British and Irish Legal Information Institute

Freely Available British and Irish Public Legal Information

[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

Industrial Tribunals Northern Ireland Decisions

You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Quinn v Cloughvalley Stores (NI) Limit... Cloughvalley Stores (NI) Limit... Cloughvalley Stores (NI) Limit... Cloughvalley Stores (NI) Limit... [2013] NIIT 01037_12IT (02 October 2013)
URL: http://www.bailii.org/nie/cases/NIIT/2013/1037_12IT.html
Cite as: [2013] NIIT 1037_12IT, [2013] NIIT 01037_12IT

[New search] [Printable RTF version] [Help]

THE INDUSTRIAL TRIBUNALS

CASE REFS: 1037/12

1038/12

1039/12

1047/12

CLAIMANTS: 1. Michael Quinn (Senior)

2. Brigid Quinn

3. Sarah Quinn

4. Michael Quinn (Junior)

RESPONDENT: Cloughvalley Stores (NI) Limited – (In Administration)

DECISION

The unanimous decision of the tribunal is that:-

(1) All the claimants were employees of the respondent company.

(2) The respondent company is liable to pay to the claimants the following amounts:-

(i) Michael Quinn, Senior - £3,221.00

(ii) Brigid Quinn - £2,136.00

(iii) Sarah Quinn - £2,426.00

(iv) Michael Quinn, Junior - £268.20

Constitution of Tribunal:

Chairman: Miss E McCaffrey

Members: Mr I Savage

Mrs J Foster

Appearances:

The claimants were represented by Ms Marie-Clare Campbell, Barrister-at-Law instructed by SC Connolly and Co Solicitors.

The respondents had entered a response but were not represented at the hearing.

1. ISSUES

The issues for the tribunal to consider were as follows:-

(1) Were the claimants (and in particular Michael Quinn Senior and Brigid Quinn) employees of the respondent company?

(2) Were the claimants unfairly dismissed when their employment was terminated on 13 March 2012?

(3) Alternatively, were the claimants made redundant by Tom Keenan the administrator of the respondent company on 13 March 2012?

(4) Was the employment of each of the claimants terminated without notice?

(5) Were the claimants entitled to holiday pay in lieu of untaken but accrued holiday?

2. THE FACTS

2.1 The respondent company was incorporated in 1998 and Michael Quinn, Senior and Brigid Quinn (two of the claimants) were the Directors and Shareholders of the company. They each owed 50% of the shares. Mr and Mrs Quinn sought planning permission to develop a property which they had bought in Crossmaglen and ultimately the premises opened in 2004. There were other stores and units which were let out on the same site. They had a loan with Danske Bank to develop the property and had hoped to reduce the loan considerably by the sale of some ground adjacent to the property. This sale was delayed and ultimately Danske Bank decided to put in a reporting accountant (Des Kelly) to oversee the business in 2009. Up until this point, Mr and Mrs Quinn had been overseeing the business along with the shop that they owned in Carrickmacross, County Monaghan but there was a manager running the premises in Crossmaglen.

2.2 Ultimately the manager was made redundant in an effort to cut costs and Mr and Mrs Quinn took over the day to day running of the business from that time. Effectively, at that stage Des Kelly controlled the finances of the business and supervised its running. Mr and Mrs Quinn’s evidence was that from 19 July 2009, when they began to be paid a regular wage from the business with Mr Kelly’s permission, they were completely under his control in terms of the running of the business. Mr Quinn’s evidence was that he and his wife had taken a small wage prior to that, but were focussing reducing the loan to the bank. After Mr Kelly took over, and Mr and Mrs Quinn were more actively involved in the running of the business on a day-to-day basis, the position changed. Mr Quinn was then being paid £500.00 per week gross, £385.00 net. Mrs Quinn was being paid £300.00 per week gross, £213.00 net.

2.3 It was their evidence that Des Kelly discussed with them on a weekly basis the stock which was required, the wages which had to be paid, the sales which were being processed, prepared a weekly budget and then authorised which cheques could and could not be written. In short, no money could be spent without his permission and the claimants had to account for all money coming in. They looked after the day-to-day running of the shop but within Mr Kelly’s control and direction. It was Mr Quinn’s evidence that this put the claimants in particular difficulty. At one point the heating system in the property had broken down. The cost of fixing it was £5,000.00, and they could not spend this money without the bank’s permission.

2.4 Ultimately the property which they had anticipated selling to Newry and Mourne Council was sold to the Council and their debt was reduced substantially, but this was still not sufficient to satisfy the bank, which maintained Mr Kelly in place. Ultimately the bank put the respondent company into administration on 17 October 2011 and Tom Keenan of Keenan Corporate Finance was appointed as administrator. At this point the business continued to run and Mr and Mrs Quinn continued to be employed in it as ultimately were Sarah Quinn and Michael Quinn Junior. The aim of the administrator was to try and sell the Company as a going concern.

2.5 Sarah Quinn started work with the respondent company in March 2010. She gave evidence that she had been recovering from an accident when a job was advertised in the shop in Crossmaglen. She applied for it and was successful. Her job was in the accounts office as an administrator. She confirmed the evidence given by Brigid Quinn in relation to the financial running of the business and the fact that everything had to be approved by Des Kelly and ultimately by Tom Keenan, the administrator. She confirmed that her wages were £420.00 gross per week, £331.00 net. She did not produce any written contract to the tribunal, but was able to produce payslips, as were her parents.

2.6 Michael Quinn Junior did not attend the hearing. On the basis of the claim form, payslips produced and the evidence given by Brigid Quinn, who had responsibility for dealing with salaries and wages, we accept that he was employed in the business from 19 September 2011 until 12 March 2012 as a trainee butcher and doing general shop work. His wage was £231.00 per week gross, £222.00 net.

2.7 The respondent did not attend the hearing, but a response form was lodged on behalf of the respondent by the administrator, Tom Keenan with copies of some correspondence sent by them to the claimant in the early part of 2012. The covering letter with the response form indicates that, because the company is insolvent, it did not have funds to appoint a legal representative to defend the tribunal claim. We believe that we are entitled to take the response form provided by the respondent as their case, and to consider this response form in evaluating the claimant’s evidence.

2.8 On 7 March 2012, Mr and Mrs Quinn, Sarah Quinn and Michael Quinn Junior were invited to a meeting with the administrator. They were in regular contact with the administrator and there had been no indication given of any changes. Tom Keenan, the administrator told them that the Henderson Group were interested in buying the business as a going concern, but one of the conditions of the purchase would be that no member of the Quinn family or senior management could have any ongoing involvement in the running of the business. This was however confirmed ultimately by a letter setting out the outcome of the claimant’s appeal against dismissal and sent by Keenan Corporate Finance to each of the claimants.

2.9 On 12 March 2012 there was what the claimants describe as “an incident” at the shop premises. The claimants did not give any evidence in relation to this, but the response form sets out that on Sunday 11 March 2013, Michael Quinn came to the company premises and removed the fork lift and cherry picker without the permission of the administrator. Apparently Mr Quinn claimed that he owned these assets personally, but no proof of this had been provided.

2.10 On Monday 12 March 2012, there was an incident between Michael Quinn and Michael McQuade, an employee of Kane Corporate Finance. Mr Quinn subsequently removed a sledge hammer from the back of his car and caused damage to company premises which cost £15,000.00 to repair. Mr Quinn was also injured in this incident and had to be admitted to hospital. This was clearly a distressing incident. Mrs Quinn referred to coming to the shop on the Monday morning to find the premises closed up with guards and German Shepherd dogs.

2.11 Michael Quinn was taken to hospital in Newry and his wife went with him. That evening their daughter Sarah Quinn came to the hospital and said that Tom Keenan had called about 6.00 pm and handed her four letters addressed to each of the claimants asking them to come to a meeting at 10.00 am the next day. These letters were all in the same terms and indicate that “as a result of ongoing cash constraints, it is with regret that I have to inform you that I have to make compulsory redundancies and that you have been selected for potential redundancy”.

2.12 None of the claimants attended the meetings. Mrs Quinn sent an email to Mr Keenan late that evening on her return from the hospital, or early the next morning, (she could not remember which) to say that they would be unable to attend. She indicated that she was not sure if the email had actually stated it, but she confirmed that Tom Keenan knew that Michael Quinn had been taken to hospital.

2.13 The following day Sarah Quinn returned to her apartment in the afternoon to find four letters, addressed to each of the claimants. Again, all these letters are in identical form. The relevant part of the letter states as follows:-

“As you are aware I invited you to a meeting on Tuesday 13 March 2012 at the Crossmaglen premises in order to consider your potential selection for redundancy. You have informed me that you were unable to attend the meeting and have not proposed another suitable time. As a result of ongoing financial constraints the requirements of the company for your position has ceased and it is with regret that I have to inform you that your position is redundant. Unfortunately there is no other suitable alternative employment within the company. Please accept this letter as formal notice of your redundancy dismissal which will be effective from today, Tuesday 13 March 2012.

“I can confirm you will be paid any wages owing to you in the normal manner. I would ask you to complete and return the enclosed RP 1 form to me as soon as you can …

“Finally please notify me in writing within 15 days from the date of this letter if you wish to appeal and of any points you wish to be considered”.

2.14 A separate letter was sent to Michael Quinn Senior, indicating to him that he had no longer had permission to enter the company’s premises including not only the convenience store but the forecourt of the petrol filling station. The letter indicated that if Mr Quinn attended at the premises, he would be treated as a trespasser and that Mr Keenan would take legal action against him.

2.15 Each of the claimants lodged an appeal against their selection for redundancy. The administrator wrote to Michael Quinn Senior on 20 March 2012 indicating that because of his actions at the Crossmaglen store, he believed that an appeal hearing would result in a “significant threat to my employees or their property”. Accordingly, he said that he would not conduct an appeal hearing but would carry out an appeal by correspondence and invited the claimant to provide full written details of the basis of his appeal.

2.16 Mrs Brigid Quinn sent an email in the same terms as the appeal letter sent by her husband, as did each of the other claimants. In particular the letter highlighted that the claimants did not accept Mr Keenan’s right to make them redundant or that he had followed correct procedures.

2.17 Ultimately an appeal letter was sent on 10 April 2012 on behalf of all of the claimants. A copy of this letter (dated 28 March 2012) was produced to the tribunal. That letter sets out the sequence of events in relation to the selection for redundancy of the claimants. The appeals were dealt with by Mr Scott Murray (one of Mr Keenan’s staff) and were not upheld. In the outcome letter Mr Murray sets out the reasons for his decision. He notes that a deal had been lined up with Hendersons which would secure the future of the business and the majority of jobs in the store. However, he indicated that it was with regret that the senior management team/Quinn family would have to be made redundant on financial grounds given the significant losses that the business was sustaining. Mr Murray’s letter goes on to say that the deal with Hendersons was due to complete on Wednesday 14 March 2012. It did not however proceed as a result of an incident which occurred on Monday 12 March 2012 and “intimidation of the business and family of the person nominated by the purchaser to operate the business”. The letter restates that the selection for redundancy was on financial grounds.

2.18 The letter also indicates that after the claimants were made redundant, two employees left the company voluntarily, one was a store manager and another was a part-time shop worker. A trainee butcher also informed the company that he had intended to leave his position at the end of April 2012. An advertisement was placed for a full-time butcher and a part-time shop assistant, but on further consideration it was noted that the butchery department was making a significant loss and therefore the liquidator withdrew the requirement for a full-time butcher. Two part-time shop floor assistants were employed. Mr Murray indicated that he did not consider that either of these positions would have been suitable employment for any of the claimants, “nor that it would have been reasonable for the company to offer these positions to you”. Mr Murray also indicated that he did not believe it was unreasonable to conduct the appeal by correspondence, because of the actions of Michael Quinn Senior. He said that he believed it was reasonable for the company to conclude that there was a “significant threat” to its employees or property if an appeal hearing was to proceed. Mr Quinn Senior confirmed that the business finally closed a few months after the claimants were dismissed.

2.19 Michael Quinn Junior found alternative work within a few days of his dismissal and continues in that employment. None of the other claimants had found alternative work and each of them was in receipt of benefits. Mr and Mrs Quinn were receiving benefits in the Republic of Ireland but no details of the amount received was given in evidence. Sarah Quinn was claiming Jobseeker’s Allowance in Northern Ireland.

2.20 Mrs Quinn, who dealt with salaries and wages and holiday records confirmed that neither she or her husband had taken any holiday in 2011 or the three months of 2012 before their employment was terminated. She confirmed they were entitled to carry over leave from the previous leave year. The same applied to Sarah Quinn. It was confirmed that Michael Quinn Junior was only owed one day’s holiday at the date of dismissal. It was confirmed that the leave year ran from 1 January to 31 December each year, and that each member of staff was entitled to the statutory entitlement of 28 days per annum, although no written contracts were produced to confirm this. Sarah Quinn had found new employment shortly before the tribunal hearing.

3. THE RELEVANT LAW

There were a number of legal issues for us to consider and we set out the law briefly below.

Unfair Dismissal

3.1 The relevant law in relation to unfair dismissal is to be found in Articles 126 and following of the Employment Rights (Northern Ireland) Order 1996 (“1996 Order”).

3.2 For the purposes of this decision the most relevant provisions are as follows:-

“Article 130 (1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show:-

(a) the reason (or, if more than one, the principal reason) for the dismissal; and

(b) that it is either a reason falling within paragraph (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this paragraph if it:-

(a) relates to the capability or qualifications of an employee for performing work of a 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 a position which he held without contravention (either on his part or that of his employer) of a duty or restriction imposed by or under a statutory provision.

(4) Where the employer has fulfilled the requirements of paragraph (1), the determination and 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;

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

“Article 130A Procedural fairness

(1) an employee who is dismissed should be regarded for the purposes of this Part as unfairly dismissed if:-

(a) one of the procedures set out in Part I of Schedule One to the Employment (Northern Ireland) Order 2003 (Dismissal and Disciplinary Procedures) applies in relation to the dismissal;

(b) the procedure has not been completed; and

(c) the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

(2) Subject to paragraph (1) failure by an employer to follow-up procedure in relation to the dismissal of an employee shall not be regarded for the purposes of Article 130(4)(a) as by itself making the employer’s action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure…”

3.3 The principles in relation to selection of employees for redundancy are
well-established. We were referred by the claimant’s representative to Williams v Compair Maxam Ltd [1982] ICR 156 which sets out the principles an employer should follow in selecting staff for redundancy. These include giving as much warning as possible of impending redundancies, considering alternative solutions in considering redeployment within the firm. An employer should seek to consult with the union (where applicable). The employer should also seek to establish objective criteria for selection for redundancy including matters such as attendance record, efficiency at the job, experience or length of service. The employer should seek to ensure the selections made fairly in accordance with these criteria and consider representations from the staff likely to be affected. Individual consultations of employees is considered best practice, especially where there is no union representative involved.

3.4 The position is summarised later by Lord Bridge in Polkey v A E Dayton Services Ltd [1988] ICR 142 at paragraphs 161 to 163 where he said:-

“…In the case of redundancy, the employer will not normally act reasonably unless he warns and consults any employee affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation… It is quite a different matter if the tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of a particular case, [our emphasis] the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with.”

Whether or not the claimants were “employees”

3.5 In this case we need to address the issue of whether Michael Quinn Senior and Brigid Quinn, in particular, were employees of the respondent company. This is significant as only employees can bring a claim of unfair dismissal. In our view no such issue arises in relation to Sarah Quinn and Michael Quinn junior as it is clear that they were employees. The issue in relation to Mr and Mrs Quinn Senior however relates to whether they should be properly considered employees, given that they were both Directors of the respondent company and each had 50% of the shares in the company. We have not considered this situation prior to 19 July 2009 as Mr and Mrs Quinn’s claims relate only to the period after this date, when Desmond Kelly was put in place, the manager also left and Mr and Mrs Quinn took a much more active role in the running of the company. They were clear that they took a much more active role in the running of the company on a day-to-day basis but strictly under Mr Kelly’s control and with him holding the purse strings. It was at this time that they started to receive a regular wage from the company and received payslips.

3.6 The case law in relation to this issue has developed considerably in recent years. The issue of whether a company director is in fact an employee is particularly important in small and medium sized companies, which have suffered particularly in the recession. In the recent decision of the Court of Appeal in England and Wales in Neufeld and another v The Secretary of State for Business Enterprise and Regulatory Reform [2009] IRLR(D) 40, the Court set out the history of the case law in relation to these matters. They referred to the longstanding authority of Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB 497 where the Court held as follows:-

“A contract of service exists if three conditions are fulfilled:-

(1) a servant agrees that, in consideration of a wage or other remuneration, he will provide his own working skill in the performance of some service to his master;

(2) he agrees, whether expressly or impliedly, that in performance of that service he will be subject to the other’s control in a sufficient degree to make that other master;

(3) the other provisions of the contract are consistent with it being a contract of service.”

The control condition was referred to by Mr Justice McKenna as being “the power of deciding the thing to be done, the way in which it should be done, the means to employed in doing it, the time when and the place where it shall be done.”

3.7 The Court of Appeal also considered a number of different judgments on the issue of whether a company director who had control of the company could be considered an employee. In particular they considered a decision of Elias J in Clarke v Clarke Construction Initiatives Ltd and another [2008] IRLR 364. In that case Mr Justice Elias identified eight factors which could be taken into account. Given that the Court of Appeal cited the Clarke decision with approval in Neufeld, I set them out here:-

(1) Where there is a contract extensively in place, the onus is on the parties seeking to deny its effect to satisfy the Court that it is not what it appears to be. This is particularly so where the individual has paid tax and National Insurance as an employee: he has on the face of it earned the right to take the advantage of the payments which employees may derive from such payments.

(2) The mere fact that the individual has a controlling shareholding does not of itself prevent a contract of employment arising. Nor does the fact that he is practicably able to exercise real or sole control over what the company does (Lee).

(3) Similarly, the fact that he is an entrepreneur, or has built the company up, and will profit from its success, will not be factors mitigating against a finding that there is a contract in place. Indeed, any controlling shareholding will inevitably benefit from the company’s success, as will many employees with shared options schemes (Connolly).

(4) If the conduct of the parties is in accordance with the contract that will be a strong pointer towards the contract being valid and binding. For example, this would be so if the employee works the hours stipulated or does not take more than stipulated holidays.

(5) Conversely, if the conduct of the parties is either inconsistent with the contract (in the sense described in paragraph 96) or in certain key areas where one might expect it to be governed by the contract it is in fact not so governed, that would be a factor and potentially a very important one, militating against a finding that the controlling shareholder is in reality an employee.

(6) In that context, the assertion that there is a genuine contract will be undermined if the terms have not been identified or reduced to writing (Fleming). This will be powerful evidence that the contract was not really intended to regulate the relationship in any way.

(7) The fact that the individual takes loans from the company or guarantees its debts could exceptionally have some relevance in analysing the true nature of the relationship, but in most cases such factors are unlikely to carry any weight. There is nothing intrinsically inconsistent in a person who is an employee doing these things. Indeed, in many small companies it will be necessary for the controlling shareholder personally to give bank guarantees precisely because the company’s assets are small and no funding will be forthcoming without them. It would wholly undermine the Lee approach if this were to be sufficient to deny the controlling shareholder the right to enter into a contract of employment.

(8) Although the Courts have said that the fact of there being a controlling shareholder is always relevant and may be decisive, that does not mean that that fact alone will ever justify a tribunal finding that there was no contract in place. That would be to apply the Buchan test which has been decisively rejected. The fact that there is a controlling shareholding is what may raise doubts as to whether that individual is truly an employee, but of itself that fact alone does not resolve these doubts one way or another.”

3.8 The Court of Appeal went on to say that the question of whether or not a shareholder director was an employee of a company is a question of fact for the court or tribunal before which such issues arises. They indicated that there are two questions to be considered. The first is whether or not a putative contract is a genuine contract or a sham. The second is whether, assuming it is a genuine contract, it amounts to a contract of employment (as opposed to a contract for services).

3.9 The Court of Appeal also noted that the availability or not a contract of employment was not necessarily determinative. They pointed out that “… In many cases involving small companies, with their control being in the hands of perhaps just one or two directors/shareholders, the handling of such matters may have been dealt with informally and it may be a difficult question as to whether or not the correct inference in the facts is that the putative employee was, as claimed, truly an employee. In particular, a director of a company is the holder of an office and will not, merely by virtue of such office, be an employee: the putative employee will have to prove more than his appointment as a director. It will be relevant to consider how he has been paid. Has he been paid a salary, which points towards employment? Or merely by director’s fee, which points away from it? In considering what the putative employee was actually doing, it will also be relevant to consider whether he was acting merely in his capacity as a director of the company, or whether he was acting as an employee.”

3.10 Entitlement To Annual Leave And Payment In Respect Of Untaken Holidays

The right to paid annual leave is set out in the Working Time Regulations (Northern Ireland) 1998 (as amended). Regulation 13 and 13A set out the entitlement to a minimum period of annual leave of 28 days. The initial right to paid annual leave had its origins in EU Law, and in particular Council Directive 93/103/EC, which provided for a basic 20 days paid annual leave per annum. Regulation 13A expands this right to a further eight days leave and it also provides at Regulation 13A(7) that a worker may be entitled to carry forward that period of additional annual leave into the leave year immediately following leave year in respect of which it was due, by their contract of employment.

3.11 The Working Time Regulations generally require an employee to take their annual leave in the leave year in which it accrues. The main exception to this is where an employee’s employment is terminated during the course of the leave year and he has taken less leave than he has actually accrued. Then his employer is obliged to make a payment in lieu of leave accrued but not taken.

4. DECISION

4.1 Were the claimants employees?

(a) Mr Michael Quinn Senior and Mrs Brigid Quinn

The first issue to consider with Michael Quinn Senior and Brigid Quinn is whether or not they were employees, and so entitled to claim unfair dismissal. We have considered the case law in relation to the position of company directors/shareholders and their status as employees. It is our view that in this case Mr and Mrs Quinn were employees from 19 July 2009 if not before. Their claim is confined to the period from 19 July 2009 until their employment ended on 13 March 2012.

After Danske Bank effectively took over the running of the respondent company, and Des Kelly was appointed as reporting accountant, it is clear that control of the business effectively was taken away from Mr and Mrs Quinn. While they were “hands on” in the running of the company and continued to be closely involved in the running of the company, the element of independence and control which they had enjoyed previously had gone. Instead, they were very much under the control of Mr Kelly, who directed the day-to-day running of the business, set weekly budgets and authorised them as to what cheques could be written or not. A particular example was that given by Mr Quinn when he indicated that they did not have authority to fix the broken central heating system, because it would have cost too much. They could not determine how much they were paid, as this was decided by Mr Kelly and subsequently by Mr Keenan when he became administrator of the company. Although there was no written contract, it is clear from payslips produced that both Mr and Mrs Quinn were paid through the PAYE system and accounted for tax and National Insurance on their earnings. In light of all of this and in light of the decision in Neufeld which we consider to be highly persuasive, we have no hesitation in finding that Mr and Mrs Quinn were employees of the company.

(b) Sarah Quinn and Michael Quinn Junior

As stated above, and in particular given their role within the business, we are content that both Sarah Quinn and Michael Quinn Junior were employees of the company.

4.3 Were the claimants unfairly dismissed?

The reason for dismissal of the claimants given by the administrator of the respondent company was that, as a result of ongoing cash constraints, compulsory redundancies had to be made. It was the administrator’s wish to try and sell the respondent company as a going concern, and a condition made by the proposed purchaser was that Mr and Mrs Quinn as directors and Sarah Quinn and Michael Quinn Junior would no longer be involved in the running of the company and would no longer be employees. The administrator told the claimants this at a meeting on 7 March 2012 and subsequently confirmed it in a letter following the outcome of their appeal hearing.

4.4 There was no debate about whether or not the business was in financial difficulty. It would not have been in administration otherwise. It should also be acknowledged that as Mr and Mrs Quinn had been running the business prior to the bank moving in to take it over, and prior to the business going into administration, their management of the business must have been deferent, otherwise the business would not have ended up in administration.

4.5 The next issue we have to consider is whether the decision to make the claimants redundant and the implementation of that decision, amounted to an unfair dismissal. As we have said above it was clear that the business was in financial difficulties and one option for the administrator was certainly to consider making redundancies. It is also quite clear from his correspondence and from the claimant’s evidence that the proposed sale of the business could not take place if the claimants were still involved in the business so it may be considered that the administrator took the view that it would be better to try and safeguard most of the other jobs in the business and make the claimants redundant. However, it is clear that the administrator did not follow the appropriate procedure of consulting with the claimants and deciding on their selection in accordance with objective criteria. (See Williams v Compair Maxam Ltd at paragraph 3.3 above). As Sarah Quinn put it to us, the only criteria applied seemed to be that they were members of the Quinn family.

The question then for us to consider is whether the employer’s failure to follow the procedure renders the dismissal automatically unfair, or whether the employer can show that they would have decided to dismiss the employee if they had followed the procedure. In this case, we have only the response form which came in from the administrator by way of a defence to this claim. Once advised that there was a possible sale of the business pending, Michael Quinn’s reaction was to go to the property the following Sunday and remove machinery which he claimed was his. The next day the administrator had employed security guards to guard the premises. This resulted in an altercation between Michael Quinn and one of the administrator’s employees, which resulted in considerable damage at the premises and Mr Quinn ending up in hospital. Given that their likely redundancy had already been discussed with the claimants on 7 March, we believe the letters of 12 March from the administrator to each of the claimants would have been sent that day anyway. It is clear that Mr Quinn Senior’s behaviour however did not help matters.

None of the Quinn family attended meetings in relation to their potential redundancy, although Michael Quinn was actually the only member of the family in hospital. It is clear that the administrator acted quickly, and arguably prematurely in failing to allow further opportunity for a meeting. The issue to decide is whether or not it would have made any difference to the outcome? In our view it would not. First of all, we are aware that other staff had left the business, or left it shortly after the claimants. Mr Quinn told us the business closed a few months after he and his family were dismissed on ground of redundancy and so they would all have been made redundant at that stage in any event. Secondly, by 12 March the relationship between the claimants and the administrator had clearly broken down. If Mr Quinn Senior had not been made redundant at this stage it is likely that he would have been facing a disciplinary process in relation to the damage he had caused to company property. We cannot see any grounds for Mr Quinn being redeployed, or being reengaged within the business on the basis of the information which we have. His presence in the business would have caused difficulties in relation to any possible sale of the business and accordingly we find that this is one of the “exceptional cases” referred to by Lord Bridge in Polkey, where failing to go through the process would not have made any difference in relation to the final outcome. Accordingly we find that Mr Quinn was fairly selected for redundancy and that although the process was defective, he would in any event have been made redundant.

4.6 In relation to Brigid Quinn, we agree that she, similarly, was not subject to the appropriate process in relation to selection for redundancy. Mrs Quinn, like her husband, would however have been made redundant when the business closed a few months later. Accordingly, we do not believe that following the correct procedure would have made any difference to the outcome. Secondly, we are however of the view that, again, it would have been virtually impossible for her to continue in the business, once the business was sold to another owner. As regards Sarah Quinn, she was in a similar situation to her mother. Although the correct procedures for selection for redundancy were not followed, we believe the outcome would have been the same if the correct procedures had been followed, for the reasons set out above.

We have considered whether it would be appropriate, in each of these cases, to make an award in relation to failure to follow the statutory dismissal procedure. We have considered Article 17(3) of the Employment (NI) Order 2003 which provides that where a statutory procedure has not been followed, the tribunal shall award an increase of 10%, and may award an increase of up to 50% on any award it makes. An uplift on the compensatory award in an unfair dismissal case should be awarded where the tribunal considers that it would be “just and equitable” to do so. However this is subject to Article 17(4), which provides that the duty to increase the award does not arise if there are “exceptional circumstances” which make that increase “unjust and inequitable in all the circumstances”. Having considered the circumstances of this case, we do not consider that it would be just and equitable to make such an award in this case. The claimants, particularly Michael Quinn Senior and Brigid Quinn, were closely involved in the running of the business which ultimately led to it going into administration. Mr Quinn’s behaviour at the premises clearly put off a prospective purchaser and all of this contributed to the actions of the administrator.

We do however find that the respondent is unable to make the following payments to the claimants as follows:-

(a)	Michael Quinn Senior

	Gross Pay:	£500.00 per week

	Net Pay:	£385.00 per week

	Age at date of dismissal:	49

	Number of complete years of service:	2

	The statutory maximum for a week’s pay at the date of dismissal was:	£430.00


	Redundancy Pay

	£430.00 x 1½ x 2 years’ service		=	£1,290.00


	Notice Pay

	£385.00 x 2 weeks		=	£770.00


	Holiday Pay

	8 days carried over plus 5.5 days accrued

	13.5 days x £86.00		=	£1,161.00



	Total		=	£3,221.00


(b)	Brigid Quinn

	Gross Pay:	£300.00 per week

	Net Pay:	£213.00 per week

	Age at date of dismissal:	48

	Number of complete years’ service:	2


	Redundancy Pay

	£300.00 x 1½ x 2 year’s service		=	£900.00


	Notice pay

	£213.00 x 2 weeks		=	£426.00


	Holiday Pay

	8 days carried over plus 5.5 days accrued to 12 March 2012.

	13.5 days x £60.00		=	£810.00



	Total		=	£2,136.00



(c)	Sarah Quinn

	Gross Pay:	£420.00 per week

	Net pay:	£331.00 per week

	Age at date of dismissal:	22

	Number of complete years’ service:	2

	(One year of service under the age of 22, so she will receive only 0.5 weeks’ pay for that year.)


	Redundancy Pay

	£420.00 x 1.5		=	£630.00


	Notice Pay

	£331.00 x 2 weeks		=	£662.00


	Holiday Pay

	8 days carried over plus 5.5 days accrued in 2012.

	13.5 days x £84.00		=	£1,134.00



	Total		=	£2,426.00



(d)	Michael Quinn Junior

	Gross Pay:	£231.00 per week

	Net Pay:	£222.00 per week

	Age at date of dismissal:	18

	Number of completed years’ service:	0

	Michael Quinn Junior is not entitled to bring a claim for unfair dismissal or redundancy as he does not have sufficient service.


	Notice Pay

	1 week @ £222.00 per week		=	£222.00

	Untaken holiday pay £46.20		=	£46.20


	Total		=	£268.20


	One day holiday calculated above.

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

Chairman:

Date and place of hearing: 2 September 2013, Belfast.

Date decision recorded in register and issued to parties:

About BAILII - FAQ - Copyright Policy - Disclaimers - Privacy Policy amended on 25/11/2010