United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR LACHLAN WILSON (of Counsel) Instructed by: Messrs Atkins Wilson & Bell Solicitors 3 & 5 Jenner Road Guildford Surrey GU1 3AQ
For the Respondent	MR JAMES STUART (of Counsel) Instructed by: Messrs Rowberry Morris Solicitors 17 Castle Street Reading RG1 7SB

SUMMARY

The Employment Tribunal were entitled in considering a complaint for unlawful deduction of wages for a hotel worker who lived in hotel accommodation to consider the Working Time Regulations 1998 as analogous rather than the National Minimum Wage Regulations 1999.


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal from the Decision of an Employment Tribunal sitting at London South on 28 September 2004. The judgment and reasons were entered in the Register and sent to the parties on 28 October 2004. The Chairman was Ms J Wade and the members were
   Ms B C Leverton and Mr R H Simpson. The unanimous Decision of the Employment Tribunal is that the Respondent was liable to pay to the Claimant the following sums:
2. £14,509.80 (gross) in respect of unpaid wages from which the appropriate tax and national insurance must be deducted before payment.
3. £1,550.80 (gross) in respect of holiday accrued but not taken (£350.00 already paid has been deducted) from which the appropriate tax and national insurance must be deducted before payment.
4. £433.81 in respect of unpaid wages due. This sum was net.

The total gross payment due to the Claimant, before deductions of tax and national insurance was therefore £16,060.60.

The issues

5. The Tribunal specifically record the issues in paragraph 2 of its judgment:

"2. Mrs Wigmore set out an number of assertions in her IT1. After discussion with the parties and with their agreement the Tribunal recorded that the legal issues on which we are being asked to adjudicate were as follows:

2.1 The Claimant's claim is put in two ways:

(i) Firstly, she says that she was not paid for all of the hours she worked and therefore she is entitled to the balance. Her claim is under the Employment Rights Act 1996 part II which entitled a Claimant to bring a claim in this Tribunal for unlawful deductions from wages. In her IT1 she called this a claim for "Equal pay for equal work". It is agreed that her hourly rate of pay was £4.80 [an] hour.

(ii) Secondly, the Claimant says that her salary was £9,100 per annum which, given the hours she actually worked, meant that her hourly pay was below the national minimum wage. Therefore she entitled to be paid a shortfall. In the case, she makes her claim either under Part II of the Employment Rights Act or as a claim for breach of contract (the latter being the current approach according to the analysis of the Employment Appeal Tribunal Walton -v- Independent Living Organisation [2002] ICR 1406). The two arguments basically come to the same result except that when calculating the hourly rate of pay, the National Minimum Wage Regulations put the minimum at £4.50 an hour and allow the Respondent to take into account the value to the Complainant of applicable living accommodation. The Claimant accepts that her accommodation had a value to her and has calculated it for us. We have taken this value into account in our calculations.

2.2 The Respondent says that the Claimant worked for 36 hours each week and that she was correctly paid. We need to decide if the Claimant did in fact work for more hours than this, and if so what were her working hours.

2.3 European law is very clear when it comes to deciding exactly what constitutes working time for the purposes of calculating holiday entitlement. The European Court of Justice in the case of SIMAP [2000] IRLR 845, decided that where a worker was obliged to remain in the workplace and available for work with a view to providing their services, they would be considered as working and the time that they spent on call would be regarded as "working time". It was only if they were entitled to leave the premises and still be more loosely on call, for example by being called back to work in the middle of their leisure activities that they would not be considered as being at work whilst on call. This was because they were free to manage their time with fewer constraints and pursue their own interests during this time. The European Court of Justice has also decided that even if a worker can sleep at the workplace whilst he is on call, all those hours count as working hours and not hours of rest if she could be called and woken up at any time.

2.4 The Respondent agrees that the Claimant is entitled to be paid for three weeks holiday accrued but not taken during the course of the Claimant's employment. What is the correct figure payable in respect of holiday pay? It is agreed that the Claimant has already been paid a gross sum of £350 in respect of her holiday.

2.5 The Complainant says that she has not received all of the sums which appear on her payslips as having been paid to her. The Respondent agrees that the Claimant did not receive a cheque made payable to her dated 10 May 2004 for £433.81. The Respondent has agreed to pay this sum to the Claimant and the Claimant has agreed that once she receives this she is not owed any balance of wages according to her payslips."

The material facts

6. The Employment Tribunal set out the material facts in paragraph 4, as follows:

"4. Having heard evidence from the parties and read the small number of relevant documents available we find the following facts on the balance of probabilities:

4.1 The Claimant was first employed by the Respondent on 22 September 2003. She answered an advert in the local paper which said "Hotel Person, live in. Person or couple required for small local hotel. Accommodation provided, Duties to include preparation of breakfast and customer welcome".

4.2 The Claimant was expected to perform a set of duties which included providing breakfast for guests six days a week and then being available to take bookings and greet guests when they arrived. She was also expected to help at the weekend with making up beds.

4.3 We find as a fact that when the Claimant was not specifically carrying out tasks at the hotel she was "on call". The exception to this is that the Claimant had an entitlement to take 24 hours off on a Monday and also she was free during the hours of 9.00 am and 12.00 pm when the chambermaids were in the building and could cover for her. This means that out of potential 168 hours in a week, she was working 132 of them. She did not work for only 36 hours a week as the Respondent claims.

4.4 Had she worked 36 hours a week the Claimant would have been paid at the rate of £4.80 an hour, a total of £9,100 per annum. As it is her hourly pay was £1.33 an hour. In addition she was entitled to free accommodation. She had her own room in the hotel.

4.5 The Claimant was not provided with a job description apart from the newspaper advert and her working hours were not set out in writing for her. She was not provided with a statement of terms and conditions of employment and in this respect the Respondent was in breach of its legal obligations under the Employment Rights Act 1996 .

4.6 After working for the Respondent for 7½ months, the Claimant's employment terminated when she brought her cats to live with her in the hotel and Mr Vasquez-Guirado did not allow this. The Claimant's employment terminated on 7 May 2004. She was employed for less than a year and did not pursue an unfair dismissal claim.

4.7 On 2 June 2004 the Claimant wrote to the Respondent to say that she had worked more than the weekly hours defined by the Working Time Directive and that she had been paid less [than] she was entitled to. She proposed that the Respondents pay her for the balance of the time due to her and, as a concession, offered to reduced the amount that she was claiming to the difference between 98 hours a week and the figure actually paid to her by the Respondent. She received no reply and wrote again on 18 June. When she received no response she startled Tribunal proceedings on 2 August 2004."

The Employment Tribunal's conclusions

7. In paragraph 5 of its Decision, the Employment Tribunal reached the following conclusion:

"5. We have concluded that the Claimant worked a total of 132 hours a week. The Respondent was therefore liable to pay the Complainant for those hours. Failure to do so was a breach of [the] Employment Rights Act 1996 Part II. As we have said above, this working time was not all time actually spent serving breakfast or dealing with guests but it was "on call" time which was "working time" within the meaning of the law. When she was on call she was expected to be in the hotel and was not free to come and go as she chose and pursue her own interests. She was liable to be interrupted at any time of day or night and was expected to be the first point of contact. She may have been "at home" in that she lived in the hotel and was therefore at times free to entertain herself in her room but she [could] not go out and was never off duty except for two hours a day and on Mondays. The very purpose of her living in was that she was on call 24 hours a day. The provision of accommodation by the Respondent was not a "perk" of the job but an essential part of it which suited the purposes of the Respondent. As the Complainant had been homeless at the time she took up the job, it suited her to have accommodation but this does not alter the fact that most of the time she spent in the room was "on call" time. This would have been the same for anyone who took the job.

6. The reasons that we have come to in this conclusion are as follows:

6.1 The Claimant's account of events has been consistent since early June 2004. By contrast, the Respondent's written evidence and the oral evidence given by Mr Vasquez-Guirado was contradictory. Therefore we consider Mrs Wigmore to be the more credible witness generally.

6.2 Specifically, Mr Vasquez-Guirado admitted in his evidence to the Tribunal that he did expect the Claimant to be on call most of the time. Indeed, the advert placed in the local paper made it clear that it was a requirement of the job that the person working there lived in. This was because he needed someone to look after the hotel at night. He candidly admitted to us that he would not himself sleep well unless he knew that there was a member of staff available during the night in case there was a problem. Most of the time this person would be able to sleep but occasionally there might be an emergency, such as a fire (thankfully this did not happen during the time the Claimant was employed), a guest might be taken ill or a guest might arrive late at night.

6.3 Further, in his evidence Mr Vasquez-Guirado admitted that the Claimant was expected to be available throughout the day and evening. Although he himself was in the hotel quite a lot of the time he had other work to do and expected the Claimant to answer the telephone even when he was there. Furthermore, he told us that he sometimes stayed until 9.00 pm at night in the hotel but sometimes he had to go out. He expected the Claimant to be there. In the evenings, after he had gone home (as he was never there from 9.00 pm onwards) he would not expect the Claimant to go out unless she made an arrangement with him to go out in which case he would cover for her. He took holidays whereas she took none.

6.4 It is undoubtedly the case that Mrs Wigmore was happy to cover the hotel for the many hours which she covered it for most of the time that she was there. This was because she did not have many other places to go giving recently come from Zimbabwe and also because she was concerned to keep her job and to please Mr Vasquez-Guirado as she needed somewhere to live and needed an income. However, that she was willing to do it does not detract from the fact that she was working 132 hours a week and through his own admission Mr Vasquez-Guirado agreed that the Claimant was on call most of the time.

6.5 We are not satisfied that even when Mr Vasquez-Guirado was present in the building that he then expected the Claimant to be free to come and go as she chose. This is because he told us that when the telephone rang he would only answer it if the Claimant did not answer it as he expected her to be the one to answer it first.

6.6 The Claimant was not provided with any written confirmation of her working conditions or hours whatsoever and therefore the Respondent had no corroborative evidence to show that it had planned her working hours, that it was expecting her to work a small number of working hours and that it was expecting her to work only 48 hours or less as set out in the Working Time Regulations. The regulations are well known. Also it is common sense, as well as the law, to provide a statement of terms and conditions of employment including working hours, and that one was not provided was a factor leading us to conclude that the Respondent was not committed to limiting his employees' working hours to a set number.

6.7 Neither Mr Vasquez-Guirado nor his daughter (who kept the books) were aware that the cheque for £433.81 which they had said they had given to the Complainant on 10 May had not been cashed. This showed a surprising lack of knowledge and/or attention to the detail of matters which are crucial to good employment practice.

6.8 We know that chambermaids came to the hotel regularly on weekdays from 9.00 am until 12.00 pm and therefore we find that the Claimant was not working during that period. Also, we accept Mr Vasquez-Guirado's evidence that the Claimant was free for 24 hours on a Monday. If she chose to be in the hotel during that time, even if she chose to work, we cannot count these hours are part of her normal working hours. We are conscious that the Claimant had no other home and therefore it is not entirely straightforward whether the Claimant was "at home" when she was in her room or whether she was "on call". Had it not been for the evidence of Mr Vasquez-Guirado who admitted that he wanted someone to be in the hotel on duty 24 hours a day, we might have been led to conclude that some of the time that the Claimant spent in her room, especially at night, was her own time and not "on-call time". However this cannot have been the case for Mr Vasquez-Guirado did require somebody there at all times."

The Amended Notice of Appeal

8. The Amended Notice of Appeal is supplemented by the skeleton argument and oral submissions of Mr Lachlan Wilson. The Respondent was represented by Mr James Stuart who provided a skeleton argument and made oral submissions. We shall deal with each of the grounds of appeal in turn.

Ground 1

9. The first ground of appeal is that the Tribunal failed to identify the basis upon which it decided the case. Mr Wilson submits that it is not capable of being discerned from the judgment whether the case for the Claimant was determined on principles of breach of contract or National Minimum Wage Act 1998 provisions or any other basis. Further, he submits that there are elements of the judgment which are inconsistent with both the finding under breach of contract and a finding under the National Minimum Wage Regulations 1999. The Tribunal's reasoning is simply not clear and is not capable of being remedied by any analytical process. In oral argument Mr Wilson submitted that the Employment Tribunal made an error of law in applying the definition of "working time" under the Working Time Regulations 1998
   (SI 1998/1833) rather than the National Minimum Wage Regulations 1999 (SI 1999/584).
10. Mr Stuart submits that this is a mistaken ground of appeal because the Employment Tribunal has identified the basis upon which it decided the case. He points to paragraph 2.1 of the judgment, set out above, where the Employment Tribunal explains that the Claimant's claim is put in two ways:

(i) unlawful deductions from wages for the hours worked at the contractually agreed rate of £4.80 per hour for the number of hours worked rather than the 36 hours per week which the Appellants contended for; or

(ii) unlawful deductions from wages at the National Minimum Wage Regulations minimum rate of £4.50 per hour for the number of hours worked, rather than the 36 hours per week which the Appellants contended for.

11. We agree with Mr Stuart. Paragraph 2.1 of the Judgment makes it quite clear that the Employment Tribunal recorded the agreement of the parties about the way the Claimant's claim was put, as set out above. The Tribunal also recorded, with the parties' agreement, what the Respondents' case was: that she worked for only 36 hours each week and that she was correctly paid. The Tribunal further recorded that "We need to decide if the Claimant did in fact work for more hours than this, and if so what were her working hours.": Judgment paragraph 2.2. The Tribunal goes on to record the way in which it will deal with that issue in paragraph 2.3; with the issue of unpaid holiday pay: Judgment paragraph 2.4; and non-receipt of some arrears of pay: Judgment paragraph 2.5. All of paragraphs 2.1 through to 2.5 are specifically prefaced by the Tribunal, at the beginning of paragraph 2, noting that these issues were discussed with the parties "and with their agreement the Tribunal recorded that the legal issues on which we are being asked to adjudicate were as follows…".
12. Having made findings of fact, the Tribunal reached a clear conclusion in paragraph 5 of its Decision:

"We have concluded that the Claimant worked a total of 132 hours a week. The Respondent was therefore liable to pay the Complainant for those hours. Failure to do so was a breach of [the] Employment Rights Act 1996 Part II."

The Tribunal then go on to give reasons for that conclusion.

13. Insofar as remedy is concerned, the Tribunal say in paragraph 7:

"The Claimant's normal working week was 132 hours. She was employed for 33 weeks and should have been paid £633.60 each week at £4.80 an hour. £4.80 is the agreed hourly rate so we have used this rather than the minimum wage rate of £4.50.

14. We agree with Mr Stuart that nothing could be clearer. There is no confusion in the reasoning of the Employment Tribunal. It identified the issues, with the agreement of the parties, and clearly explained how it resolved them. There is no error of law here.

Ground 2

15. The second ground of appeal is that in finding that the Claimant was liable to be remunerated for the night hours the Employment Tribunal failed to take into account certain relevant facts which are set out in the Notice of Appeal. They are: (i) that the accommodation provided for the Claimant was her only residence therefore the room was her "home" and separate from the work place; (ii) the fact that the Claimant was never required to answer the telephone or deal with hotel customers during the night; (iii) the fact that hotel guests were able to access and leave the premises of their own accord once checked-in, and most of them were business guests; and (iv) that the Claimant could do as she pleased in her room during the night hours.
16. Mr Stuart submits these are all matters of evidence which were before the Employment Tribunal and they relate to the weight of the evidence taken as a whole. In this case the Tribunal heard from both Appellants and the Respondent and set out its findings of fact in paragraph 4 of the Judgment, which has to be read with paragraph 6.
17. We agree. In particular we note the following findings of fact:

(i) Accommodation

a. The advert said "Hotel person, live in": Judgment paragraph 4.1 and it was a requirement of the job that person lived in the hotel: Judgment paragraph 6.2;

b. The Claimant was entitled to "free accommodation". She had her own room in the hotel: Judgment paragraph 4.4;

c. She was dismissed for bringing cats to live with her in the hotel: Judgment paragraph 4.6, which shows that the room was not "her home" or away from the workplace – it was part of the hotel over which the Appellants had control;

d. When she was on call she was expected to be in the hotel and was not free to come and go as she chose and pursue her own interests: Judgment paragraph 5;

e. She was liable to be interrupted at any time of day or night: Judgment paragraphs
5 and 6.3;

f. She lived in the hotel – Judgment paragraph 5;

g. She could not go out and was never off duty except for three hours a day Tuesday to Friday and all day Mondays: Judgment paragraphs 5 and 6.3. The Appellants would have to "arrange cover" for the Claimant if she did ask to leave the hotel outside her Monday and three hours per weekday times;

h. The very purpose of her living in was that she was on call 24 hours a day: Judgment paragraph 5. The Appellants needed someone to look after the hotel at night and be available at the hotel to deal with emergencies there: Judgment paragraphs 6.2 and 6.8;

i The provision of the accommodation was an essential part of the job: Judgment paragraph 5.

(ii) Actual tasks performed

a. The Appellants' own evidence was that they "needed someone to look after the hotel at night" and that the member of staff had to be "available during the night in case there was a problem…there might be an emergency, such as a fire, a guest might be taken ill or a guest might arrive late at night": Judgment paragraph 6.2;

b. When she was on call she was expected to be in the hotel and was not free to come and go as she chose and pursue her own interests: Judgment paragraph 5;

c. She was "expected to be there in the evenings after the First Appellant had gone home (usually 9pm)" and she was liable to be interrupted at any time of day or night: Judgment paragraphs 5 and 6.3;

d She could not go out and was never off duty except for three hours a day Tuesday to Friday and on Mondays: Judgment paragraphs 5 and 6.3. The Appellants would have to "arrange cover" for the Claimant if she did ask to leave the hotel outside her Monday and three hours per weekday times;

e. The very purpose of her living in was that she was on call 24 hours a day: Judgment paragraph 5. The Appellants needed someone to look after the hotel at night and to be available at the hotel to deal with emergencies there: Judgment paragraphs 6.2 and 6.8.

(iii) Guest requirements

a. The Appellants' evidence was that they "needed someone to look after the hotel at night" and that the member of staff had to be "available during the night in case there was a problem… there might be an emergency, such as a fire, a guest might be taken ill or a guest might arrive late at night": Judgment paragraph 6.2.

(iv) The Claimant did as she pleased in her room

The Claimant could not do as she pleased. She could not have her cats. She could not leave. She was always on call and could be interrupted at any moment.

Ground 3

18. Ground 3 argues that the Tribunal reached a conclusion which no reasonable tribunal, properly directing itself on the facts and the law, could have reached. In particular the Tribunal erroneously relied on the case of SIMAP [2000] IRLR 845, which was a case decided under the Working Time Directive (93/104/EC). See now Directive 2003/88/EC which consolidates the 1993 Directive and a subsequent amending directive as from 2 August 2004. Alternatively Mr Wilson submits that the Employment Tribunal failed to determine the case in accordance with the provisions of the National Minimum Wage Regulations 1999. Mr Stuart submits that the Tribunal correctly identified the correct issue in paragraph 2.2 of its Judgment, namely whether the Claimant did in fact work for more hours than 36 hours per week and if so, what were her working hours. The Tribunal correctly identified SIMAP [2000] IRLR 845 as relevant for deciding working time for the purposes of calculating holiday entitlement. As the Employment Tribunal decided the case on the basis of a contractual entitlement to £4.80 per hour, rather than the national minimum wage rate of £4.50 per hour, the Appellants are wrong in submitting that only the National Minimum Wage Regulation approach is relevant.
19. We agree with Mr Stuart. The Employment Tribunal identified the two ways in which the Claimant put her claim: Judgment paragraph 2.1. Nothing in law prevents them approaching the case on either basis and the Employment Tribunal plainly chose to adopt the contractual rather than the National Minimum Wage Regulation approach. In the circumstances it was a permissible option for the Employment Tribunal to have regard to cases under the Working Time Regulations when considering the broad issue of what was "working time" in the present case: SIMAP [2000] IRLR 845 and Landeshaupstadt Kiel v Jaeger [2003] IRLR 804. The case was clearly decided on the basis of the contractual entitlement of £4.80 per hour: Judgment paragraphs 5 and 7.

Ground 4

20. The fourth ground of appeal is perversity. Although the matter is more fully pleaded than that, Mr Wilson accepts that this is a straight perversity ground of appeal. It is sufficient to remind ourselves of the test for perversity set out in Piggott Brothers & Co Ltd v Jackson [1991] IRLR 309 and Yeboah v Crofton [2002] IRLR 634 at paragraph 93. The test of perversity is a very high one indeed and this ground of appeal comes nowhere near it. For these reasons the appeal is dismissed.

Cross-appeal

21. The cross-appeal by the Respondent is on the basis that the Employment Tribunal made a minor but obvious error in its calculation of the award at paragraph 7 of the Extended Reasons. Paragraph 7 says this:

"The Claimant's normal working week was 132 hours. She was employed for 33 weeks and should have been paid £633.60 each week at £4.80 an hour. £4.80 is the agreed hourly rate so we have used this rather than the minimum wage rate of £4.50. The Complainant was therefore entitled to a total of £20,908.80 gross for the weeks she worked. The Claimant has agreed that she received from the Respondent £6,399 (including the value of her accommodation worked using as a guideline the Minimum Wage Regulations). The balance due is therefore £14,509.80."

22. The cross-appeal is based on the fact that the Claimant received £5,580 gross income from the Appellants, not £6,399. The £819 difference was a concession that the Claimant was prepared to make if the Employment Tribunal found that living-in was not a contractual requirement. In fact the Employment Tribunal found that the living-in was a contractual requirement and that the provision of the accommodation was not a "perk" but an essential part of the job: Judgment paragraph 5. On that basis there was no requirement for the Respondent to give credit to the Appellants for payment for the accommodation. The full unlawful deduction from wages was due. Furthermore, there were no written terms of the contract nor any oral agreement as to any deduction to be made by the Appellants from wages for the use of the room. Mr Stuart therefore submits that in deducting the £819 from the amount due, the Employment Tribunal made an error.
23. The Appellant's reply to the cross-appeal has been drafted by the First Appellant and not amended. It essentially denies the number of contractual hours the Respondent was required to work (which is the substance of the appeal) and second, relies on an implied term that the Respondent should give credit to the Appellants for the accommodation provided. In his oral submissions Mr Wilson did not seek to rely on an implied term, but rather submitted that paragraph 7 showed the confusion in the Tribunal's mind, which supported his submissions on the first ground of appeal.
24. We agree with Mr Stuart. Having decided the Claimant's claim on the contractual basis that she was entitled to be paid for 132 hours per week at the contractual rate of £4.80 per hour: Judgment paragraph 2.1(i), it was not open to the Tribunal to make a deduction for accommodation under the National Minimum Wage Regulations. It was a concession she had made under her second head of claim: Judgment paragraph 2.1(ii). The Employment Tribunal made an error of law and we allow the cross-appeal to the extent that the Appellants are ordered to pay a further sum of £819 to the Respondent.

Additional Submissions

25. During the hearing Judge Birtles drew the attention of Counsel to an earlier decision which he had given in South Holland District Council v Ms J Stamp and others (EAT/1097/02/RN. Judgment delivered on 3 June 2003) and invited written submissions. Both Mr Wilson and Mr Stuart have provided written submissions. These do not affect our decision. In the Stamp case the reasoning is simply not there to support the decision of the employment tribunal. In the present case it is.

Conclusion

26. For these reasons the appeal is dismissed and the cross-appeal is allowed. The total gross payment, therefore, due to the Claimant, before deductions of tax and national insurance, is therefore £16,879.60.