of the employee,

 

(c)      is that the employee was redundant or,

 

(d)      is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of the duty or restriction imposed by or under a statutory provision. 

 

12.   Article 130(4) states where the employer has fulfilled the requirements at paragraph 1, the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –

 

(a)           depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee and;

 

(b)           shall be determined in accordance with equity and the substantial merits of the case.

 

           Article 130(A) of the same Order provides that an employee shall be regarded as dismissed where the statutory procedures (dismissals and disciplinary procedures) apply and where these have not been completed and where the failure so to complete them lies with the employer.

 

The Tribunal’s Conclusions

 

13.    The Tribunal concluded that the respondent had ended the claimant’s contract of employment by offering her a new contract as a self-employed contractor on 18 May 2009.  

 

 The Tribunal concluded that the claimant had thus been dismissed by the  respondent. However in light of the facts found the Tribunal could not conclude that the claimant’s dismissal fell within the terms of Article 130(2) of the Order.

 

The Tribunal also concluded that the meeting to which the claimant had been invited did not constitute any part of a statutory dismissal procedure and that claimant had thus been additionally unfairly dismissed by the respondent by virtue of Article 130(A).

 

Compensation

 

14.  The Employment Rights (Northern Ireland) Order 1996 and the Employment    (Northern Ireland) Order 2003 make provision at Articles 130 and 152 for the payment to the claimant of compensation where the claimant has been unfairly dismissed. The following compensation has been calculated in accordance with those provisions.

 

Basic Award

 

15.    The claimant worked for the respondent from 30 0ctober 2006 until 18 May 2009, two complete years of service, during which time she was not below the age of 22 or above the age of 41 thus the basis award is  £323 (gross pay) x 1(week)  x 2(years) = £646

 

Compensatory Award

 

16      Immediate Loss

Loss of salary from 30 May to 10 June 2009 = £265 (nett) x 1.5 (weeks)=  £397.50             

 

Loss of commission from 30 May 2009 until 10 June 2009

(based on a monthly average of £150 per month, 34.61 per week) =            £51.92

                                                                                                                                   

           Loss of benefit of company car (to date of hearing) =                               £1,706.25

 

           Reimbursement of car insurance excess paid by claimant =                       £100.00

 

           Loss of difference in earning between date of dismissal and date of hearing

           = £28.70 (nett per week) x 29 weeks =                                                        £832.30                                                              

 

Loss of statutory rights =                                                                               £500.00    

 

No future loss claimed.

 

          Total compensatory award =                                                                      £3,587.97

                                                                                                                                

Uplift

 

17.     Under the Employment (Northern Ireland) Order 2003, where a tribunal finds that  the employer has failed to comply with the statutory dismissal procedures the Tribunal may increase the compensatory award to an employee by at least 10% and up to 50% . In this case the Tribunal decided to uplift the award to the claimant by 40% on the basis that the respondent had the ability to compile the complex new contract, was aware that the new arrangement would have the effect of terminating the claimant’s contract of employment and that he had yet failed to do what was well within his competence, namely, to research the situation on the internet or to seek advice from the Labour Relations Agency or a solicitor.

         

 

          Total compensatory award =                                                               £5,022.89

                                                                                                                        

Total Award £5,008.40 + £646 =                                                          £5,668.99

                                                                                                                         

 

18.   Accordingly the Tribunal orders the respondent to pay compensation to the claimant in the sum of £5,668.89  

   

19.       This is a relevant decision for the purposes of the Industrial Tribunal (Interest) Order

   (Northern Ireland) 1990

 

 

 

Chairman:

 

Date and place of hearing:         5 January 2010 and 1 February 2010, Belfast.

 

Date decision recorded in register and issued to parties: