Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS  

 

CASE REF:    781/12

 

 

CLAIMANT:                                Steven Bell

 

RESPONDENT:                          The Elevate Group Limited

 

 

 

DECISION

 

It is the tribunal’s decision that the claimant is entitled to a statutory redundancy payment of £2,400.00, that in breach of contract the respondent has failed to pay the claimant contractual notice pay of £2,555.04 and arrears of pay due on termination of his employment of £2449.53.  The respondent shall pay the claimant £7,404.57.

 

 

Constitution of Tribunal:

 

Chairman  (Sitting alone):          Ms M Bell

 

 

Appearances:

 

The claimant appeared in person.

 

Mr Liam Ward, Managing Director of the respondent Company appeared on behalf of the respondent.

 

 

1.       The claimant complained in his claim that the respondent had made him redundant due to being unable to pay his wages for a month and a half, that the respondent signed a letter drafted by the claimant’s solicitor to make the claimant redundant, that he had not been paid a redundancy payment due of £2,418.78, and in breach of contract had not received notice pay of 8.33 weeks pay of £2,393.06 and arrears of pay due of £2449.53.

 

2.       The respondent in its response resisted the claimant’s complaints, disagreed that the claimant had been dismissed stating that the claimant had chosen to stop working for the respondent, queried the correctness of the end date given by the claimant and stated that the respondent had warned that short time working would be necessary, staff were told at the end of January 2012 there was no money for wages and that three staff including the claimant ‘ganged up’ on Mr Ward to make them redundant.  At hearing Mr Ward alleged that whilst the claimant attended work up to 15 February 2012 he considered that there had been a lack of effort to do any work for the company during this time, that time sheets had not been submitted by the claimant since the start of October 2011 and that it had only come to his attention in the last couple of days that wilful harm was done to the respondent’s reputation through procurement of clients, that the claimant had clearly intended to leave before the events of January and February 2012, had contributed to circumstances causing cash flow difficulties for the respondent, had constructed something that looked like a redundancy situation with the assistance of others and ‘hoodwinked’ Mr Ward into signing a letter agreeing to make the claimant and at least one other employee redundant, and the claimant and his former line manager had set up in business together.

 

 

ISSUES FOR THE TRIBUNAL

 

3.       The issues before the tribunal were as follows:-

 

                           i.          Is the claimant entitled to a redundancy payment under Article 170 of the

Employment Rights (Northern Ireland) Order 1996?

 

                          ii.          Has the respondent in breach of contract failed to pay wages due to the claimant and if so what loss has the claimant sustained?

 

                        iii.          Has the respondent in breach of contract failed to provide the claimant proper notice and if so what loss has the claimant sustained?

 

 

SOURCES OF EVIDENCE

 

4.       The tribunal considered the claim, response, documentation handed in by the parties and heard oral evidence from the claimant and from Mr Ward.  In the course of his evidence Mr Ward sought to produce a bundle of documentation to show wilful harm by the claimant to the respondent, just recently discovered, which had not been shared and agreed with the claimant for production to the tribunal.  Time was given to allow the claimant to peruse the bundle of documentation and it was explained to parties that for any evidence to be admissible it must be relevant to the issues for decision and they were advised of the relevant issues identified by the tribunal in this case.  Mr Ward was asked to explain how the evidence he sought to produce would help with determination of the relevant issues, Mr Ward stated that  his evidence would show that the claimant intended to leave his employment before the events of January and February 2012, had constructed something that looked like a redundancy situation with the assistance of another employee, showed not just a lack of effort in the months proceeding termination but some wilful damage to the company’s reputation and that he had been, ‘hoodwinked’, by the claimant.  The claimant objected to the relevance and admission of the respondent’s bundle documentation.  To progress matters, parties were advised that the evidential weight, if any, to be attached to documentation would be determined by the tribunal based on relevance and Mr Ward permitted to proceed to present his documents individually explaining how each was relevant and to comment thereon and the claimant allowed an opportunity to respond.  Documentation produced by Mr Ward included a diary page entry by Mr Magill, the claimant’s former line manager, for a meeting with a client of the respondent on 18 January 2012, a subsequent planning application by the claimant on 20 March 2012 for the same client, planning applications independently submitted by the claimant for clients of the respondent in September 2009, February 2010, and May 2010, a planning application by the claimant in March 2012 for a client for whom the respondent had secured a site approval in November 2006 time limited to November 2011, a print out showing registration of the website name by Mr Magill on 16 August 2011 used for claimant’s new business, a printout of a Facebook internet page describing the claimant as owner of the new business, founded in 2012, and time sheets completed by the claimant during his employment which had been signed off by Mr Magill as his line manager.

 

 

FINDINGS OF FACT RELEVANT TO THE ISSUES TO BE DETERMINED

 

Based on the evidence presented the tribunal finds as follows:-

 

5.       The claimant, born on 28 April 1976, commenced employment with the respondent as an architectural technician on 30 May 2005.

 

6.       The statement of main terms and conditions of employment provided to the claimant states at Clause 7 ‘You will be paid on a lying week basis.  You will be paid monthly on the last Friday of every month by credit transfer.’  Clause 15 provides on termination for notice of ‘1 month + 1 wk for each additional year of employment’, where the continuous period of employment is 2 years or more.

 

7.       The claimant’s hours of work were 9.00 am to 5.00 pm Monday to Friday and he was paid £1,746.00 gross per month being £1,384.00 net, which is £402.92 gross and £319.38 net per week approximately.

 

8.       As per the respondent’s response, from approximately June 2011 the respondent’s cash flow and ‘banking situation’ continued to deteriorate and on several occasions the company was unable to pay all salaries on time.

 

9.       On 31 January 2012 Mr Ward met with employees including the claimant and informed them that he had no money to pay them and suggested a period of lay off.

 

10.     Mr Ward sought advice from the LRA and suggested that employees also seek their own advice.  Mr Ward emailed to employees guidance from the Department of Employment and Learning for employees in circumstances where their employer is unable to pay them wages.

 

11.     In discussions over the following two weeks three employees including the claimant informed the respondent that they had insurance policies which would provide them financial cover in the event of losing their jobs in a redundancy situation.  Mr Ward however suggested that they consider a period of lay off until he had cash available again, although he could not say when that might be.  Discussion continued between Mr Ward and employees over the next two weeks during which time Mr Ward refused to sign forms to confirm that employees were being made redundant to enable them to make an insurance claim.

 

12.     Mr Ward emailed the claimant on 8 February 2012 and asked him to ‘please try to bring your time sheets up to date’ and on 15 February 2012 stating, ‘I need you to catch up on time sheets’.

 

13.     On 15 February 2012 the claimant gave Mr Ward a hard copy of a sample redundancy letter prepared by his solicitor and also emailed a copy to him stating ‘There will be changes required from yourself with regards to payment, notice etc if you can fill out these and get back to me on this matter as a matter of urgency.’  Mr Ward did not expect at that time to be in a position to pay the claimant salary due to him by the end of February and did not know when he could expect to be able to pay him.  Mr Ward on his evidence felt ashamed that he was not in a position to make payments due and was being pressed to sign various papers put before him.  Mr Ward amended the second paragraph of the sample redundancy letter provided to him by the claimant confirming his redundancy and dismissal with immediate effect to read ‘Final details of the redundancy payment which will be due to you are to be calculated on the basis of your contract of employment and statutory rules.  Your last day of work will therefore be today....  As you are aware the company is experiencing Cash flow difficulties so it is not able to make that payment to you today, but will endeavour to do so as soon as possible.’  Mr Ward signed and gave the confirmation of redundancy letter to the claimant.  The claimant’s employment with the respondent terminated on the 15 February 2012.

 

14.     The claimant prior to his effective date of termination on 15 February 2012 had attended work as usual during business hours during January and up to 15 February 2012 and was available to carry out work required of him.

 

15.     During his employment the claimant was often a few months behind in completion of time sheets but payment of his wages were not at any time withheld as a result.  The claimant failed to complete outstanding time sheets before leaving his employment.

 

16.     Salary payable to the claimant under his contract of employment for January and February 2012 up to the effective date of termination amounted to £2,449.53 net including a lying week worked on commencement of employment.

 

17.     No offer of alternative employment or re-engagement was made to the claimant by the respondent following termination of his employment.

 

18.     The respondent’s workforce decreased from eight to one employee between the start of January 2012 and 15 February 2012.  The respondent has not replaced the claimant and has no intention to do so in the near future.  The respondent has not replaced other employees lost in 2012 but currently uses independent contractors from time to time.

 

19.     The claimant is now in business with his former line manager, Mr Magill.

 

20.     The claimant presented a claim to the office of the industrial tribunals on 1 May 2012 in the absence of receiving payment from the respondent of a redundancy payment, notice pay and arrears of pay following termination of his employment.

 

 

LEGISLATION

 

Redundancy

 

21.     Article 170 of the Employment Rights (Northern Ireland) Order 1996 provides that an employer shall pay a redundancy payment to any employee of his, if the employee is dismissed by the employer by reason of redundancy or is eligible for a redundancy payment by reason of being laid off or kept on short time. Circumstances in which an employee is dismissed are set out in Article 171 and include if the contract under which he is employed by the employer is terminated by the employer (whether with or without notice) at (1) (a), and, if the employee terminates the contract under which he is employed in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct under 1(c).  Circumstances in which an employee who is dismissed shall be taken to be dismissed by reason of redundancy are set out in Article 174 and include if the dismissal is wholly or mainly attributable to the fact that the requirements of that business for employees to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish.

 

22.     Article 197 of the 1996 Order sets out how the amount of a redundancy payment shall be calculated.

 

23.     For the purpose of calculating a redundancy payment the maximum amount of a week’s pay was capped at £400.00 at the time of the claimant’s effective date of termination under Article 23 of the 1996 Order, as amended.

 

Breach of contract

 

24.     Under the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 an employee may bring a claim for damages for breach of his contract of employment or for a sum due under that contract or any other contract connected with his employment before an Industrial Tribunal if the claim arises out of or is outstanding on termination of his employment.

 

Application of law to facts found

 

25.     On consideration of all the evidence before it the tribunal finds on balance:-

 

Redundancy Payment

 

26.     Irrespective of whether the claimant may have had plans to set up his own business, the tribunal is satisfied on 15 February 2012, the effective date of termination of the claimant’s employment, that the respondent was aware of the implications and clearly agreed to dismiss the claimant by amending and signing the letter put to him, and that the claimant’s contract of employment was terminated by the respondent.  The tribunal finds that the claimant was accordingly dismissed within Article 171 of the 1996 Order.  

 

27.     Based on the respondent’s proposals to lay staff off as a result of its cash flow difficulties, the fact that the respondent has not replaced the claimant or indeed other staff lost and has no plans to do so, the tribunal is persuaded that the reason for the claimant’s dismissal was mainly or wholly attributable to the fact that the requirements of the business for employees to carry out work of a particular kind had ceased or diminished or were expected to and that claimant’s dismissal was by reason of redundancy under Article 174 of the 1996 Order.

 

28.     The claimant is accordingly entitled to a statutory redundancy payment calculated in accordance with Article 194 of the 1996 Order as follows:-

 

                    6 years continuous employment x 1 x £ 400.00  =  £2,400.00

 

 

NOTICE

 

29.     The claimant at the effective date of termination had six complete years of service and was contractually entitled, where the continuous period of employment was two years or more, to receive one month plus one week for each additional year of employment, amounting to eight weeks notice.  The respondent in breach of contract did not provide the claimant with his required contractual notice on termination of his employment.  The respondent shall pay the claimant £2,555.04 in respect of notice entitlement.

 

 

PAY

 

30.     The respondent expressed doubt at the effort and actual work done by the claimant during his time at work during January and February, up to 15 February 2012.  The tribunal is on balance persuaded that the claimant was present at work and undertook whatever work was required of him during that time by the respondent, but did not receive payment of £2,449.53 net salary due in breach of his contract of employment to include a lying week on commencement of his employment.  The respondent shall pay the claimant £2,449.53 in respect thereof.

 

 

CONCLUSION

 

31.     It is the tribunal’s decision that the claimant is entitled to a statutory redundancy payment of £2,400.00, that in breach of contract the respondent has failed to pay the claimant contractual notice pay of £2,555.04 and arrears of pay due on termination of his employment of £2,449.53.  The respondent shall pay the claimant £7,404.57.

 

 

INTEREST

 

32.     This decision is a relevant decision under the Industrial Tribunal (Interest) Order (Northern Ireland) 1990.

 

 

 

 

 

 

 

Chairman:

 

 

Date and place of hearing:       5 July 2012, Belfast.

 

Date decision recorded in register and issued to parties: