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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Allen v Chief Constable of the Police ... [2012] NIIT 02134_11IT (26 June 2012)
URL: http://www.bailii.org/nie/cases/NIIT/2012/2134_11IT_2.html
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THE INDUSTRIAL TRIBUNALS
CASE REF: 1111/11
CLAIMANT: John Hughes
RESPONDENTS: 1. CCS Logistics Ltd
2. CLS Installation Services Ltd
DECISION
The claims for unfair dismissal and unlawful deduction of wages are each dismissed.
Constitution of Tribunal:
Chairman: Mr H Travers
Members: Ms J Townsley
Mr R Hanna
Appearances:
The claimant attended and was not represented.
The respondent did not attend and was not represented.
REASONS
Issues
1. The claimant seeks relief in respect of his claims for unfair dismissal and unlawful deduction of wages. In considering these claims an issue arose as to the identity of the claimant’s employer and consequently whether or not at the date of termination of his contract the claimant had sufficient continuity of employment to permit him to make a claim for unfair dismissal.
Facts
2. In 2006 the claimant saw a vacancy for a field service engineer advertised on the website of what the claimant described as “the jobcentre in the Republic”. The prospective employer was a company called “Corporate Logistic Solutions Limited”. The claimant applied and was interviewed in a hotel in Newry by Mr Gerry Doherty who was the operations manager of the claimant’s potential new employer.
3. The claimant’s job application was successful and by email dated 14 September 2006 Mr Doherty informed him, “I confirm that you will commence employment with CLS Ltd on 9 October 2006 as previously advised. Your contract of employment and all the other relevant documents will be sent by post today”.
4. No contract of employment arrived in the post and so by email dated 21 September 2006 the claimant wrote to Mr Doherty asking whether or not he had yet sent it. On the same date Mr Doherty replied, “I have asked Robbie Apps in the Dublin office to forward it to you”.
5. By 6 October 2006, the Friday before the claimant was due to commence employment, no documentation had arrived and so the claimant sent a further chasing email. Mr Doherty replied on the same day, “Sorry about this the contract was to be forwarded by e-mail from the UK”. This email was the first intimation given to the claimant that the respondent had a UK office. No contract of employment ever arrived.
6. The claimant commenced working and his first payslip was dated 18 October 2006. The name of the employer appeared on the payslip as, “Corporate Logistic Solutions Ltd”.
7. On his payslip dated 19 January 2007 the name of the claimant’s employer changed to Scots Holdings Ltd. The tax code on the payslip also changed.
8. The claimant was concerned by the changes and telephoned the office accountant in Dublin. He was told not to worry as Scots Holdings Ltd was just the registered name of the UK office.
9. On 10 January 2008 the claimant received a letter from HMRC requesting a P60 certificate in respect of his employment with Scots Holdings Ltd in the 2006/2007 tax year. Despite more than one request the claimant never received a P60 during the course of his employment with the organisation.
10. During the period from 28 September 2007 until 23 January 2009 the claimant received no payslips.
11. On 23 January 2009 the claimant started to receive payslips by email. The stated name of the employer had changed again, this time to CCS. The payslips continued until 24 July 2009 when the claimant again ceased to receive them.
12. The claimant was concerned as to whether or not matters had been regularised with the tax authorities and after contacting them in September 2009 he was told that the matter had been passed to their Employer Compliance Team.
13. By December 2009 matters came to a head. The claimant was being pursued by HMRC in respect of apparently unpaid tax and national insurance contributions. This was despite the fact that the level of payment from his employer which reached his bank account implied that tax and national insurance was being paid.
14. In desperation the claimant asked to be paid gross so that he could sort out his tax affairs with HMRC who were putting him under pressure. In so making the request the tribunal expressly finds that the claimant was not seeking to become self-employed. He was simply attempting to sort out a mess of his employer’s making. The claimant’s request was as a result of his employer’s apparent non-payment to HMRC of tax and national insurance, payments which had in fact been deducted from his pay.
15. Following further discussions with his employer, on 26 February 2010 the claimant was paid £1,743 in respect of back payments of tax and national insurance which had been deducted from his pay but never paid by his employer to HMRC. The claimant has told HMRC that he has received this sum which he retains while HMRC’s employer compliance team continues to investigate. The negotiations which led to the payment to the claimant of £1,743 were conducted between himself and Mr Edward Mulderrig who was a director and/or company secretary of Corporate Logistics Solutions Ltd, CCS Logistics Ltd, and Scots Holdings Ltd.
16. The claimant continued to receive his pay gross until April 2010 when Martin Pegg, described by the claimant as the company accountant, wrote to him and asked him to fill in a P46. In a letter dated 27 April 2010 Mr Pegg wrote, “A P46 does not look back into history; in the absence of a P45 from last year it merely legalises your tax and NI for the current tax year beginning April 2010”. Mr Pegg went on, “A paper company has been set up in an accountant’s office in NI because legally I am not allowed to pay your PAYE and NI for you from Dublin; this has to be done from a UK address by a nominated agent.”
17. Thereafter the claimant was paid through the new company CLS Installation Services Limited, a company with a registered office in Bangor, Co. Down. The new company deducted tax and national insurance from his pay appropriately and forwarded it to HMRC.
18. The claimant’s employment with CLS Installation Services Limited came to an end in February 2011 when he was made redundant. The claimant believes that at that time he was one of two people who were made redundant out of a potential pool of 20.
19. There was no consultation before he was selected for redundancy and the criteria for selection were never communicated to him. By letter dated 31 January 2011 Mr Mulderrig stated that the reason for redundancy was, “...as a result of enforced changes to your service delivery model and it was necessary to reduce field engineering resource in line with the revised geographical requirements.”
20. The claimant had been based in Newry and had covered areas in Northern Ireland. He was never asked if he would be content to work in the Republic of Ireland but would have been happy to cover areas there if he had been asked.
21. It was to transpire that the areas previously covered by the claimant were now to be covered by an engineer who had been with the organisation for a shorter period of time than the claimant but who happened to be the nephew of Gerry Doherty who was the operations manager. Mark Doherty was based in Cavan and after the claimant’s redundancy he was given Belfast and Dublin to cover as a field engineer.
22. The claimant has produced copies of company records which he has obtained from Companies House in the UK and the Companies Registration Office in the Republic of Ireland. They show the following:
Corporate Logistic Solutions Limited
Shareholders: Edward Mulderrig 50% - Robert Apps 50%
Directors: Edward Mulderrig and Robert Apps
Scots Holdings Ltd
Shareholders: Edward Mulderrig 50% - Anthony Doolan 50%
Company Secretary: Edward Mulderrig
Director: Anthony Doolan
CCS Logistics Ltd
Shareholders: Edward Mulderrig 50% - Robert Apps 50%
Directors: Edward Mulderrig and Robert Apps
CLS Installation Services Ltd
Shareholder: Robert Apps 100%
23. Upon being made redundant the claimant received a redundancy payment of 4 weeks pay. He makes no complaint about that but seeks an award in respect of his loss of earnings following termination of his contract of employment. The claimant states that he has been unfairly dismissed by reason of an unfair procedure for selection for redundancy.
24. Following his dismissal in February 2011, the claimant made around 30 job applications. He had two interviews and secured employment in November 2011. The claimant was in receipt of jobseekers allowance from 1 March 2011 until 7 November 2011.
25. The basis for the claim for unlawful deductions of wages is the failure of the claimant’s employer at all times to pay to HMRC sums which were deducted from the claimant’s salary in respect of tax and national insurance.
Law
26. Under Part XI of The Employment Rights (NI) Order 1996 [“the ERO”] there is a qualifying period of employment before an employee may make a claim for unfair dismissal. In order to make such a claim an employee must have been continuously employed for a period of not less than one year ending with the effective date of termination.
27. Article 14(6) of the ERO provides as follows:
“If an employee of an employer is taken into the employment of another employer who, at the time when the employee is taken into the second employer’s employment, is an associated employer of the first employer –
(a) The employee’s period of employment at that time counts as a period of employment with the second employer, and
(b) The change of employer does not break the continuity of the period of employment.”
Article 4 of the ERO defines “associated employer” as follows:
“...any two employers may be treated as associated if –
(a) One is a company of which the other (directly or indirectly) has control, or
(b) Both are companies of which a third person (directly or indirectly) has control”.
28. The question of what constitutes control for the purposes of identifying an “associated employer” is one which has been considered by the higher courts on a number of occasions, including the cases which follow.
The Employment Appeal Tribunal in Hair Colour Consultants Ltd v Mena [1984] IRLR 386 EAT held that unless there was a shareholding of more than 50% of the shares in a company there is no control.
The English Court of Appeal in South West Launderettes Ltd v Laidler [1986] IRLR 305 held that in order to establish that two employers are associated on the basis that a third person has control it is necessary that control of the two companies be in the hands of the same person. Mustill LJ stated that it was not enough to show that day to day control of the two companies was exercised in the sense that the reins of management were in the hands of one person. What matters is whether or not that person is the, “ultimate repository of control, in the sense that he [has] the power to determine the outcome of voting in general meeting, and hence to procure for the company a management compliant with his wishes.”
29. The ERO sets out time limits for presentation to the tribunal of a complaint of unfair deduction of wages. Article 55 provides that where there has been a series of deductions the tribunal shall not consider a complaint unless it has been presented within 3 months of the last deduction. Where the tribunal is satisfied that it was not reasonably practicable for a complaint to be presented within the time limit, it may consider the complaint if it is presented within such further period as the tribunal considers reasonable.
Conclusion
30. At the outset the tribunal wishes to pay tribute to the way in which the claimant presented his case. The claimant provided copies of all relevant documentation and he presented his case in a clear and well reasoned manner. Following the hearing, the tribunal requested in writing further documentation which would evidence the shareholdings in the relevant companies. The claimant responded to this request promptly and he provided precisely the documentation requested. The claimant’s conduct of the proceedings was a model of good practice.
31. The tribunal found the claimant to be honest and straightforward. An attitude which contrasts sharply with the shabby treatment he received both in respect of the deduction of tax and national insurance which was not paid to HMRC, and also in respect of the way in which he was selected for redundancy. The criteria applied in respect of his selection for redundancy were not transparent. There was no consultation with him and no apparent consideration of whether or not, as a Newry based engineer, he could have covered Belfast and Dublin. It is not possible to know what the outcome of a fair selection procedure would have been, but on the evidence that the tribunal heard it is clear that no such fair selection procedure took place.
32. The tribunal has a great deal of sympathy for the claimant in respect of the way he was treated. The questions which the tribunal must answer, however, go further than that.
33. The last company to employ the claimant was CLS Installation Services Ltd. He was employed by that company for a period of less than one year. Unless that company was an associated employer of the first named respondent the claim must fail.
34. The tribunal has given very careful consideration as to whether or not the respondents enjoyed associated employer status. The conclusion reached by the tribunal is that they were not associated employers.
Mr Apps held 50% of the shares in the first named respondent. Following the decision in Hair Consultants Ltd v Mena this is not sufficient to constitute control of the first named respondent.
Applying to that finding the test in South West Launderettes v Laidler, it is clear that, on the basis of the evidence before the tribunal, the second named respondent is not in law an associated employer and consequently the claim for unfair dismissal must fail.
35. The claim for unlawful deduction of wages is based upon the deduction of tax and national insurance which was not paid over to HMRC. The last in that series of deductions pre-dated April 2010. The claim was not made within three months of that deduction and therefore is out of time. Given that the claimant was aware at that time of the facts potentially giving rise to the claim – he had been corresponding with both his employer and HMRC about it – the tribunal does not exercise its discretion to extend time. Consequently the claim for unlawful deduction of wages is dismissed.
Chairman:
Date and place of hearing: 21 March 2012, Belfast.
Date decision recorded in register and issued to parties: