United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS J CONNOLLY (of Counsel) Messrs Kirk Jackson 97 - 101 Chorley Road Swinton Manchester M27 4AB
For the Respondent	Respondent neither Present or Represented


 


JUDGE WILKIE

1. This is an appeal by Gary John Redfern against a decision of an Employment Tribunal sitting at Manchester dated 21 July 1999 in which the Employment Tribunal came to decisions that the Applicant was not constructively nor unfairly dismissed by the Respondent, Redsure Electrical Ltd in Liquidation and so he was not entitled to payment in lieu of notice nor accrued holiday pay.
2. In this appeal we have received comprehensive submissions of Miss Connolly who appeared for the Appellant. It is clear that the Respondent, to the appeal and below, took no interest in defending the proceedings beyond the 14 May 1999 when the company went into voluntary liquidation. Prior to that, a Notice of Appearance had been put in, which sought on the face of it to raise substantive allegations against the Applicant. By letter dated 14 May 1999 the Managing Director of the company retracted all such allegations.
3. Thereafter the liquidators, Poppleton & Appleby, by a letter to the Tribunal dated 11 June indicated that they were not seeking to defend the claim. They took no part in the preliminary hearing of this appeal on 18 January when Mr Redfern was permitted to pursue the appeal to an inter partes hearing. Certain directions were made on that occasion. The Respondents did nothing to comply with those and accordingly on 9 February 2000 this Tribunal ordered that the Respondents be debarred from defending the appeal.
4. The Appellant was employed by the Respondents as a Sales Representative and ultimately as a director from May 1988 until his employment terminated on the 8 March 1999. He was due to return to work on the 8^th March, having been away on holiday but he did not attend work on that date. His intention not to attend work on that day was communicated to his employer by a letter written by his solicitors dated the 5 March. That letter written on his behalf says amongst other things as follows: -

"Our client informs us that an instruction has been given by the Company not to pay Mr Redfern's wages, including overtime payments due to him and further a reimbursement of travelling expenses has not been made to him. Whatever the reason for this extraordinary decision, we must inform you that the Company's conduct in failing to pay Mr Redfern's wages is a fundamental breach of the Contract of Employment and operates as summary dismissal of our client which is both wrongful and unfair. We are advising our client accordingly."

They then concluded the letter by saying: -

"May we also point out that it had been arranged that our client would, on his return from holiday, attend a job at the Marks & Spencer store in Aylesbury. Clearly fresh arrangements will now have to be made by the Company in this regard."

5. In his evidence to the Employment Tribunal, which was in the form of his confirmation of an attachment to his IT1 together with his answers to certain questions posed by the Tribunal, Mr Redfern indicated that as at the beginning of March 1999 he had not been paid a motor expenses allowance of £1,000 per month due to him for January and February 1999. In addition he had not been paid any overtime for which he had worked during February. He also stated that on Wednesday 3 March he telephoned the Company and spoke to Mark Redfern, his brother and an employee of the company who normally prepares the wage packets on the Wednesday of each week for wages to be paid on a Friday. He asked Mark Redfern to confirm that the overtime he had worked was being included in his pay packet for the week ending the 5 March. Mark Redfern said that he could not comment himself and he would have to speak to the Managing Director Eric Redfern about this. He then stated that he spoke to Eric Redfern on the 3 March and was informed that as the company was suffering hard times no Director would be paid until the situation improved. He believed that that meant no overtime would be paid to him. In his evidence to the Employment Tribunal he expanded on that and said that Mr Redfern had informed him that as an employee Director he would not be paid indefinitely, whereas other employees would be paid.
6. On the 4 March Mr Redfern spoke again to Mark Redfern when Mark Redfern asked if Eric Redfern had made it clear that he was not being paid any money whether wages, overtime, expenses or otherwise. The Applicant said that had not been his understanding Mark Redfern confirmed that, acting on the instructions of Eric Redfern, the Applicant had received no wage for the week ending the 5 March. All other employees of the Company received their salary as normal. It was following that telephone conversation that the Applicant took the advice which resulted in the letter of the 5 March.
7. The Employment Tribunal in their extended reasons referred to the fact that, according to them, the Applicant decided for himself that he would not return to work after being away on holiday and the effective date of termination was the 8 March. They refer in paragraph 4 to the letter of the 5 March which, according to the decision, sets out the reason for the Applicant terminating his employment. In paragraph 5 of their extended reasons, however, the Employment Tribunal conclude in sub paragraph 2 that he did not resign from his employment, let alone inform the Respondent that he regarded himself as having being constructively dismissed. They say that the Applicant himself brought his contract to an end by not returning to work following his holiday. That is the primary basis upon which the Tribunal concluded that he had not been constructively dismissed. In our judgement that is an inexplicable reason for this Tribunal to have given standing both their finding in paragraph 4 of their decision and the content of the letter of the 5 March to which they referred in that paragraph. It seems to us that this is one of these cases where one can say that this Tribunal had simply got this wrong. It is clear to us that the letter of the solicitors acting for Mr Redfern states in as clear terms as is possible both that he is regarding the contract as having come to an end and the reason for it being his allegation that there has been a fundamental breach, whether anticipatory or not, of contract by the employer in informing Mr Redfern that he was not to be paid his wages for that week. Therefore on that basis alone we conclude that this Tribunal decision is in error and ought not to stand.
8. However, the Employment Tribunal go on to conclude that even if he had resigned for that reason, that reason would not have amounted to a serious breach of contract.
9. They say in sub paragraph 3 of paragraph 5 that the Applicant had acted far too prematurely because, after he was informed by the Respondents, that the Company's Managing Director and majority shareholder Eric Redfern had decided that neither wages, overtime nor motor expenses were to be paid to the Applicant, he, the Applicant did not discuss that at all with Mr Eric Redfern before making his decision not to return to work. In our judgment that simply puts the cart before the horse. Whilst there may well be circumstances in which a statement by an employer to the effect that payment of wages will be deferred and asking the employee to come to talk to the employer about it, may preclude the employee immediately resigning prior to having heard the employers explanation, what we have in this case is the contrary position. The employer has made a clear and determined expression of its resolution not to comply with their contractual obligations in relation to pay and remuneration by refusing to pay wages as they fell due against the background where there was already a significant ongoing failure to pay expenses and to pay overtime.
10. It seems to us that this Tribunal misdirected itself as to the law in these circumstances in requiring Mr Redfern to have done something about it when his father, Eric Redfern, made it perfectly clear and unambiguous that the Respondent was in anticipatory breach of contract. The mere fact, as is subsequently recorded in the decision, that after his resignation, after the solicitors letter, and after the Tribunal proceedings had been commenced the wages and overtime were paid the following week, is neither here nor there. What the employee had to do was to consider the situation with which he was confronted on 4 March by what Eric Redfern had said. In our judgement what he did was legally entirely justifiable and was unambiguously a response to such a fundamental breach of contract that his termination of the contract amounted to a constructive dismissal.
11. It our judgement, on these two bases the Employment Tribunal erred as a plain matter of law and, therefore, their decisions dismissing his various claims on the basis that there was no constructive dismissal, ie for unfair dismissal, for payment in lieu of notice and two weeks accrued holiday pay should be overturned.
12. Miss Connolly has pointed out, as indeed is the case, that the Respondents through the liquidator have shown no interest what so ever in defending these proceedings. Furthermore any allegations that were made at an early point have now been withdrawn. Therefore we are in as good a position as any Employment Tribunal to go on from our primary conclusion that Mr Redfern was constructively dismissed to consider whether his dismissal was an unfair dismissal.
13. The position is that the Respondents have not sought and do not seek to put forward any reason for his dismissal and therefore this dismissal must operate as an unfair dismissal. That being so arithmetically certain consequences flow.
14. The Company is in insolvent liquidation and therefore the claims that Mr Redfern made are subject to the statutory regime established by Section 182 and 184 of the Employment Rights Act 1996 to which we have been referred. In particular the Secretary of State is under obligation, up to certain statutory maximum amounts, to meet any debts which have arisen at the point of dismissal. One such is in respect of the period of notice. The dates of employment were not disputed in the pleadings before the Employment Tribunal. Therefore, we take it as common ground that the period of notice was ten weeks. The amount which he received by way of salary overtopped the £230.00 per week statutory maximum and therefore we substitute an order that he is entitled to £2,300.00 being a payment in lieu of notice under Section 184, B. In respect of holiday pay under Section 184 C, the undisputed evidence before the Employment Tribunal and was that he had two weeks accrued holiday pay. Once again there is a statutory maximum of £230.00 and therefore we will substitute an award of £460.00 in respect of accrued holiday pay. As far as accrued overtime is concerned the evidence that was before the Tribunal apparently was that overtime which he had not been paid amounted to £250.00 which netted down to comes to £187.50 and therefore we make that as an award.
15. Finally as far as his unfair dismissal is concerned he is entitled to a basic award. Based on his ten years service up to the statutory maximum of £230.00 per completed year of service and given his age, therefore his basic award will be £2,300.00. Therefore we substitute each of these awards for the decision of the Employment Tribunal on these matters. This amounts to £5,247.50 and that is the totality of the award which we make in this case.