Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:    2638/14

 

 

 

CLAIMANT:                      John White

 

 

RESPONDENTS:              1. Grahams Kitchen Centre Ltd

                                        2. George Graham

                                       

 

 

DECISION

 

The unanimous decision of the tribunal is that:

 

(i)       by consent, we order the first-named respondent to pay the claimant the sum of £600.00 in respect of his claim for holiday pay.

 

(ii)      the claimant’s claim for redundancy pay is well-founded and we order the first-named respondent to pay the claimant the sum of £13,560.00.

 

 

 

Constitution of Tribunal:

 

Employment Judge:         Employment Judge McCaffrey

 

Members:                        Mrs V Walker

                                        Mr I Atcheson       

 

 

Appearances:

 

The claimant was represented by Mr Sean Doherty, Barrister-at-Law, instructed by James Boston and Sullivan Solicitors.

 

The respondents were represented by Mr George Graham on the first day of hearing.  Both respondents were represented by Mr Mark Mason on the second day of hearing.

 

 

ISSUES

 

1.       The issues before the tribunal were:

 

          (i)       whether the claimant had been made redundant by his employer, the first-named respondent;

 

          (ii)      whether he was entitled to a redundancy payment;

 

          (iii)      whether the claimant was entitled to holiday pay in respect of untaken holiday accrued in 2013 and 2014; and

 

          (iv)     whether the claimant was entitled to notice pay.

 

2.       The respondents disputed all of these claims.  After some discussion on the second day of hearing, the parties agreed and requested that we should make an order by consent that the first-named respondent should pay to the claimant the sum of six hundred pounds in respect of the holiday pay claim and we so order.  The notice pay claim was withdrawn, leaving the redundancy pay claim to be decided.

 

FACTS

 

3.       We heard evidence from the claimant and from Mr George Graham on behalf of the respondents.  There were also a number of documents opened to us in the course of the hearing.  On the basis of the evidence we have heard, we make the following findings of relevant facts.

 

4.       The claimant was employed as a kitchen fitter by the first-named respondent from 23 September 1978 until the Summer of 2014.  At the date when his employment ended the claimant was aged 61.  He usually worked a 40 hour week and at the end of his employment he was being paid £11.30 per hour.

 

5.       It was the claimant’s evidence that he had carried out kitchen fitting as directed by Mr Graham, a director of the first-named respondent.  Power tools had been supplied to him by the first-named respondent although he had some hand tools of his own.  He carried out all of his work under the direction of Mr Graham.  The last work which he did for the first-named respondent was in or about June 2014.  He did not receive any work during July, August or September.  He was told that there was no work for him to do.  The claimant’s evidence was that he spoke to Mr Graham in June 2014 at which stage Mr Graham indicated that he was not doing any more work on kitchens, bedrooms or bathrooms.  The claimant’s evidence was that he told Mr Graham that if he wasn’t doing any more work he would have to pay him (the claimant) off and give him his redundancy money.  The claimant said that Mr Graham’s response was that if he had to pay the claimant a sum of money, should it be £10,000, £20,000 or £50,000, then he couldn’t do it.  Mr Graham’s account of this was that he had a conversation with the claimant and his wife one day in his office.  The claimant however said that he had had an initial discussion with Mr Graham some weeks before the conversation at which his wife was present and we accept the claimant’s recollection of this.

 

6.       Mr Graham asserted both in his direct evidence and in cross-examining the claimant that he had offered the claimant alternative work carrying out kitchen fitting for a company called “The Kitchen Company” which was run by a man called David Agnew.  In his evidence Mr Graham indicated that he did not have any business relationship with Mr Agnew.  It transpired that The Kitchen Company had moved into the showroom formerly occupied by Grahams Kitchen Centre Limited and was in the business of selling and fitting kitchens.  Mr Agnew was paying Mr Graham rent for the premises.  Mr Graham said clearly in his evidence that he was no longer selling kitchens to the public.  It was Mr Graham’s evidence to the tribunal that Mr Agnew would have been happy to use the claimant’s skills in relation to kitchen fitting.  Mr Graham indicated that he had told the claimant that he could still be employed by Grahams Kitchen Centre Limited but carry out the work for The Kitchen Company.  He explained to the tribunal that he anticipated that The Kitchen Company would be invoiced by the first-named respondent for work carried out by the claimant and the first-named respondent would then pay the claimant for the work carried out.  The claimant was understandably unhappy with this proposed arrangement and further was clear in his evidence to the tribunal that this had not been discussed with him in clear terms.  It was the claimant’s evidence that Mr Agnew had not spoken to him on this issue.  We accept that this offer, which was somewhat nebulous, was not suitable alternative employment, as it was uncertain and would have involved the claimant carrying out work for someone other than his employer. 

 

7.       It was put to Mr Graham in cross-examination that if, as he agreed, he was stopping selling kitchens, bedrooms and bathrooms then his requirement for a kitchen fitter would cease or diminish.  His answer was, “Not necessarily”.  He suggested that this was an assumption on part of the claimant as there would be work available through The Kitchen Company.  However the respondents did not produce any evidence of having offered the claimant specific work with The Kitchen Company.

 

8.       It was clear from the evidence before us from both the claimant and the respondent that no efforts were made by Mr Graham to get the claimant to come back to work in July, August or September 2014 and that the claimant had worked and been paid only sporadically by the first-named respondent from 2013 up to June 2014, due to lack of work.  There had been no formal termination of employment by the respondents.  On 16 October 2014 the claimant’s solicitor wrote to the second-named respondent Mr Graham in relation to a redundancy payment.  The letter read as follows:-

 

                              “Dear Sir

 

                              Re Our Client - John White

 

                    We confirm we have received instructions from Mr White regarding his employment with you.

 

          We understand from our client that he worked for you as an employee from September 1978 as kitchen fitter and worked within your business known as Graham’s Kitchen Centre until in or about June 2013.  From June 2013 our client continued to be employed by you carrying out alternative work to his usual job on units attached to the property at Woodgreen Road preparing the units for rental.  Further we are instructed that the number of hours you employed our client has been gradually reduced since June 2013 and that our client has not worked for you in any capacity since in or about July 2014.

 

                    Given that our client has not worked for a continuous period in excess of four weeks or for a period of six weeks in the last 13 weeks we put you on notice of his intention to claim redundancy.  Please let us have your proposal for payment of the redundancy money due to him?

 

          If we do not hear from you within seven days we shall begin legal proceedings for recovery of the redundancy payment without further notice.

 

                    Yours faithfully”

 

9.       Although Mr Graham initially indicated that he had not received this letter, he subsequently agreed that he had received it when reminded by Mr Doherty that he had acknowledged receipt of the letter by email to the claimant’s solicitor.  The email however was not produced to us at the hearing.

 

10.     The claimant’s evidence was that when working for the first-named respondent, he worked 40 hours per week and was paid £11.30 per hour (gross) meaning that his gross pay was £452 per week.  He indicated that his take home pay was approximately £300 per week. 

 

11.     In his claim form the claimant asserted that his employment with the first-named respondent had ended on 30 June 2014.  In the response form the first-named respondent disputed that the claimant had been dismissed and then at paragraph 4.1 of the response form, the first-named respondent agreed that the dates of employment given by the claimant were correct.  At paragraph 4.2, which says,

 

                    “If ‘No’, please give dates, state whether the employment is continuing and say why you disagree with the dates given by the claimant”. 

          In answer to the question,

 

 “Is their employment continuing?”

 

          The answer given was,

 

                      “Yes”. 

 

          No other information was given in the response form, supporting the respondents’ point of view.  The respondents were also not legally represented at the first hearing and did not address the issue of the termination of the claimant’s employment during that hearing.

 

The Relevant Law

 

12.     The law in relation to redundancy payments is to be found at Part XII of the Employment Rights (Northern Ireland) Order 1996 (as amended).  The right to a redundancy payment is set out in Article 170 of the 1996 Order and provides as follows:-

 

                      “170(1) an employer shall pay a redundancy payment to any employee if the employee –

 

                            (a)    is dismissed by the employer by reason of redundancy, or

 

                            (b)    is eligible for a redundancy payment being the reason of being laid off or kept on short time. 

 

                      (2)  Paragraph 1 has effect subject to the following provisions of this Part (including, in particular Articles 175 to 179, 184 to 187, 190 to 196 and 199)”.

 

          The definition of redundancy is given in Article 174 which provides as follows:-

 

                      “(1)   For the purposes of this Order an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to –

 

                              (a) the fact that his employer has ceased to intends to cease –

 

                                    (i)     to carry on the business for the purposes of which the employee was employed by him, or

 

                                    (ii)    to carry on that business in the place where the employee was so employed, or

 

                              (b) the fact that the requirements of that business –

 

                              (i)     for employees to carry out work of a particular kind, or

 

                              (ii)    for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish ....”

 

13.     The provisions in relation to eligibility for redundancy payment by reason of lay off or short time are to be found in Articles 182 to 185 of the 1996 Order.  As pointed out in Harvey on Industrial Relations and Employment Law at Division B, paragraph 1957 and following, there are a number of conditions to be satisfied.  The first is that there must be the necessary length of time spent on lay off or short time; the employee must serve a notice of intention to claim; the employee must properly terminate his contract of employment; and there must be no reasonable expectation of a resumption of normal working.  This last condition applies only if the employer contests the claim by serving a counter notice.

 

14.     Harvey notes (see paragraphs 1965 and 1966) that the employee’s notice to terminate may be given at the same time as he gave notice of intention to claim.  The Courts and Tribunals have taken a generous view of the evidence in favour of the employee.  In Walmsley v C&R Ferguson Ltd [1989] IRLR 122, the claimant had sent a letter to his employer requesting that he either be employed full time or made redundant and adding, “If you do not wish to do any of the above, then I am left with no option but to resign and instigate tribunal proceedings against you.  I look forward to hearing from you within seven days.”  The claimant in that case admitted in cross examination that he had not given one week’s notice of termination because he had not understood the Citizens Advice Bureau (from whom he had sought advice) to say that notice was necessary.  The Court of Session on appeal said that the letter was capable of being a resignation and that it must be recalled that the claimant was a working man and not familiar with statute law, who might not have fully understood the advice given to him by ACAS.  The notice which the claimant must give must be at least one week or longer if his contract of employment so specifies.

 

REASONS AND DECISION

 

15.     This issue we have to decide relates to whether the claimant, who had not done any work for the first-named respondent since June 2014, fulfils the conditions for a redundancy payment under Articles 182-185 of the 1996 Order, also known as the LOST provisions (“Lay-off and Short-Time”).  It was not disputed that the claimant had done no work for the first-named respondent since June 2014, so he had been laid off for a continuous period in excess of 4 weeks as required by Article 183(2).  In spite of the respondents’ suggestion of alternative work, no such offer of work had been made to the claimant in July, August or September 2014.  We are satisfied that there was no indication from the employer that he denied the claimant was redundant or that there was any realistic prospect of the resumption of work.  The letter of 16 October 2014 is clearly a notice of intention to claim a redundancy payment; the only real issue is whether the claimant has properly terminated his contract of employment as required by Article 185. 

 

16.     Although it is not essential to this decision, we record that we agree there was a redundancy situation in existence, given the respondent’s work had diminished considerably, if not actually ceased.  We also accept that the “offer” of work to the claimant, with no formal arrangement or transfer of undertaking, does not abrogate an employer’s responsibility to pay redundancy to an employee on cessation/diminution of this business.

 

17.     Harvey confirms that notice to terminate employment can be given at the same time as the notice of intention to claim a redundancy payment and indeed, in Walmsley the notice was given in the same letter.  Given that the letter of 16 October 2014 from the claimant’s solicitor to the first-named respondent is the only correspondence between the two, can it be deemed to be notice to terminate the contract?  In Walmsley, the letter had been written by the claimant himself, not a solicitor as in this case.  Mr Walmsley’s letter also put his employer on notice that if the employer did not either make him redundant or employ him full-time, “then I am left with no option but to resign and instigate tribunal proceedings against you”.  By contrast, the letter of 16 October on behalf of the claimant does not specifically mention resignation.  It does however note that the claimant had not worked for the first-named respondent “in any capacity since in or about July 2014”.  To us, this implies the relationship is at an end.  The letter then set out the notice of intention to claim redundancy and finished with the words, “If we do not hear from you within seven days we shall bring legal proceedings for recovery of the redundancy payment without further notice”.  Redundancy is only payable on termination of an employment relationship and this letter infers 7 days’ notice as required by Article 185(2).  The proceedings in the Industrial Tribunal commenced on 18 November 2014. 

 

18.     The first-named respondent had not issued any counter notice suggesting the claimant was not redundant.  On balance, and taking account of the fact that the claimant had a lawyer acting for him and who prepared the letter of 16 October, we are satisfied that that letter constitutes notice of termination of employment and that the claimant’s effective date of termination of employment was 23 October 2014.  This is particularly so given that the claimant had already verbally requested his redundancy payment from the first-named respondent twice, no work had been offered to him for over three months and the first-named respondent made no meaningful response to the letter of 16 October.  Accordingly, we find that the claimant is entitled to be paid a redundancy payment by the first-named respondent.  The claimant was paid £11.30 per hour for a 40 hour week.  His gross pay was therefore £452.00 per week.  He had 36 years’ service and was aged 61 at the date of dismissal.  He is therefore entitled to the maximum redundancy payment of 20 years, multiplied by 1.5 weeks’ gross pay for each year of service, calculated as follows:

 

          £452.00 x 20 years x 1.5 = £13,560.00.

 

          We order the first-named respondent to pay this amount to the claimant.

 

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

 

 

 

 

Employment Judge:      

 

 

Date and place of hearing:         9 and 23 January 2015, Belfast.

 

Date decision recorded in register and issued to parties: