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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Drozd v Money Matters Diane Magee Jill Magee [2014] NIIT 287_14IT (04 June 2014)
URL: http://www.bailii.org/nie/cases/NIIT/2014/287_14IT.html
Cite as: [2014] NIIT 287_14IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 287/14
CLAIMANT: Iwona Drozd
RESPONDENTS: 1. Money Matters NI
2. Diane Magee
3. Jill Magee
DECISION
The claimant was not an employee or worker and has not suffered a loss arising from a breach of contract or unauthorised deduction from wages by the respondent. The claimant’s claim is dismissed.
Constitution of Tribunal:
Employment Judge (sitting alone): Employment Judge Bell
Appearances:
The claimant appeared in person.
The third named respondent appeared in person on behalf of the respondents.
1. The claimant in her claim sought payment of £3155 for arrears of pay for work carried out by her between 6 June 2013 and 29 November 2013 for the respondents and the claimant confirmed at hearing that she had calculated this amount at the national minimum wage for twenty hours per week. The claimant in her claim stated she had asked on three occasions whether the respondents wanted her to leave, money being the issue, but that they insisted she stay and promised payment.
2. A response was presented by the third-named respondent, accepted on behalf of all the respondents, denying and resisting the claimant’s claim on the basis that she was not an employee or worker providing service but began a work experience placement arranged through Southern Regional College on 29 April 2013, that her work experience continued on a voluntary basis to assist her learning skills for future employment and when the claimant asked the third-named respondent if she could employ her for ten hours per week the claimant was informed employment could not be offered and should be sought elsewhere.
ISSUES
3. The issues for the tribunal were:-
(i) What was the claimant’s employment status, was she an employee and/or worker?
If so,
(ii) Was the claimant entitled to payment at least at the national minimum wage?
If so,
(iii) Has the respondent in breach of contract failed to pay the claimant wages due and or made an unauthorised deduction of wages as a result of which the claimant has suffered a loss?
EVIDENCE
4. The tribunal considered the claim, response, agreed documentation provided by the parties at hearing and heard oral evidence from the claimant and third-named respondent.
FINDINGS OF FACT
5. In May 2013 the third-named respondent, a sole trader operating as a mortgage finance advisor, authorised to Legal and General and regulated under the FSA, trading under Money Matters NI, agreed with Ms Mary McArdle of Southern Regional College to take the claimant on for work experience as part of the third year of the Business and Administration course the claimant was undertaking. Money Matters was the trading style used by a group of individual businesses carrying out similar work to the third named respondent who pooled together for Legal and General and to whom one commission distribution was made and then split between the individual businesses. The claimant commenced work experience with the third-named respondent’s office on 7 May 2013. At that time the second-named respondent, the third-named respondent’s sister, was training and undertaking exams to become a mortgage finance advisor and operated as self-employed under the third-named respondent’s agency registration number.
6. Following the end of her
course on 5 June 2013 the claimant continued to attend the third-named
respondent’s office between 9.00 am and 1.00 pm, Monday to Friday
until 29 November 2013, she did not seek to vary these hours at any
stage, nor worked elsewhere during this time. There was dispute as to the
basis upon which it was agreed that the claimant continue to attend the office.
The claimant asserted that in mid-May, on indicating 5 June 2013
would be her last day, the
third-named respondent asked would she like to stay and told her she would be
paid to which the claimant responded it would have to be 9.00 am to 1.00 pm
as she had young children but no further detail was discussed. The third-named
respondent disputed the claimant’s account and asserted that the claimant was a
very nice lady with whom both she and the second-named respondent got on very
well with, became friendly with and that at the end of her placement the
claimant offered to continue to come in on a voluntary basis entirely of her
own choice and that no offer of employment was made nor any conversation took
place regarding payment and that it was the third-named respondent’s
understanding that her attendance was voluntary during this time and that the
claimant was actively seeking paid employment elsewhere. On balance as set out
below I find more credible the third-named respondent’s evidence that no offer
of employment or payment was made to the claimant to take effect from the end
of her course on 5 June 2013.
7. It was common case that the
claimant subsequently asked the third-named respondent that she be registered
as an employee for ten hours per week but was informed by the third-named
respondent that this was not possible. The
third-named respondent contended the claimant came to her in July 2013 stating
her husband was unhappy that she was not earning any money under her work
experience and that the third-named respondent stressed to the claimant that
because her earning an income was dependant on her doing mortgage business she
was not in a position to offer the claimant paid employment to which the
claimant replied that she had a large sum of money in her sole bank account and
that money was not a problem for her and nothing to do with her husband.
Whereas on the claimant’s evidence the conversation took place at the end of August
2013, she was asked to stay by the third-named respondent and promised payment
without registering her as an employee for tax and national insurance and was
reassured that the second-named respondent would be finishing her exams shortly
to become a mortgage financial advisor and so there would then be more business
and administration work at the office, which the third-named respondent
disputed. As set out below on balance I find the third-named respondent’s
evidence more credible.
8. Whilst in the office the third-named respondent involved the claimant in the work of her office to assist her in learning new skills. At the beginning of July 2013 the claimant was given a key for the respondent’s office so that the claimant did not have to wait after dropping her child to school until the second or third-named respondent arrived. During one week in July 2013 the claimant attended the office in the absence of the second and third-named respondent.
9. Between client appointments the second and third-named respondents accompanied by the claimant frequently spent lengthy periods of time, sometimes up to two hours, in a nearby coffee shop.
10. On 7 August 2013 the third-named respondent was suspended by Legal & General and was no longer able to undertake client appointments. As a result the Money Matters group of businesses took over the third-named respondent’s client bank and the second-named respondent became part of their central team of advisors and continued thereafter to operate as Money Matters NI under the Money Matters Group’s observation and agency number, answerable to Mr Carl Allen who was in charge of compliance and sale support matters. On return from taking holidays in August the claimant was informed of the third-named respondent’s suspension. Following her suspension the third-named respondent struggled with her health and rarely attended the office thereafter.
11. The third-named respondent’s contract with Legal & General was terminated on 7 October 2013. On 8 October 2013 the third-named respondent was admitted to intensive care with pneumonia and has not returned to work since.
12. On 31 October 2013 the claimant was provided by Mr Carl Allen of Money Matters Portadown with business cards referring to her as sales support, with her mobile number to allow the claimant to refer on business from members of the Polish community. Requisite training for sales support which includes matters such as complaints procedures, financial crime and money laundering was not completed by the claimant.
13. On 10 October 2013 the second-named respondent sent an email to ask Mr Allen could he set up the claimant on the computer system for customers, the claimant was subsequently given a user name and password.
14. In mid-November 2013 the claimant spoke with the second-named respondent and put to her that she had not received any payment, needed the money and asked if the second-named respondent wanted her to leave because she could not pay her, the second-named respondent said no and asked the claimant to stay and to speak to her again at the end of November.
15. On 26 November 2013
the claimant spoke again with the second-named respondent and asked if and when
she could pay her. The second-named respondent in response advised the
claimant that she should leave because there was not enough business coming in
to be able to pay her. The claimant indicated to the second-named respondent
that she would be asking for money even if she were to leave. The second-named
respondent said she would speak to the
third-named respondent. The claimant left the respondent’s office on 29 November
and obtained paid employment elsewhere on 19 December 2013.
THE LAW
16. Under the Industrial Tribunal 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.
17. An ‘employee’ is an individual who has entered into or works under a contract of employment (being a contract of service or apprenticeship, whether express (oral or written) or implied).
18. Article 45 of the Employment Rights (Northern Ireland) Order 1996 provides for a worker’s right not to suffer unauthorised deductions from wages by his employer. A deduction occurs when the employer pays less than the amount due on any given occasion and includes a failure to make any payment.
19. Under the National Minimum Wage Act 1998 (NMWA) if a person is a ‘worker’ they are entitled to be paid at least the national minimum wage unless a specific exemption applies.
20. A ‘worker’ includes not only those working under contracts of employment but also those undertaking 'to do or perform personally any work or services for another party to the contract' (and they are not genuinely self-employed) and the worker's contract may be written, verbal or implied).
21. A specific exemption applies to ‘workers’ who are students undertaking work experience lasting up to one year as part of a UK further or higher education course.
22. The absence of any of the three ingredients essential to the definition of a worker: a contract, personally to do work, for another party to the contract, will take an individual outside the national minimum wage.
23. Purely family or friendly relationships where there is no intention to create legal relations and so, no contract to start with, fall outside the definition. Training contracts may also fall outside the NMWA where work is done effectively for the individual’s own benefit in training for an occupation rather than being required to do the work for another party to the contract, and is a question of fact for determination by the tribunal.
24. A volunteer (as opposed to a ‘Voluntary worker’ which is a category with specific exemption under the NMWA) does not have any form of contract of employment or contract to perform work or provide services and so is not a worker covered by the National Minimum Wage Act 1998. Volunteers can volunteer for anybody, not just organisations in the voluntary sector. A work shadowing placement which does not involve any work being performed will fall outside the NMWA. Someone who enters into an agreement or contract to work for experience will be a “worker” for national minimum wage purposes and entitled to be paid the national minimum wage in the normal way, unless they are a genuine volunteer or fall into one of the groups who are exempt.
25. Key elements in establishing whether someone has a worker’s contract include whether there is an obligation on the individual to perform the work and an obligation on the employer to provide the work, and whether the individual is rewarded for the work by money or benefits.
APPLYING THE LAW TO FACTS FOUND
26. The status of the claimant following the end of her period of work experience as part of her educational course was in dispute and whether she in fact volunteered to remain for further work experience or became an employee and or worker entitled to payment at least of the minimum wage. This is an issue of fact for the tribunal. I find that there was no express oral agreement made between the claimant and respondents. The question arises whether one might however be implied in the circumstances. The claimant on her own evidence asserted that she in mid-May 2013 was asked to stay on after the end of her course and told she would be paid but that no specific conversation as to payment terms took place, that she thereafter broached the matter of payment for her work on three occasions, that on the first occasion which she said was at the end of August, she was told she could not be offered paid employment but would be paid without registration for tax and national insurance, the next time in mid-November the second respondent asked her to return to her at the end of the month, and the third time at the end of November she was refused payment and left. If the claimant’s evidence were accepted that an agreement was reached at the end of August for payment without registration for tax and with which she was found complicit the question whether the contract was tainted by illegality and not enforceable would arise. However, given in particular the considerable time which passed, almost six months in total, during which time the claimant did not receive any payment but still was prepared to attend the respondent’s offices daily, the length of time between the claimant raising the matter of payment, lengthy periods spent by the claimant during working hours with the second and third named respondents in a coffee shop and in view of the third-named respondent’s suspension on 7 August 2013 following which she was unable to generate income, I on balance find more probable and credible the evidence of the third-named respondent that at the end of the claimant’s course she volunteered to continue her work experience in the third-named respondent’s office without any offer of payment by the third-named respondent or obligation for the claimant to attend or personally perform work or services for the respondents and without the intention to create legal relations and that when the claimant asked to be employed for ten hours the third-named respondent told her she was not in a position to offer her paid employment. On the claimant’s evidence the matter of payment was not again broached until mid-November 2013 with the second-named respondent at which time the discussion was deferred to the end of the month when the claimant was refused payment following which she left. On the evidence before me I consider there was neither a contract, expressly agreed, nor which could be implied in the circumstances such that the claimant was an employee or worker and so entitled as a minimum to the national minimum for work done for the respondents.
CONCLUSION
27. The claimant was not an employee or worker and has not suffered a loss arising from a breach of contract or unlawful deduction from wages by the respondent. The claimant’s claim is dismissed.
Employment Judge:
Date and place of hearing: 30 April 2014, Belfast.
Date decision recorded in register and issued to parties: