Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2012/01107_10IT.html
Cite as: [2012] NIIT 01107_10IT, [2012] NIIT 1107_10IT

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THE INDUSTRIAL TRIBUNALS

CASE REFS: 1107/10

1152/10

CLAIMANT: Harry Harrison

RESPONDENTS: 1. Randox Laboratories Limited

2. Randox Laboratories India Private Limited

DECISION

The unanimous decision of the tribunal is that the claimant was an employee of the first respondent and was unfairly dismissed by it. The claimant is awarded the sum of £71,818.00 in compensation for unfair dismissal and breach of contract.

Constitution of Tribunal:

Chairman: Mrs Ó Murray

Members: Mr I Foster

Mrs T Hughes

Appearances:

The claimant was represented by Ms S Bradley, Barrister-at-Law, instructed by Harrisons Solicitors.

The first respondent was represented by Mr J Algazi, Barrister-at-Law, instructed by Ms Torrens of Randox Laboratories Ltd.

The second respondent did not appear and was not represented. No appearance was entered by the second respondent.

The Claim

1. The claim was, firstly, for unfair dismissal and, secondly, for breach of contract in relation to unpaid wages and pay in lieu of notice.

The Issues

2. The first respondent denied liability on the basis that it was not the claimant’s employer at the relevant time as the claimant had ceased employment with it and had taken up an offer of an employment contract with the second respondent. It was alleged that this was the contract in force at the time of termination of the claimant’s contract.

3. The claimant alleged that his employment contract with the first respondent subsisted until his dismissal and that the only variation made on 17 May 2009 to his contract was that his pay would be paid via the second respondent.

4. The issues for the tribunal were therefore as follows.

(1) Was the claimant employed by the first respondent or by the second respondent.

(2) If the claimant was employed by the first respondent was he unfairly dismissed by it.

(3) If he was unfairly dismissed by the first respondent were the statutory dismissal procedures liable to be followed. If they applied and were not followed should a statutory uplift be applied to the compensatory award and if so what percentage should be applied to it.

(4) Did the claimant by his conduct contribute to his dismissal and should any compensation awarded be reduced by a percentage to reflect that fact.

(5) Did the claimant take steps to mitigate his loss following his dismissal.

(6) If there was any flaw in the procedures adopted by the first respondent, would it have made no difference and the claimant was therefore not unfairly dismissed at all (in accordance with Article 130A(2) of ERO) or should a Polkey reduction be applied to the compensatory award to reflect the chance that the claimant would have been dismissed even if procedures had been followed.

(7) If the claimant was employed by the first respondent at the time of termination of his contract, does the tribunal have jurisdiction to entertain the claim in view of the territorial scope of the unfair dismissal provisions.

(8) If the claimant was employed by the second respondent at the time of termination of his contract does the tribunal have jurisdiction to entertain such a claim and if so should an award of compensation be made against the second respondent for unfair dismissal and breach of contract.

Sources of Evidence

5. The tribunal heard evidence from the claimant and Miss Kim Nesbitt who formerly worked in the HR Department of the first respondent. For the first respondent the tribunal heard evidence from Ms Linda Magee of the HR Department; Mrs Pauline Bradley, Finance Manager; and Ms Ferguson, the Senior Manager with the first respondent. Ms Ferguson was also a Director of the second respondent and a manager in that company. The tribunal also had regard to the witness statements, the oral evidence and the documentation to which it was referred.

The Law

6. Both sides provided very helpful and comprehensive written submissions. In view of our factual findings set out below whereby we have concluded that the claimant was employed and dismissed by the first respondent, several areas of the law outlined in the written and oral submissions are no longer relevant to case and we therefore do not propose to set them out in this decision.

7. We took account of all of the written and oral submissions when applying the law to the facts found.

8. The main principles relevant to this case, derived from the legislation, Harvey on Industrial Relations and Employment Law and the case law, are set out below.

9. In Harvey Division A at paragraph 458 relating to termination of an employment contract by agreement it states as follows:

“The parties having agreed to make a contract can at anytime agree to unmake it; each may agree to release the other from further performance, and the contract is thereby discharged. The courts will, however, be slow to find that the contract has been terminated in that way unless the evidence is clear because the employee’s statutory rights to redundancy payments and to compensation for unfair dismissal depend upon his being dismissed as defined and consensual termination is not ‘dismissal’…”

10. In Harvey at Division H paragraph 631-651 it states as follows:

“There is another line of cases whose authority is unaffected by Globe Elastic and which are sometimes regarded as cases of estoppel. But they are dealing with a rather different situation: where the employee believes he or she is employed by A, but by an arrangement between A and B to which the employee is not privy, is treated as being employed by B. The employee may still assert that A is the real employer. It is not a true case of estoppel. The employee’s contract of employment with the first employer cannot be varied without the employee’s knowledge and consent … The better analysis is that the employee is in law and in fact employed by A throughout, whatever A and B may deemed to be the position as between themselves.”

11. Harvey then goes on to cite the principle from a case of Smith v Blanford Gee Cementation Company Ltd [1970]3 All ER 154 where an employee signed a document accepting employment with another company. He understood the contents of the document but thought that it was just “for the sake of form”. His former employer continued to behave as his employer and it was found that it could not deny that it was were the employee’s employer.

12. The Employment Rights (Northern Ireland) Order 1996 (ERO) provides at Article 126 that an employee has the right not to be unfairly dismissed. If an employee is dismissed it is for the employer to show the reason for dismissal and that it falls within one of the potentially fair reasons for dismissal. If the employer shows that the employee was dismissed for a potentially fair reason, it is for the tribunal to decide whether dismissal in the circumstances of the case was fair or unfair. The equivalent of A126 ERO in GB is S94 referred to in the authorities cited below.

13. The task for us is to construe the terms of the contract, if any, between the claimant and the first respondent at the time of termination of his contract by looking at the conduct of the parties and any relevant documents.

14. The tribunal has jurisdiction to award compensation in respect of sums outstanding upon termination of contract in line with the breach of contract jurisdiction of the tribunal. It was agreed by the first respondent that, if the tribunal found that it was the claimant’s employer at termination, the tribunal had jurisdiction to determine the breach of contract claim.

15. The statutory dismissal procedures are outlined in the Employment (Northern Ireland) Order 2003 which provides that in the event of non-completion of the statutory procedures a tribunal must increase the compensatory award from between 10% and 50% if the respondent is at fault. The respondent relied on Regulation 3 of the Order to argue that the SDP did not apply at all. In circumstances where a claimant is sacked for gross misconduct, the modified procedures apply. If a claimant launches proceedings before the modified procedure is initiated no SDP applies. The key issue for us is to determine whether or not the claimant was dismissed for gross misconduct. If we do not accept that the claimant was sacked for gross misconduct the full SDP applies which requires the employer to follow a three step procedure. Essentially there are three steps in the minimum disciplinary and dismissal procedure. Step one involves the employer writing to the employee setting out the grounds for the proposed action and inviting the employee to a disciplinary meeting to discuss the matter. Step two involves holding a meeting and notifying the employee of the decision and the right of appeal. Step three involves inviting the employee to an appeal meeting if the employee avails of the appeal process and notifying the employee of the appeal decision.

16. One key issue in this case relates to the jurisdiction of the tribunal to deal with the claimant’s claims. We have taken account of the detailed submissions in relation to all the relevant case law. Both sides’ written submissions went into some detail on the line of authorities dealing with jurisdiction. It was common case however that the two leading cases in this area are Lawson v Serco [2006] UKHL 3 and the recent case of Ravat v Halliburton Manufacturing and Services Ltd [2012] UKSC 1 which was determined by the Supreme Court in February 2012.

17. In Lawson the general rule was stated to be that the place of employment is normally decisive but it was recognised that there were circumstances where employees who worked or were based abroad could come within the scope of British labour legislation. This was due to the open-ended language of the relevant provision the Northern Ireland equivalent of which is Article 126 of ERO. Lord Hoffman then went on to outline characteristics of the relationship which could take cases out of the general rule that the place of employment was decisive. For a period, there was some debate as to whether the Lawson categories were exhaustive or merely illustrative. This confusion was clarified by Ravat which found the Lawson categories to be illustrative and not exhaustive.

18. Paragraph 13 of Ravat outlines Lady Hale’s approach in Duncombe v Secretary of State for Children, Schools and Families (No2) [2011] ICR1312 as follows:

“It is therefore clear that the right will only exceptionally cover employees who are working or based abroad. The principle appears to be that the employment must have much stronger connections both with Great Britain and with British employment law than with any other system of law. There is no hard and fast rule and it is a mistake to try and torture the circumstances of one employment to make it fit one of the examples given, for they are merely examples of the application of the general principle.”

19. The case of those who were truly expatriate because they not only worked but also lived outside Great Britain required an especially strong connection with Great Britain and British employment law before an exception could be made for them. However, it did not follow that the connection that had to be shown in the case of those who were not truly expatriate because they were not both working and living overseas had to achieve the high standard that would enable one to say that their case was exceptional.

20. Paragraph 29 of Ravat states as follows:

“But it does not follow that the connection that must be shown in the case of those who are not truly expatriate, because they were not both working and living overseas, must achieve the high standard that would enable one to say that their case was exceptional. The question whether, on given facts, a case falls within the scope of Section 94(1) is a question of law, but it is also a question of degree. The fact that the commuter has his home in Great Britain, with all the consequences that flow from this for the terms and conditions of his employment, makes the burden in his case of showing that there was a sufficient connection less onerous. … The question of law is whether Section 94(1) applies to this particular employment. The question of fact is whether the connection between circumstances of the employment Great Britain and with British employment law was sufficiently strong to enable it to be said that it would be appropriate for the employee to have a claim for unfair dismissal in Great Britain.”

21. It is clear from the Ravat decision that the assessment of the issue of jurisdiction requires the tribunal to look at a multiplicity of factors and to determine the legal and factual position from the accumulation of detail.

22. In the Ravat case the employer was a UK company based in Scotland which supplied tools, services and personnel to the oil industry. Mr Ravat had worked in Libya but lived in Great Britain. He travelled to Libya for work for 28 days followed by 28 days at home. The employer paid his travel costs. He was paid in sterling and paid UK Income Tax and National Insurance on a PAYE basis. Before commencing work in Libya the employer had assured him that he would have the full protection of UK employment law while he worked abroad. Mr Ravat was later made redundant and the procedures leading up to his dismissal and relating to his appeal against dismissal all took place in the Scottish offices of the employer.

23. In summary the claimant’s submissions on the jurisdiction point were as follows:-

(1) That the claimant was not an expatriate employee but rather, the Lawson category which most closely fitted the claimant’s position was that of Mr Croft the peripatetic employee as the claimant in this case was based in Northern Ireland with periods working outside Northern Ireland.

(2) The position of Mr Ravat was similar to the claimant in that he was a UK commuter. The claimant in this case lived in Northern Ireland and travelled overseas and worked in Northern Ireland and India for a subsidiary of the first respondent.

(3) The claimant was assured that the only change to his terms and conditions related to the way his salary would be paid. This was similar to the type of assurance that Mr Ravat was given by his employer.

(4) That all the circumstances in this case meant that the claimant had a sufficiently substantial connection with Northern Ireland and Northern Ireland employment law.

24. The first respondent’s submissions on the jurisdiction point in summary were as follows:-

(1) That the claimant was an expatriate employee and was not a peripatetic employee and therefore the base test was not an appropriate one to apply to the claimant’s situation.

(2) That the terms and conditions of the contracts between the claimant and the first respondent envisaged an employment split between Northern Ireland and India. The contract between the claimant and Randox NI states, where relevant, as follows:-

“This statement dated 10 March 2009 sets out the particulars of main terms of employment under which Randox Laboratories Ltd, 55 Diamond Road, Crumlin, Co Antrim, BT29 4QY employs Richard Harrison.

…

Place of work

Your normal place of work is split between the address above and Randox India, but you may be required to travel between or work at any of the Company’s other locations as the Company may from time to time require.

In addition, you will be expected to undertake such travel as is necessary to fulfil your job to the satisfaction of the Company. This will include travelling across the globe as determined by the needs of the business.”

(3) That the claimant’s position did not fit easily into the categories outlined in Lawson and Ravat and that the claimant failed to establish sufficient connection with Northern Ireland to enable the tribunal to claim jurisdiction.

Findings of Fact and Conclusions

25. The tribunal found the following facts and applied the law to the facts found in order to reach the following conclusions.

26. For ease of reference the first and second respondents will be referred to below as Randox NI and Randox India respectively.

General

27. We were not satisfied with the evidence given by the witnesses for Randox NI in several key respects, examples of which are given below. For this reason where there was a conflict in the evidence we accepted the claimant’s account in preference to that given by Randox NI. There is clearly a great degree of bitterness between the parties in this case and each side staunchly and forcefully put its side of the case. In particular we do not accept the proposition put forward by Mr Algazi that, for us to find for the claimant on the facts, we would have to accept that a longstanding, premeditated conspiracy on the part of the respondents, involving forgery of documents took place. On the contrary, our conclusion from all the facts and from our assessment of the demeanour and veracity of all the witnesses is that what happened essentially (as set out in detail below) was, that it became convenient and expedient for the first respondent to try to characterise an administrative change to payroll terms and conditions, as a substantive change of employer when it appeared to suit its purpose after the relationship soured for some reason.

28. Miss Magee maintained that she had no involvement in anything to do with the claimant as he was an Indian employee. We find it incredible that the Global Head of HR would know nothing about the reason for the claimant being sacked and that she would have no involvement in the letter of dismissal particularly as she frequently visited the Indian operations in her role as global head of HR. She also had a role with Indian employees in terms of explaining their contracts and in line managing Tiji Paul the HR manager based in India. This refusal to accept that she had any connection with the claimant tainted her credibility for us.

Work Pattern

29. The claimant was engaged by Randox NI on 25 May 2008 as a consultant with the title of International Business Manager. At that stage he was not an employee.

30. From the outset the claimant’s remit was to deal with business in India and to this end he was to spend three months in India with three weeks in Northern Ireland on a rotational basis. It was common case that throughout the period relevant to these proceedings the claimant was engaged solely on business relating to India.

31. The claimant’s pattern of work was changed on 16 June 2008 by verbal agreement with Dr Fitzgerald to a pattern whereby he worked three weeks in India followed by six weeks in Northern Ireland. Whilst some of the first respondent's witnesses cast doubt on the pattern agreed with the claimant and the claimant was strongly challenged on this in cross-examination, his line manager Ms Ferguson agreed in cross-examination that, in practice, this was his pattern of work. The claimant's case is also supported by the following:

(1) Dr Fitzgerald did not attend to give evidence to contradict the claimant’s evidence on the verbal agreement.

(2) The claimant’s table of dates in India and Northern Ireland drawn from his passport showed a pattern which corresponds more closely to the three- weeks/six-week pattern rather than the three-week/three-week pattern stipulated in the standard employment contract which the claimant later signed.

32. The claimant became an employee of Randox NI from 1 January 2009 and signed a contract in March 2009 which, whilst it stipulated a three-week/three-week pattern, did not, in practice, change the pattern which he had established following the verbal agreement with Dr Fitzgerald of three weeks in India and six weeks in Northern Ireland.

33. It was common case that the claimant performed his duties so well that he earned a £5,000 discretionary bonus for the approximate six-month period he was a consultant. The claimant’s performance as an employee was so well-regarded that he earned a discretionary bonus of £10,000 for the year 2009 and this was paid on 12 January 2010. We accept the claimant's case that this related to the whole of 2009 and thus covered his period as an undisputed employee of Randox NI and his period on the payroll of Randox India given that he received a bonus of £5000 to cover the six months of his employment with Randox NI in 2008. We do not accept Ms Ferguson’s evidence that the £10,000 related only to the six months with Randox India. We accept the claimant’s evidence that it covered the whole of the year 2009 and thus covered the period when he was on both payrolls.

Company structure

34. We were presented with documents showing the management structure of Randox India. Whilst Miss Magee denied any responsibility or connection with the Randox India her name appears on the management structure as Human Resources Manager and she agreed that, whilst she was not an employee of Randox India, she was the line manager for the Human Resources Officer who was an Indian employee. The fact that Mr Harrison’s name appeared on that structure document thus does not necessarily indicate that he was an employee of Randox India. The document also illustrates to us the blurred lines between the two companies. This is significant in the context of the claimant’s case where he was unaware of all of the arrangements within Randox NI and between it and Randox India in relation to his position.

35. Randox Laboratories Limited (Randox NI) is a company with numerous branch offices and associated companies in many different countries in the world. Randox Laboratories Limited comprises Dr Peter Fitzgerald, the majority shareholder with 98% of the shares and his parents who hold 2% of the shares. Ms Ferguson was the Senior Manager in that company, the Global Finance Manager was Pauline Bradley and the Global Head of HR was Linda Magee.

36. Randox India Private Limited (Randox India) comprised two directors, namely Dr Fitzgerald and Ms Ferguson, and all the shares were owned by Randox Laboratories Limited. It was therefore a wholly-owned subsidiary of Randox Laboratories Limited with Dr Fitzgerald as Managing Director and Sonya Ferguson as Senior Manager. Pauline Bradley of Randox NI authorised all financial figures for that company before they would go to the Indian authorities. As stated above, Miss Magee had frequent involvement in the operation of Randox India and line managed its HR Manager.

The meeting of 17 May 2009

37. This is the key meeting on which so much hinges in this case. We have assessed all the evidence both oral, written and documentary and prefer the claimant’s account of what took place.

38. Specifically, we find that the attitude of Ms Ferguson to the proceedings generally and her refusal to give information (which was clearly within her knowledge) to assist the tribunal tainted her credibility for us. She maintained that on 17 May 2009 she attended the meeting and dealt with the claimant purely in her capacity as Director and Senior Manager of Randox India and that she most definitely was not there in any other capacity. In those circumstances we do not accept the argument put forward in submissions that the sequence of events on 17 May should be interpreted by us as a consensual termination of the claimant's contract with Randox NI.

39. We accept the claimant’s case that he was called to a meeting at short notice by Ms Ferguson and Pauline Bradley and was instructed that, for the respondents’ tax efficiency purposes, his pay would thenceforth be paid through Randox India. The claimant was assured that the changes proposed related only to the method of payment and that his take-home salary would remain unchanged and his other terms and conditions would remain unchanged. The claimant accepted this instruction because it only amounted to a change in the method of payment of his salary.

40. Essentially what took place was an administrative change involving a new way of paying the claimant’s salary which necessitated him moving onto the payroll of Randox India. We do not accept that this amounted to a substantive change whereby his employment contract with Randox NI ended and his contract as an employee moved to that of Randox India. Our principal reasons for so finding are set out below.

41. The following remained unchanged for the claimant: his title of International Business Manager; his salary; his job description; his line manager; his pattern of visits to India; his office base at NI HQ; his HQ address on emails; his designation as a representative of “Randox Laboratories” (with an address at Randox NI HQ) on applications for funding to Invest NI for trade missions to India.

42. Whilst the meeting of 17 May 2009 effected the change, it was initially proposed that the claimant would be treated as an employee of Randox India for payroll purposes as from 1 May 2009. Whilst it transpired for other reasons that this was put back to 31 May 2009 it remains the case that the proposal was that the change take effect before the date on which it was discussed with the claimant. This lack of a clear line between the ending of one contract and the beginning of another points to an administrative change rather than a substantive change.

43. The claimant was given no notice of the meeting with Ms Ferguson and Pauline Bradley nor did he know the reason for the meeting. No notes were taken of the meeting and no email or letter confirmed the outcome of the meeting. No matter how consensual any change in contract from one employer to another might be, we would have expected some form of written record of what was agreed given (on Randox NI's case) the fundamental nature of such a change. The lack of any documentation, far from undermining the claimant’s case, supports it, in our judgement, as this underlines the low-key, administrative nature of the change.

Method of Payment of salary

44. From June to August 2009 the claimant was paid by Randox India into his UK account and his address on the necessary Telex setting this up was c/o Randox NI HQ rather than the office in India. We find that this supports the claimant’s case.

45. In September 2009 the claimant signed papers presented to him by the Indian HR staff to have his salary paid through an Indian account in the claimant’s name and then into his UK account. This was done for reasons to suit both companies.

46. In June 2009 the claimant queried a deduction from his salary which it transpired was an Indian requirement to contribute to a “Provident Fund” in India. The claimant asked if the shortfall would be made up by India or HQ. The response from Ms Ferguson reassured the claimant and stated as follows:

“Harry,

Your shortfall comes from the fact that Inland Revenue in the UK
was not using the correct tax code. This means you will owe the money to tax. As you also know an additional 10% representing £233.00 is put into a government fund in India each month which you will collect as a lump sum when your duties in India are complete. You are in fact better off as Inland revenue in UK will come looking for underpayment in due course.

Sonya.” (emphasis added)

47. We find that this exchange of emails supports the claimant’s case that the change in his method of payment was an administrative measure. The highlighted part of the email supports the claimant’s case that it was envisaged by both sides that when his work in India ended the claimant would be posted elsewhere by Randox NI and thus supports his case that he was not an employee of Randox India.

Documents

48. The only documentation received by the claimant following the change which took effect from 31 May 2009, related to his pay and payroll. No documents were sent to him relating to any change in his employer. This underlines the administrative nature of the change.

49. A number of other documents were presented in evidence to the tribunal and were provided for the first time to the claimant in the course of the discovery process. These documents related to internal processes in Randox NI which processed the claimant as a “leaver” from that organisation. These were stated to be the responsibility of Training Branch so Miss Magee of HR was unable to assist us in relation to them. This supports the claimant’s case that this was an administrative function and was not a fundamental change for the claimant because HR were not involved in it. Those documents also show that on the claimant’s notional date of leaving namely 31 May 2009, the claimant was owed 7.5 days holidays. If the claimant had left Randox NI's employment we would have expected him to receive payment for the outstanding holidays and a new holiday entitlement with Randox India. This did not happen as the claimant's entitlement was unaffected and he appears to have carried holidays over to Randox India. This also points to the claimant’s contract with Randox NI subsisting throughout the relevant period.

Benefits of change in terms and conditions

50. The claimant was told that the change to the way he was paid was essentially a tax-efficient measure. It was clear from the evidence that Randox India had had difficulties and that was one of the reasons why the claimant had been brought in in the first place. It was common case that Randox India continued to have difficulties and had sustained losses and the claimant was fully aware of the “fragile” nature of the Indian business. In these circumstances we do not believe the first respondent that at the meeting on 17 May, the claimant was offered a new employment contract with Randox India and that he accepted that without any qualms.

51. Essentially there was nothing in it for the claimant to accept a contract with Randox India in view of firstly, the fragile nature of the company; secondly, the fact that he would receive no more salary; and thirdly, he would place himself in a more precarious position if the company went under than if he remained connected to the Randox NI by his employment contract. We do not accept that the claimant made such a bad bargain but, rather, we accept his case that he agreed to a fait accompli that his contract with Randox NI be varied so that his pay would emanate from Randox India for reasons beneficial to the respondents.

52. In contrast the advantage for the respondents in changing the way the claimant was paid was that it was more tax efficient but, more importantly, it was more convenient for the respondents because the claimant would be able to sign documents for the Randox India without a power of attorney being in place. Prior to the change in payroll, signing legal documents for the company was a more complicated, expensive and long-drawn-out process.

53. Miss Bradley’s evidence was that the claimant needed to be an employee of Randox India so that someone was present there with the legal power to sign documents and so that someone was there to manage the business properly. We do not accept that the claimant needed to be an employee to manage the office as his pattern of visits remained unchanged after May 2009 and the bulk of his time was still spent in NI. Miss Bradley also maintained that it was a “ridiculous” suggestion that there could be any tax advantage to changing the claimant to the Indian payroll. She then conceded that there was some monetary advantage in relation to Randox India saving some interest. It was also accepted by the respondent that Randox India had to pay a management fee to Randox NI for the claimant’s services when he was not on their payroll, and this was heavily taxed in India. The change in the claimant’s terms and conditions was thus to the financial advantage of both companies.

Indian contracts

54. In November 2009 new contracts were issued to the Indian staff but none was issued to the claimant. It is significant to us that the list of Indian staff (which we accept was received by the claimant in December 2009) listed all the Indian staff with their joining date and it included staff who joined in 2009 after the date the claimant allegedly became an employee, but omitted the name of the claimant.

55. We do not accept the first respondent's case that it was for the claimant to draft, or have drafted, his own contract with the Randox India. The respondent witnesses accepted that legal or HR functions were not within the claimant's remit. We do not accept that the fact that the claimant co-ordinated the signing of contracts by the Indian employees meant that he would be responsible for the contents of his own contract

56. It was clear from Ms Ferguson’s evidence that correct processes in terms of signing authorities were very important to her and to both companies. We do not accept that the respondents would have let a situation subsist whereby the claimant was required to have a contract in place for his new employer in India but he was allowed to let months pass without such a contract being in place. We infer from this that the claimant was not told to draft or arrange his own contract. When pressed on why the claimant was permitted to have no contract in place Miss Bradley stated that it was enough that the claimant was on the Indian payroll. In addition there are no documents showing the claimant being pressed for his contract. We infer from this that the contractual issue was not important to the first respondent as the change in the claimant’s terms and conditions was for administrative convenience and to save the companies money.

Clocking

57. The claimant stopped clocking in at the Northern Ireland base after his pay started to emanate from India. We do not regard this, as of itself, pointing towards him ceasing to be an employee of Randox NI in circumstances where an independent contractor had been required to clock in to ensure an accurate record of his attendance. We accept that the clocking-in procedure was primarily related to payroll issues and, as the claimant no longer was on the Randox NI payroll, it was not a requirement for him to clock in. Ms Ferguson, an employee of Randox NI, also did not require to clock in.

P45

58. The claimant received a P45 in July 2009. We accept the claimant’s evidence that he raised a query in relation to the P45 as he clearly had a concern about the content of it in relation to his status and he was reassured that it was necessary for payroll purposes. Whilst the first respondent's case proceeded on the basis that the P45 was a definitive indication that the claimant no longer was an employee of Randox NI, it was conceded that P45s were issued when any employee changed payroll. This point was only conceded by the first respondent after we heard evidence from Miss Nesbitt whom we found to be a credible and reliable witness. This is another example of a point which was forcefully argued by Randox NI but was varied when the claimant’s evidence challenged it. Randox NI’s evidence then was that, if it was only a change in payroll that was involved, the P45 would not be sent to the employee. This point was not put to Miss Nesbitt and we do not accept Randox NI’s evidence on this point.

Payslips

59. The claimant received no payslips from June 2009 to January 2010. He therefore was not on notice that his payslips were issued by Randox India. It was strongly put to the claimant that he did in fact receive the payslips, but in subsequent evidence from the respondents, it was clear that the payslips were not sent to the claimant but, rather, he could have accessed them on the computer system. This is another example of Randox NI conceding strongly argued points when challenged on them and contributed to our adverse view of its witnesses’ credibility.

Meetings in January 2010

60. On 11 January 2010 the claimant gave a presentation at Randox NI HQ, to Dr Fitzgerald, Ms Ferguson and other Senior Managers, which related to an overview of the previous year’s business in India and a business plan for the following year. The claimant was praised for his efforts in India and for his presentation.

61. On 18 January 2010 the claimant had to present figures to the Senior Management Team at HQ. It was common case that there was tension at the meeting on 18 January 2010. It was also common case that Ms Ferguson was annoyed at the claimant in relation to the accuracy of the figures presented. We find that, at the meeting on 18 January 2010 there was an altercation between Ms Ferguson and the claimant whereby she reacted abusively to inaccurate figures which had emanated from the Indian staff and were presented by the claimant. The claimant felt shocked and abused due to the severity of Ms Ferguson’s reaction to the figures he was presenting. In addition the claimant was inexplicably denied the help of the Indian finance manager who was at the meeting (and could have helped him with the figures) as she was said to be “on HQ business”. The claimant was told to present revised figures the next day.

62. On 19 January 2010 Ms Ferguson met the claimant and told him that he would have to adopt a pattern immediately of three weeks in India and three weeks in Northern Ireland. Whilst the claimant protested at this citing his back problems, the extensive travel and the likely effect on his family life, at no stage did the claimant refuse to comply. On that same day the claimant appealed to Ms Ferguson but was told in strident terms that he had until the next day to make a decision as there was no alternative to the new pattern.

63. The claimant left work early because of his shock at the way he was treated. Before leaving, he tried to use his phone to find that it had been cut off, as had his access to the internet, on the orders of Ms Ferguson. He then went off sick because of his back problems which had resulted from an accident at Randox NI premises in December 2009 and which ultimately led to the claimant requiring surgery on his back in early 2010 and on a subsequent occasion.

64. When at home he tried to access his work email but assumed that there were problems with it because he could not access it. What he did not know was that his email access had also been cut off.

65. What the claimant also did not know was that a decision had been taken on 19 January to dismiss him with immediate effect. The claimant was oblivious to this and believed that he was on sick leave, was submitting sick lines, was nevertheless trying to work from home and was emailing the company to find out what was wrong with his computer access.

66. The claimant received a letter of dismissal from Randox India dated 26 January 2010 advising that he was sacked as at 19 January 2010. No reason was given in the letter of dismissal for the dismissal. The letter emanated from Randox India but had been signed by Ms Ferguson in Northern Ireland.

Dismissal

67. Something clearly went badly awry in the relationship between the claimant and Randox NI between 11 January and 18 January 2010 which led to him being summarily dismissed. We do not know the specific reason for the claimant being dismissed as none was put forward in any of the documentation to do with the claim and no information was given to us in evidence-in-chief by Ms Ferguson.

68. In cross-examination for the first time Ms Ferguson stated that the claimant was sacked for gross misconduct indicating that at a meeting in January 2010 the claimant “could not present sales figures for India” and she found this “very worrying”. When pressed for further details she refused to elaborate stating that she was acting on advice of lawyers in India and, as the claimant was sacked by Randox India, she “could not assist” us as this was a “private matter”.

69. We found the attitude of Ms Ferguson most peculiar. Whilst Ms Ferguson maintained at all times that she “wore her India hat” and therefore could not or would not assist us, the fact remained that she was present at the key meetings of 11, 18 and 19 January 2010, she appears to have taken the decision to sack the claimant and she would not put forward any information to explain that decision until she alluded to unspecified gross misconduct when she was being cross-examined. Ms Ferguson knew that one of the first issues for us to decide was whether the claimant continued to be employed by Randox NI throughout and if we found for him on that point, the explanation for his dismissal was a key issue in the case. Ms Ferguson’s approach tainted her credibility for us.

Email 21 January 2010

70. The claimant sent an email on 21 January 2010 to Linda Magee of HR which Mr Algazi submitted is fatal to the claimant’s case. The email states as follows:

“Dear Linda,

In response to the significant and unreasonable change in the terms of my contract, discussed during the meeting on 19^th January 2010, I request that these new terms and conditions are reconsidered. Although I do not have a formal written contract with Randox Laboratories Ltd, my terms and conditions have been implied by the customs and practices currently in place and the acceptable precedent that has been set over the last 20 months.

Furthermore, I raised this point with Dr Peter Fitzgerald during my meeting with him on the afternoon of 19^th Jan 2010 and informed him that these significant changes to my contract were not conducive to my family life and should have been discussed with me before I was instructed to implement the new travel regime. I believe these changes seriously undermine the relationship of trust and confidence that existed between Randox and me and this has been exacerbated by isolating me through the freezing of my email account and telephones.

Although I am currently taking sick leave due to sciatica, which resulted from slipping on the car park at Randox’s Ardmore site, I can make myself available for further discussions by email or telephone.

With kind regards,

Harry Harrison”

71. Mr Algazi invited us to interpret the sentence of the email highlighted above to mean that the claimant admitted that he had no contract with Randox NI. We do not accept that submission. The email of 21 January 2010 refers to the previous 20 months and the terms and conditions in force during that period. This covers the period right back to when the claimant first started as a consultant until the end of the period the claimant was on the payroll of Randox India. The common thread running through the claimant’s periods as consultant and employee was the pattern of work, that is, the six-week/three-week pattern. The written contract had been varied by custom and practice in relation to the work pattern. Read as a whole, the email refers to the proposed change of the claimant’s work pattern especially as the context of the email relates to the meeting on 19 January where the primary bone of contention related to the work pattern.

SDP

72. The claimant was sacked summarily by the first respondent on 19 January 2010, and the modified procedure would have applied if the respondent had grounds for sacking him without notice. We were given no evidence as to any gross misconduct committed by the claimant. The bare allegation that the claimant failed to present adequate sales figures at one or two meetings does not amount to gross misconduct. The question of whether the claimant should change his work pattern to three-week/three-week (which the claimant did not refuse) was not resolved and did not amount to gross misconduct. We therefore find that the modified procedure did not apply and the full procedure did apply.

73. It is clear that no procedure whatsoever was followed, the first respondent is therefore in breach of the statutory dismissal procedures and the dismissal was thus automatically unfair.

Uplift on compensatory award

74. In view of the flagrant breach of the procedures we believe this is a case where a 50% uplift on the compensatory award is warranted. We do not accept that Ms Ferguson acted in good faith believing the claimant to be an employee of Randox India for all purposes other than payment of salary. For some reason Randox NI wanted to sack the claimant due to his sudden, dramatic, unspecified fall from grace in January 2010. In order to do so without having to follow any procedure or answer for their actions they relied on the fiction that the claimant was employed by Randox India for all purposes other than payroll in an apparent effort to avoid their obligations to this employee. The behaviour of the Randox NI in relation to the claimant’s termination is therefore unreasonable and merits a 50% uplift. A large corporate employer such as the first respondent should not behave in this way. There was no ignorance of procedures and HR professionals were on hand to advise although Miss Magee had nothing to do with the dismissal despite her involvement with HR in the Indian company. We regard that the actions of the respondent warrant a 50% uplift in the circumstances.

Jurisdiction

In detailed submissions Mr Algazi essentially invited us to compare and contrast the claimant’s details with the detailed examples outlined in Lawson and Ravat. We decline to take that approach as this is contrary to the approach endorsed in Ravat following the Duncombe decision. The “substantial connection” test is the one we must apply looking at all relevant factors to build up a picture of the legal and factual contractual position. It was recognised by the Supreme Court that it would be impossible to list exhaustively all the characteristics of employment relationships that would fall within the exception to the general rule, due to the diversity of arrangements between employers and their associate companies which may be based in the UK but operate outside the UK and cross-nationally.

75. We find that the claimant has established that he had a substantial connection with Northern Ireland at the relevant time for the following principal reasons.

76. The claimant’s employer Randox NI is a Northern Ireland company based in Northern Ireland.

77. The majority of his time was spent in Northern Ireland albeit working on Indian business. He was sufficiently embedded in the NI operation to establish the requisite substantial connection with it in view of the facts set out above and in view of the following.

78. The claimant was resident in Northern Ireland and paid tax in Northern Ireland until his pay was routed through India which necessitated payment of Indian tax. The claimant was still liable for tax in NI too. Whilst the taxation issue is a consideration in our deliberations it is by no means definitive and in the circumstances of this case we do not regard the payment of tax in India as determinative of the jurisdiction issue. By the same token we do not regard the contents of the P60s and P45 in the UK as determinative of the jurisdiction issue.

79. The claimant was based in Northern Ireland at Randox NI HQ, with an office, a phone and a computer. When the claimant stated this in his witness statement, the first respondent's witnesses sought to rebut it by describing the claimant’s workstation as essentially no more than a “stationery cupboard”. However, it became apparent in evidence, and it was agreed, that the room in question measured approximately 5 metres by 3 metres and had three desks with computers and telephones at them. Indeed Miss Magee in cross-examination resiled from her designation of the room as a stationery cupboard and accepted that it was indeed an office. This effort by the first respondent’s witnesses to minimise the claimant’s physical connection with HQ tainted their evidence generally for us.

80. The claimant’s periods of duty in India began and ended in NI. The claimant’s travel arrangements and expenses were paid from HQ; HQ booked his flights; he travelled on a tourist visa; he stayed in a hotel when he spent the periods in India and he had no residential status there.

81. The claimant did not appear on the list of Indian employees and did not have a written contract with the Randox India. In contrast he had a written contract with Randox NI. Whilst that contract stipulated that the claimant’s place of work would be split between Northern Ireland and India, the fact is that the majority of his time was spent in Northern Ireland and his connection with Northern Ireland was more substantial than his connection with India in view of the other factual circumstances which we have found.

Mitigation of Loss

82. The key principle in awarding compensation is whether or not it is just and equitable in the circumstances to award the sum having regard to the loss sustained by the claimant following his dismissal so far as any loss is attributable to the action of the employer. We approach our task with the minimum amount of technicality and adopt a broad brush approach.

83. We are satisfied that the claimant took reasonable steps to mitigate his loss by applying for numerous jobs and registering with recruitment agencies in the UK. We accept the claimant’s evidence that the fact that he had been dismissed from the respondent and that proceedings were pending was likely a major factor in his inability to obtain other employment. We also have regard to the global recession and its effect on his prospects for employment.

84. The claimant started his own business in September 2010 and closed the business in August 2011. The claimant’s evidence was that he ceased that business because it was trading at a loss. In addition his evidence was that his back problems were such that he required an operation and could not take time off to have his back fixed so he decided to cut his losses and cease trading. That business was a fruit and vegetable delivery business.

85. The respondent argued firstly, that any loss should cease prior to the date that the claimant set up his business in September 2010; secondly, that his loss should cease at the date he started up business as this broke the chain of causation; or thirdly, that his loss should cease in August 2011 as the claimant ceased his business in part due to his back problems and this broke the chain of causation.

86. The issue for us is whether or not it was reasonable for the claimant to set up his own business rather than to look further for a similar job similar to the one he lost. We regard it as reasonable of the claimant to have set up his own business in circumstances where he had tried in vain to obtain other employment despite having cast his net widely in his search for a job. Given that we have found that it was reasonable for the claimant to start up the business we do not find it just or equitable to penalise the claimant for the failure of the business by ending his compensation at that time. The claimant’s efforts to find employment were hampered by the fact that he was dismissed and had proceedings pending against the respondent. At no stage was it contended that the claimant’s back problems rendered him unable to work nor was that the claimant’s evidence to us in relation to this cessation of his business. We do not accept the respondent’s argument that ceasing the fruit and vegetable delivery business broke the chain of causation nor do we accept that the concept of causation of itself governs the assessment of compensation. The key task for us is to assess a level of compensation that is just and equitable in all the circumstances of the case and which relates to loss attributable to the action of the employer in unfairly dismissing the claimant

Contributory Fault

87. The only evidence before us on this point was firstly, the claimant’s failure to agree to revert to three-week/three-week pattern immediately and, secondly, the presentation of unsatisfactory figures in January 2010. The claimant remains ignorant of the reason for his dismissal and no reason, other than unspecified gross misconduct, was put forward to us. We do not accept that these circumstances mean that the claimant contributed to his dismissal as we have no evidence that the claimant was guilty of blameworthy conduct in the requisite sense.

Polkey reversal

88. As we have found automatic unfair dismissal for failure to follow the SDP, Article 130A(2) of ERO does not apply.

Polkey deduction

89. We do not accept that if a procedure had been followed it would have made no difference to the outcome as we know very little about the reason for dismissal and we do not accept that the claimant was guilty of gross misconduct. We therefore decline to make a Polkey deduction.

Compensation

90. The claimant’s side provided a schedule of loss. Both sides provided written and oral submissions on loss and compensation. Neither side addressed us on the issue of grossing up of any award. We considered whether to recall the parties to deal with this point but decided, in pursuance of the overriding objective, not to do so for the following reasons:-

(1) There has been significant delay generally throughout this case and it is in all parties’ interests to conclude the litigation as soon as possible.

(2) The values in this case are so large that the statutory cap is triggered at an early stage in the calculations rendering the grossing up issue a moot point.

We therefore set out below our conclusions and calculations. All figures used have been rounded.

91. Breach of Contract: Unpaid Wages

1-19 January 2010 agreed figure £1,654.00

92. Breach of Contract: Notice pay

4 weeks x £611.00 = £2,444.00

93. Unfair Dismissal: Basic award

As the respondent failed to follow the SDP the claimant is entitled to the minimum basic award of 4 weeks’ pay subject to the statutory maximum calculated as follows:

4 x £380.00 = £1,520.00

94. Unfair Dismissal: Compensatory award

Effective date of termination (EDT): 19 January 2010

Net monthly pay : £2,649.00

Net weekly pay : £ 611.00

(1) Loss of statutory industrial rights: agreed £280.00

(2) Loss between EDT and date of hearing:

(a) This case took longer than is usual to reach hearing for reasons which were the fault of neither side but relate to the vagaries of litigation in a case such as this where an issue of territorial jurisdiction was involved. In these circumstances we regard it as just and equitable to award compensation for the whole period up to the date of hearing and for a short period beyond that to reflect our assessment of the claimant as an employable individual.

(b) We do not accept the respondent’s argument that loss should be limited to a period of six months to one year from the EDT. We regard the claimant’s loss from EDT to the date of the decision to be attributable to the respondent. We do not accept the claimant’s case that he should receive future loss amounting to one year’s loss of earnings from the date of the hearing. We estimate that a further month’s compensation after the date of the decision is justifiable to enable the claimant to obtain similar employment now that this decision has gone in his favour. The calculation is as follows:

January 2010 – end April 2012 = 2 years 4 months:

28 months x £2,649.00 = £74,172.00

(3) Bonus: The claimant claimed loss of bonus from the EDT to the date of the hearing on 5 December 2011 in the sum of £18,333.00. We accept that the claimant received a discretionary bonus of £10,000.00 per annum during his time with the respondent which amounted to a period of just over one-and-a- half years as a consultant and an employee. Whilst the bonus was discretionary the issue for us is whether the claimant had a reasonable expectation of receiving it. We must assess the chance that he would have received the bonus if he had not been dismissed. We have no evidence that the claimant’s work was unsatisfactory: on the contrary, he was commended for his work shortly before he was inexplicably dismissed. We therefore regard it as just and equitable to award one year’s bonus in the sum of £10,000.00 as part of the compensatory award.

(4) Sums to be deducted

(a) It was uncontested that the sum paid into the Provident Fund in India could be reclaimed by the claimant following his termination of employment. The sum of £1,398.00 is therefore liable to be deducted from compensation and this equates to the six months’ Provident Fund contributions at £233.00 per month.

(b) DLA must be deducted in the sum of £350.00.

(5) The uplift of 50% is applicable to the award. In this case the figures are so large that the 50% uplift would constitute a very large sum of money and the appellate courts have indicated that the tribunal should be wary of awarding a sum in respect of the uplift, which might exceed the maximum award for injury to feelings in a discrimination case. In this case the net compensatory award exceeds the statutory cap without the application of the percentage uplift. We therefore do not regard it as necessary to calculate the precise sum of money to be awarded under that heading.

(6) Grossing up for tax

The issue of grossing-up for tax purposes was not addressed by either side. This can become applicable in cases where the award is in excess of £30,000 depending on the claimant’s tax position. The claimant was given the opportunity to give evidence in relation to his earnings from other sources and declined to do so. We therefore had no evidence before us of his tax position and had no evidence before us to enable us to apply the grossing-up provisions. We are also conscious that the award for unfair dismissal far exceeds the statutory cap. We therefore decline to apply grossing-up to the compensation.

(7) Cap on compensation for unfair dismissal

The final step in the calculation of compensation for unfair dismissal is the application of the statutory cap which at the time of the EDT amounted to £66,200.00 in respect of the compensatory award.

95. The statutory cap is exceeded at step (2) of the calculations set out at paragraph 94 above. We therefore do not regard it as necessary to set out the full calculation in any further detail given our findings set out above.

Summary

96. The total compensation awarded against the first respondent therefore is as follows:

(1) Unpaid wages £ 1,654.00

(2) Notice Pay £ 2,444.00

(3) Basic Award £ 1,520.00

(4) Compensatory Award £66,200.00

TOTAL £ 71,818.00

97. Recoupment statement

Compensatory award: £66,200.00

Prescribed element relating

to loss of earnings

in the period between the EDT

and the date of decision: £66,200.00

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

99. The claim against the second respondent is dismissed.

Chairman:

Date and place of hearing: 5-8 December 2011 and 24 February 2012, Belfast.

Date decision recorded in register and issued to parties: