Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF: 1044/15

 

 

 

CLAIMANT: Lucia Martinez Seijas

 

 

RESPONDENTS: 1. NIT Ltd

2. Massimiliano Marciano

 

 

 

DECISION

The unanimous decision of the tribunal is that:-

 

(1) The second respondent is ordered to be dismissed as a respondent, pursuant to Rule 10(2)(K)/(J) of the Rules of Procedure.

(2) The first respondent was in breach of the claimant's contract of employment; and the tribunal orders the first respondent to pay to the claimant the sum of £13,731.12 arising from the said breach.

 

(3) Further, the first respondent unfairly dismissed the claimant; and the tribunal makes an award of compensation to be paid by the first respondent to the claimant in the sum of £6,767.48.

 

(4) The tribunal makes a declaration that the first respondent failed to give the claimant itemised pay statement, pursuant to Articles 40 and 44(3) of the Employment Rights (Northern Ireland) Order 1996.

 

Constitution of Tribunal:

Employment Judge (sitting alone): Employment Judge Drennan QC

Appearances:

The claimant appeared in person and was unrepresented; assisted by Ms L Kohanoff, Interpreter.

The respondents did not appear and were not represented.

 

Reasons

 

1.1 The claimant presented a claim against the respondents on 1 June 2015, in which she claimed unfair constructive dismissal, breach of contract, unauthorised deduction from wages and failure to make itemised pay statements. The respondents did not present a response to the tribunal in relation to the said claims.

 

1.2 At the commencement of the hearing the claimant accepted she was employed at all material times by the first respondent. In the circumstances, it was ordered that the second respondent be dismissed from the proceedings, pursuant to Rule 10(2)(K)(J) of the Rules of Procedure. Further, the claimant confirmed that, if the tribunal found the claimant's dismissal was unfair, the claimant wished to obtain, by way of remedy, an award of compensation and she was not therefore seeking an Order for Re-instatement and/or Re-engagement.

 

2.1 Having considered the evidence given to the tribunal by the claimant, the documents in the 'trial bundle' to which I was referred during the course of the claimant's evidence, I made the following findings of fact, insofar as relevant and necessary for the determination of the claimant's said claims, as set out in the following sub-paragraphs.

 

2.2 The claimant was born on 22 November 1984 and she was employed, on foot of a contract of employment dated 17 December 2014, by the first respondent (hereinafter referred to as the respondent) from 1 January 2014 to 27 May 2015. The claimant was employed as a Project Manager and, at the date of the termination of her employment on 27 May 2015, she was earning £1,916.67 (gross) per month and £1,549.56 (net) per month. As part of her duties, the claimant was required by the respondent to travel on behalf of the respondent, both inside and outside Northern Ireland and including parts of Europe and it was an express or in the alternative implied term of her contract of employment that the claimant would be reimbursed by the respondent in respect of her travel expenses so incurred by her during the course of her employment.

 

2.3 The respondent failed, at any time during the course of the claimant's employment with the respondent, to issue an itemised pay statement, pursuant to Article 40 of the Employment Rights (Northern Ireland) Order 1996 ('the 1996 Order').

 

2.4 The respondent, during the period of the claimant's contract of employment, failed to pay to the claimant the wages and expenses to which she was entitled on a regular and proper basis in accordance with the express and implied terms of the said contract of employment, despite repeated requests by the claimant to Massimiliano Marciano, the Managing Director of the respondent; and his promises and assurances, upon such requests, that he would do so. As a consequence, at the termination of her employment, the claimant had suffered a shortfall in the wages and expenses due and owing to her by the respondent, over the said period of her employment.

 

2.5 As a consequence of the matters set out above, the claimant wrote to the respondent on 27 May 2015, in which she said, inter alia:-

 

"This letter is to notify you I have decided to resign from my role as Project Manager at NIT Ltd due to the arising problems of the non-payment of my wages, what represents a fundamental breaching of our contract and of the law. Currently the company owes me £12,411.19. Please accept this letter as my official notice. Because the company has breached our contract, my last day here would be today 27/05/2015."

 

2.6 Following the termination of her contract of employment, the claimant was unemployed until 14 September 2015, when she obtained new employment in London at a higher salary to that under her contract of employment with the respondent. I was informed by the claimant she was not making any claim for loss of earning from 14 September 2015, in the circumstances. I am satisfied the claimant, in the period from 27 May 2015 to 14 September 2015, made considerable and reasonable efforts to obtain new employment, following the termination of her employment, both in Northern Ireland and in Great Britain, but was unsuccessful until 14 September 2015, as referred to above.

 

2.7 Following the termination of her employment, the claimant reviewed her bank statements and found that the respondent, at the date of the termination of her employment, the respondent owed her more than the sum set out in her letter of 27 May 2015; and, in fact, the respondent owed her, as set out in her claim form, the sum of £12,865.97 in respect of arrears of pay and the sum of £865.15 in respect of expenses, which said sums I accept, on the claimant's evidence, were due and owing to her on foot of her contract of employment at the termination of her said employment.

 

3.1 Relevant law

 

(i) Employment Rights (Northern Ireland) Order 1996 provides:-

 

Article 126 :

 

"(1) An employee has the right not to be unlawfully dismissed by his employer."

 

Article 127 :

 

"(1) For the purposes of this Part an employee is dismissed by his employer if ...

 

...

 

(c) The employee terminates a contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct."

 

Article 40 :

 

"(1) An employee has the right to be given by his employer at, or before the time at which any payment or wages or salary is made to him, a written itemised pay statement.

 

... ."

 

Article 44 :

 

"(3) Where on a reference under Article 43 an industrial tribunal finds -

 

(a) that an employer has failed to give an employee any pay statement in accordance with Article 40;

 

...

 

the tribunal shall make a declaration to that effect.

 

(4) Where on a reference in the case of which Paragraph (3) applies the tribunal further finds that any unnotified deductions have been made from the pay of the employee during the period of 13 weeks immediately preceding the date of the application for the reference (whether or not the deductions were made in breach of the contract of employment, the tribunal m ay order the employer to pay the employee a sum not exceeding the aggregate of the unnotified deductions so made."

 

Article 45 :

 

"(1) An employer shall not make a deduction from wages of a worker employed by him ... ."

 

Article 59 :

 

"(1) In this part 'wages' in relation to a worker means any sums payable to the worker in connection with his employment including -

 

(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise."

 

Article 55 :

 

"(2) ... an industrial tribunal shall not consider a complaint under this Article unless it is presented before the end of the period of three months beginning with -

 

(a) in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made.

 

...

 

(3) Where a complaint is brought under this Article in respect of -

 

(a) a series of deductions or payments.

 

the references in Paragraph 2 to the deduction or payment are to the last deduction or payment in the series or to the last of the payment so received ... ."

 

(ii) Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 ('the 1994 Order')

 

Article 3 (Contract Claim) :

 

"Proceedings may be brought before an industrial tribunal in respect of a claim of an employee for the recovery of damages or any other sum ...

 

...

 

(c) the claim arises or is outstanding on the termination of the employee's employment."

 

3.2 As stated in Harvey on Industrial Relations and Employment Law, Volume 2, Section D1, at Paragraph 403, it has long been held that:-

 

"In order for an employee to be able to claim constructive dismissal four conditions must be met -

 

(1)           There must be a breach of contract by the employer. This may be either an actual breach or an anticipatory breach.

 

(2)           That breach must be sufficiently important to justify the employee resigning or else it must be the last in a series of incidents which justify him leaving. Possibly a genuine, albeit erroneous interpretation of the contract by the employer will not be capable of constituting a repudiation in law.

 

(3)           He must leave in response to the breach and not for some unconnected reason.

 

(4)           He must not delay too long in terminating the contract in response to the employer's breach, otherwise he may be deemed to have waived the breach and agreed to vary the contract."

 

(See further Western Excavating v Sharp [1978] QB 761 .)

 

3.3 It should also be noted, in the above context, that a constructive dismissal is not necessarily unfair and it is normal for a tribunal, in order to make a finding of unfair constructive dismissal, to find the reason for the dismissal and whether the employer has acted reasonably in all the circumstances ( Stevenson & Company (Oxford) Ltd v Austin [1990] ICR 609) .

 

3.4 Even if an employee cannot establish a breach of an express term of a contract, it has also been recognised that a contract of employment includes an implied obligation that an employer would not, without reasonable and proper cause, act in a manner calculated to or likely to destroy or seriously damage the relationship of trust and confidence between an employer and employee. This is often referred to as the Malik term (see Malik v Bank of Credit & Commerce International SA [1997] UKHL 23 and Baldwin v Brighton & Hove CC [2007] IRLR 232 ).

 

3.5 As seen in Amnesty International v Ahmed [2009] ICR 1450 and Ministry of Justice v Sarfraz [UKEAT/0578/10] the phrases 'without reasonable and proper cause' and 'destroy or seriously damage' must be given their full weight. As Lord Steyn stated in Malik , the term is there to protect 'the employee's interest in not being unfairly and improperly exploited'; the conduct must, objectively speaking, if not destroy then seriously damage trust and confidence - mere damage is not enough.

 

In Abbey National PLc v Fairbrother [2007] IRLR 320 the Employment Appeal Tribunal set out the following useful guidance:-

 

"(30) ... conduct calculated to destroy or seriously damage the trust and confidence inherent in the employer/employee relationship may not amount to a breach of the implied term; it will not do so if the employer had reasonable and proper cause for the conduct in question. Accordingly, the questions that require to be asked in a constructive dismissal case appear to us to be:-

 

1. What was the conduct of the employer that is complained of?

 

2. Did the employer have reasonable and proper cause for that conduct?

 

If he did have such cause then that is an end of it. The employee cannot claim that he has been constructively dismissed.

 

3. Was the conduct complained of calculated to destroy or seriously damage the employer/employee relationship of trust and confidence?"

 

A failure to hold a proper appeal may be a significant breach of the implied term of trust and confidence.

 

3.6 The above authorities established it is an implied term, which is descriptive of conduct, viewed objectively, that is repudiatory in nature. In assessing whether or not there has been a breach, what is significant is the impact of the employer's conduct on the employee, objectively tested, rather than what, if anything, the employer intended (see further Woods v WM Car Services Peterborough [1981] IRLR 3) and the Malik decision. In the more recent decision of Buckland v Bournemouth University Higher Education Corporation [2010] EWCA Civ 121 , the Court of Appeal emphasised that a tribunal should determine the matter by reference to the law of contract and not by reference to the fairness and/or merits of the case:-

 

"the range of reasonable responses test is not appropriate to establish whether an employer has committed a repudiatory breach of contract entitling an employee to claim constructive dismissal";

 

and thereby confirming the test for establishing constructive dismissal remains objective (see Western Excavating v Sharp [1978] ICR 221 ). In the case of Tullett Prebon PLc v BGC Brokers LP [2011] IRLR 420 , it was confirmed that the test for determining whether there was a repudiatory breach of the implied term of trust and confidence had to be determined objectively, ie from the perspective of the reasonable person in the position of the innocent party.

 

In the decision of the Court of Appeal in the case of Nottingham County Council  v Meikle [2005] ICR 1 .

 

Keane LJ held:-

 

"It has long been held by the EAT in Jones v Sirl & Son (Furnishers) Ltd [1997] IRLR 493 that in constructive dismissal cases the repudiatory breach of the employer need not be the sole cause of the employee's resignation. The EAT there pointed out that there may well be concurrent causes operating on the mind of an employee whose employer has committed fundamental breaches of control and that the employee may leave because of both those breaches and another factor such as the availability of another job. It suggested the test to be applied was whether the breach or breaches were the 'effective cause' of the resignation. I see the attractions of that approach but there are dangers in getting drawn too far into questions about the employee's motives. It must be remembered that we are dealing here with a contractual relationship and constructive dismissal is a form of termination of contract by a repudiation by one party which is accepted by the other; see the Western Excavating case. The proper approach therefore, once a repudiation of the contract by the employer has been established, is to ask whether the employee has accepted that repudiation by treating the contract as at an end. It must be in response to the repudiation but the fact that the employee also objected to other actions or inactions of the employer not amounting to a breach of contract would not vitiate the acceptance of the repudiation ... Once it is clear the employer was in fundamental breach ... the only question is whether [the employee] resigned in response to the conduct which constituted that breach."

 

This dicta was followed by Elias J, as he then was, in the case of Abbeycars (West Horndon) Ltd v Ford [UKEAT/0472/07] , when he stated:-

 

"On that analysis it appears that the crucial question is whether the repudiatory breach played a part in the dismissal ... "

 

and

 

"It follows that once a repudiatory breach is established if the employee leaves and even if he may have done so for a whole list of reasons, he can claim that he has been constructively dismissed if the repudiatory breach is one of the factors relied upon."

 

and also was followed in the case of Logan v Celyn Home Ltd [UKEAT/0069/12] where HHJ Shanks stated:-

 

" ... It should have asked itself whether the breach of contract involved in failing to pay the sick pay [the relevant breach] was a reason for the resignation not whether it was the principal reason."

 

This approach was again recently confirmed and followed by Langstaff P in the case of Wright v North Ayrshire Council [EATS/0017/13] where he emphasised that it is an error of law for a tribunal, where there is more than one cause, to look for the effective cause in the sense of the predominant, principal, major or main cause and in doing so he raised concerns how the relevant law is expressed in Paragraph 521 of Harvey on Industrial Relations and Employment Law, Volume 1, Section D1.

 

In the 'summary head note', Langstaff P stated:-

 

"In order to determine a claim for constructive dismissal, a tribunal had applied to a test, referred to in Harvey, whether the contractual breach by the employer was 'the effective' cause 'of an employee's resignation'. It was now time to scotch any idea that this approach is correct if it implies ranking reasons which have all played a part in the resignation in a hierarchy so as to exclude all but the principal, main, predominant, cause from consideration. The definite article 'the' is capable of being misleading. The search is not for one cause which predominates over others, or which on its own would be sufficient but to ask (as Elias J put it in Abbey Cars v Ford) whether the repudiatory breach 'played a part in the dismissal'. This is required on first principles and by Court of Appeal authority (Meikle). The tribunal here appeared to seek for 'the' cause rather than 'a' cause ... ."

 

In Adams v Charles Zub Associates Ltd [1978] IRLR 551 it was held a failure to pay an employee's salary on the due date may amount to conduct which constitutes a breach going to the root of the contract or which shows the employer has no intention thereafter to honour the contract and thus, on the facts of a particular case, may justify the employee in resigning.

 

(See further Tolley's Employment Handbook Paragraph 53.10 where it is stated:-

 

"An employer has no right to suspend an employee without pay unless this is expressly provided for in the contract. A suspension without pay in the absence of a contractual right to do so may be a serious breach of contract enabling the employee to resign and claim constructive dismissal (Morrison v ATGWU [1989] IRLR 361) ... ."

 

3.7 As has long been recognised (see further Paragraphs 480 - 481.01 in Harvey on Industrial Relations and Employment Law, Section D1), many constructive dismissal cases which arise from the undermining of trust and confidence, can involve the employee contending that he left in response to a course of conduct carried on over a period of time, but the particular instance which caused the employee to leave may in itself be insufficient to justify his taking that action; but nevertheless, when viewed against a background of such incidents, it may be considered sufficient by the courts to warrant treating the resignation as a constructive dismissal ('the last straw' doctrine). As was made clear in the case of London Borough of Waltham Forest v Omilaju [2005] IRLR 35, in order to result in a breach of the implied term of trust and confidence, a 'final straw' which is not itself a breach of contract, must be an act in a series of earlier acts which taken together amount to a breach of the implied term. The Court of Appeal held in particular:-

 

"The act does not have to be of the same character as the earlier acts. Its essential quality is that, when taken in conjunction with the earlier acts upon which the employee relies, it amounts to a breach of the implied term of trust and confidence. It must contribute something to that breach, although what it adds may be relatively insignificant so long as it is not utterly trivial. Thus, if an employer has committed a series of acts which amount to a breach of the implied term of trust and confidence but the employee does not resign and affirms the contract, he cannot rely on those acts to justify a constructive dismissal if the 'final straw' is entirely innocuous and not capable of contributing to that series of earlier acts. The 'final straw', viewed in isolation, need not be unreasonable or blameworthy conduct. ... Moreover an entirely innocuous act on the part of the employer cannot be a 'final straw', even if the employee genuinely, but mistakenly, interprets the act as hurtful and destructive of his trust and confidence in the employer. The test of whether the employee's trust and confidence has been undermined is objective."

 

(See further Pan v Portigon AG London Branch [2013] UKEAT/0116 where the tribunal followed the guidance of Omilaju and found a return to work letter sent by the respondent to the claimant as ' innocuous', insofar as it was relied upon by the claimant, as the last straw entitling him to regard himself as discharged from further performance.)

 

4.1 In her claim form, the claimant made a claim for notice pay; but I was satisfied no such payment was payable by the respondent, following the termination by the claimant of her employment without notice, as set out in her letter, dated 27 May 2015. Further, the claimant in her claim form made a claim, on any finding of unfair dismissal, for compensation arising from the effect on her health and her personal life arising from her dismissal and in essence, 'stigma' damages for damage to her person and reputation. I was satisfied on the facts of the case, the claimant was not entitled to be so compensated for same (see further Morgans v Alpha Plus Security Ltd [2005] IRLR 234 and Paragraph 1.95 - 1.100 Korn on Employment Tribunal Remedies).

 

4.2 Although the claimant was not provided with an itemised pay statement, pursuant to Article 40 of the 1996 Order, on the evidence before me of the claimant's shortfall in relation to her wages and/or expenses, and since this shortfall related to the whole period of her employment, I was not able to identify any specific unnotified deductions and I therefore declined to make any order pursuant to Article 44(4) of the 1996 Order.

 

4.3 The claimant, in her claim form, made a claim for breach of contract, pursuant to Article 3 of the 1994 Order and, in the alternative, Article 55 of the 1996 Order. Since, as set out later in this decision, I was able to make a decision, in relation to the claimant's contract claim, pursuant to Article 3 of the 1994 Order, it was not necessary for me to consider and determine the claimant's alternative claim for unauthorised deductions from wages pursuant to Article 55 of the 1996 Order; and, in particular, given the shortfall related to wages and/or expenses which had occurred at various dates over the period of her employment, whether the sums claimed were 'a series of deductions' in the circumstances (see further Bear Scotland Ltd v Fulton [2015] IRLR 15 and Harvey on Industrial Relations and Employment Law, Volume 1, Section B1, Paragraphs 376.03 - 376.09).

 

5.1 In light of the facts as found by the tribunal, and after applying the legislative provisions and the guidance set out in the legal authorities referred to in the previous paragraphs of this decision, I reached the following conclusions, as set out in the following paragraphs.

 

5.2 I am satisfied the failure of the respondent to pay to the claimant the said shortfall at the date of the termination of her employed on 27 May 2015 in her wages and/or expenses, which were owing to her over the period of her employment, the respondent was in breach of the claimant's contract of employment. I therefore order the respondent to pay to the claimant the sum of £13,731.12 arising from the said breach, which sum is made up as follows:-

 

(i) £12,865.97 (outstanding wages)

(ii) £ 865.15 (outstanding expenses)

£13,731.12

 

5.3 Further, I am satisfied the failure to pay the claimant the sums set out in Paragraph 5.2 herein, despite the claimant's repeated requests for payment, was a serious repudiatory breach of the claimant's contract of employment going to the root of the contract and was a reason for/played a part in her decision to resign; and in the circumstances she was justified in doing so. By the respondent's failure to pay the said sums, despite repeated requests by the claimant to do so, the respondent showed it had no intention of honouring the express terms of the contract of employment (see Adams v Charles Zub Associates Ltd [1978] IRLR 551 ). Also, the respondent was in breach of the implied term of her contract of employment by doing so in a manner that was likely to destroy or seriously damage the relationship of trust and confidence between the claimant and the respondent (the Meikle term). In such circumstances the tribunal was satisfied not only was the claimant constructively dismissed but also the said dismissal was unfair. Further, the respondent in failing to pay the claimant the said shortfall, despite repeated requests, failed to act reasonably in the circumstances (see Stevenson & Co (Oxford) Ltd ). I am satisfied the claimant, since the termination of her employment took all reasonable steps to mitigate her loss by seeking to obtain alternative employment (see further Wilding v BT [2002] IRLR 524 ).

 

5.4 The tribunal therefore assessed the compensation to be paid by the respondent to the claimant in respect of her claim of unfair dismissal as follows:-

 

A. Basic Award

 

£479.16 x 1 £ 479.16

 

B. Compensatory Award

 

(1) Loss of earnings from

27 May 2015 to 14 September 2015

at £387.39 per week

(15.2 x £387.39) £5,888.32

 

(2) Loss of statutory rights £ 400.00

£6,288.32

 

Total Monetary Award (A + B) £6,767.48

 

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

 

5.6 The Employment Protection (Recoupment of Jobseeker's Allowance and Income Support) Regulations 1996, as amended, apply to this decision. Your attention is drawn to the attached Recoupment Notice, which forms part of this decision.

 

 

 

 

 

 

 

Employment Judge

 

 

Date and place of hearing: 24 September 2015, Belfast

 

 

Date decision recorded in register and issued to parties: