United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	In Person
For the Respondent	MR M J DIGBY (Representative)


 


MR COMMISSIONER HOWELL QC

1. In this case Mr Michael James Packer seeks to have set aside as erroneous in law the decision of the Chairman of the London (North) Employment Tribunal, sitting alone, at a disputed hearing on 1 March 1999. That decision is recorded in a reserved decision with extended reasons, set out at page 5 – 7 of the Appeal File before us, sent to the parties on 15 April 1999.
2. The issue before the Employment Tribunal, in the proceedings originally brought by Mr Packer by Originating Application dated 28 October 1998, was whether Mr Packer was due money for unpaid holiday entitlement on the termination of his employment with a firm called Analytical Systems Ltd which ceased to employ him on 7 October 1998.
3. The sole Director and principal proprietor of Analytical Systems Ltd is a Mr Digby, and it was a simple clash of factual evidence and understanding between Mr Packer and Mr Digby, about what Mr Packer was entitled to on leaving the firm's employment, that gave rise to the proceedings before the Tribunal.
4. The decision of the Tribunal was that Mr Digby's company was ordered to pay Mr Packer a sum equivalent to five days' pay, for what the Tribunal found to be an outstanding entitlement by reference to holiday pay, and additional days worked at the beginning of October 1998 for which Mr Packer had not already been paid by the company.
5. The company, through Mr Digby, had contended that Mr Packer was not entitled to any more remuneration than he had already received, and indeed had been overpaid by some two and a half days, when the calculations were looked at properly.
6. The appeal to us, brought by Mr Packer's Notice of Appeal dated 19 April 1999, contends that in view of the Tribunal's findings, which broadly were to the effect that his evidence on the disputed issues of fact was to be preferred, the actual result imposed by the Tribunal Chairman had been incorrect as it overlooked or failed to pay due regard to his own evidence that a proper calculation should yield him the equivalent of ten days additional pay rather than five. The Chairman had given no reason for rejecting his evidence on that simple issue of fact.
7. This appeal came before a different division of the Employment Appeal Tribunal on 20 October 1999 when the Tribunal then sitting under the Chairmanship of H.H.Judge Clark, directed that there should be a full hearing against the substantive decision of the Chairman on the ground that there was an arguable illogicality and thus a perversity in the recorded reasons for the decision. The Chairman had apparently indicated that he preferred Mr Packer's evidence but then had proceeded on the basis of the company's evidence, in practice Mr Digby's evidence, on one principal issue where a dispute of fact existed between them.
8. The appeal is resisted by Mr Digby on behalf of his company, and in the Notice of Answer to the appeal lodged dated 10 December 1999 at pages 3(a) - 3(b) of the appeal file the Respondent company cross-appeals on the ground that the £700 awarded by the Tribunal to Mr Packer was itself too much, and that Mr Packer had not been entitled to any additional pay in respect of outstanding days of holiday entitlement.
9. Mr Packer and Mr Digby have appeared before us today to argue their respective points of view on the appeal and the cross-appeal. It is apparent that there are very substantial outstanding issues of fact between them which even with the lapse of time have not been resolved to the satisfaction of either of them.
10. The judgment of this court on the preliminary hearing, as we have said, gave an indication of the potential issue on Mr Packer's appeal on which this full hearing was directed and the apparent illogicality in the stated reasons by the Chairman. That can be identified by reference to the extended reasons which (as corrected to put right a calculation error) appear at pages 5 - 7 of the appeal file before us. It is recorded there and is not in dispute before us, that the Applicant had left his employment on 7 October 1998 and that although his last pay cheque was for the month of September he did actually work for two and a half days in October for which he had not been paid. The question of whether he was entitled to anything more than two and a half days additional pay therefore dependeds on his claim to be entitled to payment in respect of unpaid days of holiday entitlement, under the terms of his contract of employment, which claimed he had not taken but was due to him for 1998. As recorded by the Tribunal Chairman, the only common ground between the parties was that under the terms of his contract he was entitled to seventeen and a half days holiday for the year 1998 in all. The issue of fact was how many of those he had already taken.

As recorded in the Tribunal's amended statement of reasons:

"3 Although there was nothing in writing to suggest that the Respondent would pay compensation for holidays accrued but not taken at the date of termination, Mr Digby, for the Respondent did agree in September 1998 that the Respondent would pay compensation to the Applicant for any untaken leave that may be due to him at the date of termination."

[I should interpose here that Mr Digby told us today that he disputes, as a matter of fact that he did in fact agree anything in those terms but that is a matter we will have to deal with later in the course of this judgment]

"4 The Applicant was entitled to seventeen and a half days leave in 1998 of which he had taken fifteen as at the date of termination. While he had been away for ten days in February 1998 and had not supplied the Respondent with a Doctor's Certificate, he had since produced a letter from his medical adviser to suggest that five days of it was recommended as part of his treatment."

"5 The Applicant's net pay amounted to £2,400 per month, which having divided that figure first by 52 and then by 4 equated to £140 per day."

"6 I have come to the following conclusions. This was a case where the Applicant and his former Managing Director are still clearly at loggerheads. Only one fact was agreed, all the others being at large. On balance, I prefer the evidence of Mr Packer. I was not however prepared to accept that the fortnight's absence in February was all holiday. The Applicant had undergone an unpleasant medical procedure as an outpatient, with the recommendation that he followed it with a week's recuperation. While the Applicant was absent for two weeks in February, I find that the first week was sickness absence, while the second week was indeed holiday. I find that the Applicant is entitled to two and a half days for the balance of his holidays, as agreed with Mr Digby and the further two and a half days which Mr Digby indicates that he worked in October. That makes in all a total of five days at £140, being a total of £700."

11. It had been Mr Packer's contention before the Tribunal that although he accepted that he had taken five days off in the first week in February, for recuperation, for which he subsequently produced confirmatory medical evidence, the second five days which were in issue between him and Mr Digby, namely the days from the 9^th – 13^th February 1998 inclusive, had in fact been days on which he had worked. Mr Digby disputed this and contended that he had been away for a whole fortnight in February, that is ten complete working days with the consequence that he only had a maximum of two and a half days outstanding holiday entitlement due to him from the seventeen and a half which were agreed.
12. Thus there is an apparent inconsistency in paragraph 6 of the Tribunal Chairman's reasons, in that on the principal issue of fact between the parties, (which is as common ground was in issue and was argued before him,) while saying that he preferred the evidence of Mr Packer, he nevertheless appears in practice to have accepted the evidence of Mr Digby and rejected that of Mr Packer about the crucial issue of whether the second week in February, the 9^th – 13^th had in fact been a working week so far as Mr Packer was concerned. That apparent inconsistency in paragraph 6 is unexplained and as we have said, it is common ground between the parties before us (who agreed on this if little else) that the factual issue of whether Mr Packer had or had not been working during the second week in February, was fairly and squarely before the Tribunal and evidence on this was given to the Tribunal in the form of oral evidence by both parties and in the form of documents they produced.
13. Having considered the arguments submitted to us we have been unable for our part to understand this apparent inconsistency in the Tribunal Chairman's stated reasons and have therefore concluded that the decision as there recorded is flawed and erroneous in law, in that it fails to address the evidence, that it is common ground the Applicant did put before it, showing that he had worked in the week beginning the 9 February. We think that there may be some ground for thinking that there was confusion on the part of the Chairman in the way he recorded his reasons in paragraph 6, as indeed it appears that there was confusion on his part in the figures he was working with, which had to be corrected by the issue of an amended decision. We fully accept that, as is apparent from the Chairman's observations which were obtained at the direction of this Tribunal at preliminary hearing, this developed into an extremely difficult hearing for the Chairman and his task as the rifts between the two individuals before him were explored during the course of the hearing was a very difficult one. The fact that the hearing was in effect a failure as a way of bringing the matter to a satisfactory resolution appears to all three of us to demonstrate clearly the lack of wisdom, in this kind of case in particular, in disputed issues of fact on employment matters being brought before a Chairman alone to deal with. The normal practice of having such matters dealt with before a fully constituted Employment Tribunal, with non-legal members with experience of employment practice, enables such confusions and difficulties as appear to have risen in this case to be dealt with much more satisfactorily or avoided altogether. All events the result of what happened in this case has been, in our judgment, a flawed decision and for that reason we find it erroneous in law and we set it aside.
14. As we canvassed with the two parties in the course of the hearing, that leaves this Tribunal with the decision on what to do with the case, in order to bring it to the most speedy and satisfactory conclusion.
15. We do not consider that any useful purpose would be served by remitting the case for yet another Tribunal hearing which would involve both parties and the public in additional expense and delay. Consequently, as we made clear to both parties in the course of the hearing, we have determined that the right course for us is to give the determinations we consider to be required on the facts as they are contained in the documents and the material before the Tribunal, supplemented by the factual submissions and evidence which both parties made in detail to us in the course of the hearing.
16. The two issues which appear to us to arise, and to require to be determined, are first whether as Mr Digby contends on the cross-appeal, Mr Packer was in fact claiming an entitlement that was never his on the ground that his contract of employment did not entitle him to any outstanding payment for untaken holiday at the conclusion of his time with the company. Mr Digby submitted that it had always been the practice in his company that departing employees would not be given any payment for final outstanding days of untaken holiday. The day of their departure would always be arranged by amicable agreement to take place at a time when any previous days of untaken holiday were taken up before the contract of employment came to an end.
17. He said that it would be a matter of goodwill, on his part and on the part of the company as employer, if any additional payment was made on termination of employment for days of holiday still untaken at that date.
18. However, he conceded that this was never expressly mentioned to Mr Packer in the course of Mr Packer's employment and that any such practice in this particular company would have been something of which Mr Packer could not be expected to have been aware. Mr Packer's contract expressly provided that he was entitled to five weeks holiday with pay per year. It was on that basis that the seventeen and a half days calculation had been accepted before the Tribunal for the period of Mr Packer's employment in 1998.
19. We do not consider that it is arguable that Mr Packer or any other employee is bound by a restriction of the kind alleged on what would be the usual and normal entitlement of an employee to be paid the balance of anything due to him for outstanding holiday entitlement on the termination of his employment. We do not consider that that would be a normal interpretation of Mr Packer's contract and of his rights as an employee. As is conceded such a special restriction had never been expressly mentioned to or agreed with him: and we consider it most unlikely that such an agreement would have been forthcoming. In addition there is the apparent evidence before the Chairman of some form of acceptance, even if not formal agreement, on the part of Mr Digby at the time when Mr Packer's departure was being arranged, that compensation for untaken leave would be paid to him. On that basis, which we find would have been a reasonable basis for Mr Packer's departure to be negotiated, we cannot accept that there is any arguable ground for taking account of Mr Digby's alleged special restriction and we do not accept that such a restriction binds Mr Packer, so far as the issues before us are concerned. Consequently we reject Mr Digby's submissions on the cross-appeal.
20. The second issue before us is that raised by Mr Packer on the appeal itself, which is a simple issue of fact on whether Mr Packer did or did not work the second week in February 1999, the 9^th – 13^th inclusive. The only evidence before the Tribunal consisted of the oral evidence of Mr Packer himself, which he confirmed to us, to the effect that he had in fact attended at the Respondent's offices and visited clients and done his normal work in that particular five days. This was supported by documentary evidence in the form of his own personal expense sheets at page 11 of the appeal file before us which for the relevant week show him incurring expenses in a fairly modest degree, on only three days of that week relating to two existing clients of the company which he is recorded as having visited, and the purchase of a small amount of stationery. The other piece of documentary evidence before the Tribunal is an extract from his own personal diary, confirming one appointment with a client in the company's premises on Monday 9^th, and three other business appointments in the course of the week, (one of which was cancelled) together with a note to himself to make one business phone call by arrangement on the afternoon of Friday 13^th.
21. Mr Digby's evidence before the Tribunal and confirmed to us consisted of his own oral evidence that he had not himself any recollection of having seen Mr Packer in the office during that week, although he accepted that it was difficult to be categoric about one particular week at this distance in time which was a very busy period time for the company when they were attempting to re-write their software. He also accepted that Mr Packer may at any rate have been in the office on the Monday for the specific Monday appointment. The documentary evidence produced to the Tribunal on behalf of the Respondent, which we have not ourselves seen but accept its effect, consisted of an extract from the office diary, which was said not to have contained any specific entries for Mr Packer that week. However Mr Digby accepted that it would not have been unusual for Mr Packer's appointments not to appear in the general office diary as he was a trusted Sales employee and controlled his own time without minute supervision on Mr Digby's part. On this, as on the other factual issues before us, Mr Digby gave his evidence very clearly and straightforwardly. We accepted him as entirely truthful on matters of fact even though on the broader issues between himself and Mr Packer he obviously felt, and expressed himself, strongly and uncompromisingly.
22. We have only to resolve on the balance of probabilities this one disputed issue of fact about whether Mr Packer took that week as a holiday or whether he worked. It is clear from the evidence which we have seen, and indeed is not really disputed by Mr Digby, that Mr Packer did at any rate some work during that week. We think it reasonable to infer that in the week of his return after his convalescence from the medical procedure he had undergone, it would be likely and reasonable that his programme of appointments in his diary would be a relatively light one, but the fact that the entries do appear relatively light is not in our judgment enough to rebut the evidence which we have concluded that we should accept, that shows that he was carrying out work on behalf of the company during that week of the 9^th – 13^th February, controlling his own time and his engagements as he normally did when so working. In particular it is not disputed that the expenses he claimed for the three days during that week were accepted and paid, by Mr Digby who told us that it was he that wrote all the cheques for payments by or on behalf of the company. That acceptance of those expenses for that week appears to us inconsistent with the suggestion made to us that Mr Packer should be treated as not working during that week. We emphasise that the only issue is whether he was working or not. Whether his work was inadequate, or his behaviour unsatisfactory in other ways, are not the issues before us.
23. Consequently, doing the best we can on what is inevitably a difficult judgment of fact on details of what happened, now over two years ago, we have concluded that we are satisfied that that particular week is shown by the evidence before us to have been a working week for Mr Packer and not to have been a week of holiday as the Respondent had contended, and the Tribunal's decision as recorded appears to have found. In consequence, having set aside the Tribunal's decision which held that it was a week of holiday, we substitute our own decision that for the purposes of the order made on the application to the Tribunal by Mr Packer for the payment of amounts which had been wrongly deducted from his remuneration, we substitute our own decision that for the purposes of that application the week of the 9^th – 13^th February is to be taken as a working week for Mr Packer. The consequence is that our substituted decision in place of that of the Tribunal is that the Respondent is ordered to pay to him the sum of £1,400, in respect of unpaid amounts due to him for remuneration, instead of the £700 ordered by the Tribunal. The cross-appeal is dismissed.