United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr A Crabbe Representative
For the Respondent	Mr M J Frampton Representative

SUMMARY Unfair Dismissal

A claim by former employees that they were dismissed for complaining about alleged unlawful deductions from wages, and for threatening to commence proceedings in the ET is capable of amounting to an assertion of a statutory right under section 104(4)(c) of the ERA. Accordingly if the claim is proved, any dismissal will be automatically unfair.


 


HIS HONOUR JUDGE D SEROTA QC

1. This is an appeal from the Decision of an Employment Tribunal at Southampton, chaired by Mr Peters, on 30 April this year, when he gave case management directions. It is a matter of regret that this appeal appears to have generated rather more heat than light, and the appeal has been limited by Beatson J, as I will come to shortly, to one of the directions made by the Chairman that struck-out claims of automatic unfair dismissal under section 104 of the Employment Rights Act and the substitution of claims for unfair dismissal under section 98 of the Act.
2. It is perhaps important to note that the Notice of Appeal was dated 5 May and at that stage, a hearing had been fixed in the Employment Tribunal for 23 June. It is a crying shame that because of the way matters went, at what was a case management hearing, that date had to go, as I shall explain shortly.
3. The matter was ordered to come on for a preliminary hearing by Burton J. Beatson J, on 18 June, faced with a very lengthy Notice of Appeal, decided that there was an arguable point and stayed the hearing that had been fixed for 23 June. He would only allow one ground of appeal to go forward, and that is the one that I have already mentioned.
4. Regrettably, the parties have continued to argue with one and another as to the contents of Skeletons, and arguments to be presented. I have made it clear that the issue I had to determine is a clear and simple issue of law and I am simply not prepared to go into other issues and disputes, particularly issues and disputes which Beatson J did not consider ought to be ventilated.
5. The issue, it seems to me, is a relatively clear one: was the Chairman entitled, on the basis of the material before him, to strike out the claim that these Appellants had been dismissed unfairly automatically? The Applicant also seeks further directions, they are directions which I should refer to briefly, but they are not directions that I consider I have, in any event, jurisdiction to make.
6. The background to this matter is as follows: the Respondent, Mrs Dyer and her late husband, traded as Advanced Carpentry Contract Carpenters. It is a matter of regret, and I offer my commiserations to Mrs Dyer, that her husband passed away during the course of these proceedings. The Applicants are father and son. They began to work for the Dyers in November 1996, they were originally self-employed but they say they became employed in April 1997. They suggest this was because the Inland Revenue had "fined" Mr and Mrs Dyer for not treating them as employed; this is something which Mr and Mrs Dyer vigorously deny. I do not need to say anything further about it at this stage.
7. There is no doubt that by the autumn of 2002, the Applicants were dissatisfied with payments that they were receiving and this led to a dispute between them as to what the terms of their contract were. I note that Mr Tony Pearce had been sick since the end of September and there was a dispute as to the level of his sick pay. Also there was a dispute as to whether or not the Respondents had unilaterally varied the employment contracts, for example, by saying that travelling time would no longer be payable. This is all a matter of dispute and cannot be investigated by me today, but these are the allegations being made and the answers that are being made.
8. Mr and Mrs Pearce maintained that payments were being illegally deducted from their salary, both in relation to their travelling time and in relation to sick pay. They then maintain that they were told about the terms of a contract they say they had never seen, and they asked for this contract on 27 October. They were sent it on 30 October, it had been signed by Mrs Dyer, I believe; they refused to sign it because they said this did not in fact contain the terms of an oral agreement they had made. This led to further dispute between them, particularly as Mr Tony Pearce was off sick and was not receiving the sick pay he maintained he was entitled to and the Respondent denied he was entitled to.
9. It is manifest that the two Mr Pearces had complained that the failure to pay them the sick pay and the travelling time amounted to an illegal deduction from their wages. It is clear that this is so because this is what is said in a letter from Mr and Mrs Dyer on 18 November refuting their claims. It is also right to say that there is a distinct threat by the two Mr Pearces in letters of 19 November to go to an Employment Tribunal if they are not paid what they claim to have been monies illegally deducted. In the event, there was a further dispute which, according to the two Mr Pearces, was the last straw and amounted, together with the refusal to pay them their wages, a repudiatory beach of their contracts of employment which they accepted. That is that the van they needed to use for the purpose of their work, was taken away from them. They say it was taken away from them to prevent them from working, Mr and Mrs Dyer said "No, that is not true, the only reason that the van was taken was that it needed servicing". This is a matter, again, I cannot now decide.
10. They, therefore, presented a claim to the Employment Tribunal; the claim was based on unfair dismissal, they say they were constructively dismissed, in that Mr and Mrs Dyer had been guilty of serious breaches of their contracts of employment, something Mr and Mrs Dyer have disputed. They asked for a refund of illegal deductions, notice pay, holiday pay and redundancy monies. I need to say something about the case of Mr and Mrs Dyer, because they deny all these allegations and they say that the final straw that was relied upon by the Applicants, that is the collection of the van was simply because the van needed to be serviced and had to be collected for that purpose. They denied any liability for sick pay and they deny having sought to make any changes to the contracts of employment.
11. It has to be said that the case was, perhaps, by no means clear, when it came for a case management conference on 30 April. What happened on that occasion, so far as I am able to tell, is that the matter came before the Chairman, who very sensibly, tried, together with the parties to see what the real issues in the case were and to set those out so that they could be dealt with at the hearing. It is quite clear that he was concerned about the claim that the dismissals were automatically unfair and he asked Mr Crabbe, as indeed I asked him today, to point him in the direction of the relevant parts of the Employment Rights Act on which he relied. I shall come to section 104 shortly. Mr Crabbe was unable to do so and the Chairman may not have had relevant sections in mind, and thinking that he was in fact assisting the parties, he struck out the claims under section 104 for automatically unfair dismissal and substituted for unfair dismissal claims, under section 98. He could only strike out a claim, as it seems to me, if that claim was manifestly unarguable. I shall have to come on to that shortly.
12. It is right to draw attention to the Originating Applications, which are in substantially the same form, and both refer in terms to automatically unfair dismissal, exercising the statutory right not to have contract terms unilaterally varied, illegal deductions from pay, non-payment of pensions schemes, also breach of contract and disability discrimination. Their case appears to be that because they had made such a complaint, that was one of the reasons for their dismissal. Whether this is right or not, is clearly something which cannot be determined; both parties have arguments and the Respondents are confident they have done absolutely nothing wrong and they are also confident that they can demonstrate that they did not dismiss the Applicants at all; the Applicants are equally confident that they can demonstrate that the Respondents did everything of which they are accused.
13. When one concentrates on this particular issue, it is perhaps important to bear in mind section 104 of the Act. This provides:

"(1) An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee …

…

(b) alleged that the employer had infringed a right of his which is as relevant statutory right

…

(2) It is immaterial for the purposes of subsection (1) -

(a) whether or not the employee has the right, or

(b) whether or not the right has been infringed.

but, for that subsection to apply, the claim to the right and that it has been infringed must be made in good faith.

(3) It is sufficient for subsection (1) to apply that the employee, without specifying the right, made it reasonably clear to the employer what the right claimed to have been infringed was."

And under subsection (4):

"The following are relevant statutory rights for the purposes of this section -

(a) any right conferred by this Act for which the remedy for its infringement is by way of a complaint or reference to an employment tribunal"

14. When the matter came before the Employment Tribunal in Southampton, Mr Peters records that he asked Mr Crabbe, acting on behalf of both Applicants to identify the statutory right that was being asserted. He was unable to identify a relevant statutory right for the purpose of section 104. He told Mr Crabbe that he was proposing to strike out the complaint based on section 104 and asked if there was any reason why that complaint should not be struck out. He obtained no answer from him and was justified in not striking out these complaints. Accordingly he struck out these complaints based on section 104 and then went on to explain why he added a claim under section 98.

It is a matter of regret that the Chairman did not have in mind other provisions of the Act and that Mr Crabbe was unable to draw his attention to them. It is quite clear that there had been complaints, and indeed threats, to go to an Employment Tribunal for what was described as "illegal deduction from wages". This is something which is specifically referred to in section 13 of the Act. "An employer shall not make a deduction from wages of a worker employed by him" effectively without authorisation. To refuse to pay someone something to which they are contractually entitled, may give rise to a claim under section 13.

15. It may well be on the facts that there is absolutely nothing in this complaint at all, but the fact is it is clearly a complaint that was made, and it is also a complaint that could have been made to an Employment Tribunal under section 23 is manifest that such a complaint was made, and indeed a threat was made ("threat" may be the wrong word) to take the matter, if Mr Pearce did not receive satisfaction, to an Employment Tribunal.
16. It may also be the case, and I do not need to decide this point, that where there is a dispute as to terms of employment, a complaint can be made under sections 11 and 12 of the Employment Rights Act to bring these matters to a Tribunal, and also, possibly, a right to sue in the Employment Tribunal for breach of contract, although that may be much more problematical. But there is no doubt whatsoever, that in my opinion, reading section 104(1)(iv), that a right to take proceedings to a Tribunal in a case of an alleged unlawful deduction is a protected right so far as section 104(1)(b) is concerned..
17. If - and I underline the word "if" - if I had my word processor on, I would put it in bold and italics as well - if the reason that Messrs Pearce were dismissed, or a significant reason for their having been dismissed, if there was more than one, was because they had asserted their rights that, in my opinion, would render the dismissal automatically unfair. The real issue in this case, as it seems to me, is whether in fact that allegation can be substantiated at a hearing. It seems to me that the Chairman fell into error in failing to appreciate that the material before him showed that that was a statutory right within the meaning of section 104(4), which had been asserted by Messrs Pearce, and they maintain that that was the reason for their dismissal.
18. It seems to me, in those circumstances, that I must allow the appeal and reinstate the claims. I stress, yet again, that the claims are, at this stage, no more than claims. All that I am saying is that they are arguable and it was wrong to strike them out. They will have to be investigated at the hearing, and it is, as I have already said, a matter of the greatest regret that this hearing has had to be postponed. I can only express the hope that the Employment Tribunal in Southampton will reinstate the hearing at the earliest opportunity and that the parties will confirm that all the case management directions made by the Chairman have been complied with, so that the hearing can go ahead.