Miss C Jolliff v Mrs R Cross T/a Make Do and Mend: 1400017/2019
JUDGMENT
Employment Tribunals Rules of Procedure 2013 – Rule 21[1]The Respondent has made an unauthorised deduction from the Claimant's wages and is ordered to pay her the gross sum of £1,417.64.[2]The Respondent has failed to pay the Claimant’s holiday entitlement and is ordered to pay her the sum of £810.00.[3]The hearing listed on 26 July 2019 is cancelled.REASONS
The Claims
[1]The Respondent has applied for a reconsideration of the Judgment dated 16 April 2019 which was sent to the parties on 17 April 2019. The grounds are set out in her application of 24 April 2019.[2]Schedule 1 of The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 contains the Employment Tribunal Rules of Procedure 2013 (“the Rules”). Under rule 71, an application for reconsideration under rule 70 must be made within 14 days of the date on which the decision (or, if later, the written reasons) were sent to the parties. The application was therefore received inside the relevant time limit.[3]The grounds for reconsideration are only those set out within rule 70, namely that it is necessary in the interests of justice to do so.[4]The basis of the Respondent’s application is simple; that the Judgment was entered in error, she having filed a response to the claim on time. A copy of the Certificate of Posting has been supplied which shows that a document was posted to the Bristol Civil Justice Centre on 1 February 2019. That document never found its way to the case file. It appears that something was received in the building and was signed for but has since been mislaid. There Case No. 1400017/2019 is no reason to believe that the document was not the Response which Mrs Cross says was sent (her email of 17 April).[5]Administrative errors occasionally do occur and, when they do, they invariably cause inconvenience to the parties. That is regretful but an administrative error is clearly not a reason to allow a judgment to stand in circumstances where it was entered in the belief that a response had not been served.[6]Accordingly, the application for reconsideration pursuant to rule 72 (1) is allowed and the Judgment is revoked.[1]By a claim form presented on 1 January 2019 the claimant, who was born on 5th of June 1990, brought claims of unlawful deductions of wages and a claim for pay in lieu of accrued but untaken annual leave. The respondent defended the claims.[2]The dates on the ACAS certificate were as follows: date A4 December 2018, date B 12 December 2018. The parties[3]The claimant was employed by the respondent as a seamstress from 1 September 2017 until the termination of the contract on 1 October 2018. Her claims arose from that period of employment.[4]The Respondent carried on business as providing seamstress and alterations and repairs services, operating from premises in Worle.The hearing
[5]I was presented with a statement and supporting documents by both parties which I read with care. In the event, given the agreed facts as set out below, it was not necessary for me to hear evidence and the parties agreed that I should deliberate and give judgment on the basis of the agreed facts. The issues:[6]The issues were as follows: 6.1. What was the claimant’s entitlement to annual leave? 6.2. How much leave had accrued on a pro-rata basis at the termination of her employment? 6.3. How much leave had the claimant taken at the point of termination? 6.4. Was any sum owed for accrued but untaken annual leave? 6.5. What was the claimant’s contractual entitlement to wages? 6.6. What period were wages claimed in respect of? 6.7. What sums had the respondent paid to the claimant in respect of those wages? 6.8. Is there a term of the contract which permits the respondent to make deductions and, if so, to what extent? The facts:[7]The claimant was employed by the Respondent from 1 September 2017 until 25 September 2018 as a seamstress. The claimant worked four days a week, working 10 hours at £8 an hour.[8]In March 2018 the claimant and the respondent agreed that the claimant would buy a share of the respondent’s business, as the respondent was looking to reduce her commitment to it. An agreement of sorts was drawn up in writing on 26 March 2018 by which the claimant was to buy a 30% share of the business for a sale price of £4160. The sale price was to be paid by the claimant sacrificing her wages from her employment and was to be paid over the course of a year, concluding on 1 March 2019.[9]The claimant’s salary was increased to £9 an hour to reflect the fact that she would be undertaking a managerial role in the increasing absence of the respondent. She was to be paid £8 an hour for running a sewing club on two nights a week.[10]In June and July 2018, the respondent received a large number of orders for alterations to bridal gowns and bridesmaids’ dresses as a result of an agreement with a local bridal wear shop, So Gorgeous.[11]There is a dispute between the parties as to who was responsible for the alterations that resulted, each saying it was the other, and each claiming that any issues with the timeliness of completing the orders and the standard of the workmanship, which both parties appear to accept was below an acceptable level was due to the other’s negligence and not their own. Fortunately, given the issues in this case, I do not need to try to resolve where the truth of those allegations lies or to make findings about it.[12]The relevance of the issues above, however, is that the respondent seeks to set off the value of the damage caused to her business against any wages that were found to be owed to the claimant. She has (through her solicitors sent) the claimant a letter before action in relation to a claim for damages in the county court relating to those losses.[13]The tribunal only has jurisdiction to hear claims for breach of contract claim brought by an employer under the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994. Article 5 provides that such a claim can only be brought where an employee brings a breach of contract claim, and the claim must be brought within 6 weeks of such a claim being presented to the Tribunal.[14]In the present case, the claimant has not brought a breach of contract claim and the respondent cannot offset any losses caused by a breach of contract against any wages fund to be owed to the claimant[15]I return to the facts: in or about August 2018, possibly because relations between Ms Jolliff and Mrs Cross were deteriorating due to errors in the work (the respondent’s case), or because Mrs Cross was intending to cease her contribution to the business and sell it in its entirety to the claimant (the claimant’s case), Mrs Cross closed the shop and instructed the claimant to take annual leave.[16]If it were necessary to make findings as to what happened, the WhatsApp messages produced by the claimant showing her communications with Mrs Cross are compelling evidence that if Mrs Cross had any complaint about the claimant’s work she did not chose to raise it at the time, and the messages tend to demonstrate that Mrs Cross was grateful for the work that the claimant had done to help keep the business afloat and did not in any way suggest that the claimant was negligent or that the standard of her work gave any cause of concern.[17]Mrs Cross took the decision that she would not sell the business to the claimant, but would continue to employ her as before. She therefore instructed her accountant to work out what wages were owed in terms of the work that had been done by the claimant to that point but for which she had not been paid, in accordance with the agreement to the purchase of the 30% share of the business. She told the claimant on 9 August 2018 that she should take leave, albeit there is a dispute between the parties as to whether that was because of the claimant’s hard work (the claimant’s case) or was because of issues with her work (the respondent’s case).[18]The accountant undertook the necessary calculations and on 5 September 2018 produced a wage slip showing that the claimant was owed £1764.84. The parties agree that that sum is the extent of the claimant’s claim for wages in these proceedings. The respondent accepts that it is properly and accurately calculated.[19]The claimant’s period of annual leave lasted form 10 August to 31st of August 2018.[20]On 31 August 2018 Mrs Cross emailed the claimant explaining that due to cash flow problems within the business she could not afford to pay the claimant the £1764.84 that was due to her as wages as had been calculated by the accountant, but would pay the arrears in addition to the ongoing monthly salary in four monthly instalments of £441.21. The claimant replied asking when she would be working again and whether it would be in the role of a manager or otherwise. The parties agreed that the claimant took annual leave whilst the situation was resolved.[21]On the 10th of September 2018 the claimant began to work again, this time solely in the capacity as a seamstress rather than a manager. On 11 September the respondent emailed the claimant providing her P45 stating “you need to declare yourself a self-employed far the HMRC website an invoice me for the work you do.”[22]The P45 identified the claimant’s leaving date is 31 August 2018. In the event, it appears that the parties agree that claimant worked until 25 September 2019. It is unclear how often she worked between the first and 25 September or for how many hours.[23]On 25 September the relationship between the claimant and the respondent deteriorated to the point that the work relationship was brought to an end[24]The parties agree that the respondent made one payment of £444.21 towards the outstanding sum due as wages to the claimant.[25]The parties agree that the claimant took 10 days of annual leave between 10 August 2018 and 10 September 2018 and in addition took the eight days bank holidays during the leave year 1 September 2017 to 1 September 2018. She therefore had 18 days annual leave in her first leave year.[26]The Law[27]Section 13 of the Employment Rights Act 1996 (‘the Act’) provides as follows: Right not to suffer unauthorised deductions.(1) An employer shall not make a deduction from wages of a worker employed by him unless— (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction.(2) In this section “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised— (a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or (b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.[28]In so far as the claim for accrued but unpaid annual leave is concerned the Working Time Regulations 1998 (‘the Regulations’) provides follows: 13.— Entitlement to annual leave(1) Subject to paragraphs (5) and (7), a worker is entitled in each leave year to a period of leave determined in accordance with paragraph (2).(2) The period of leave to which a worker is entitled under paragraph (1) is— (a) …. (b) …. (c) in any leave year beginning after 23rd November 1999, four weeks.(3) A worker’s leave year, for the purposes of this regulation, begins— (a) on such date during the calendar year as may be provided for in a relevant agreement; or (b) where there are no provisions of a relevant agreement which apply— (i) …. (ii) if the worker’s employment begins after 1st October 1998, on the date on which that employment begins and each subsequent anniversary of that date.(4) ….(5) Where the date on which a worker’s employment begins is later than the date on which (by virtue of a relevant agreement) his first leave year begins, the leave to which he is entitled in that leave year is a proportion of the period applicable under paragraph (2) equal to the proportion of that leave year remaining on the date on which his employment begins.(6) Where by virtue of paragraph (2)(b) or (5) the period of leave to which a worker is entitled is or includes a proportion of a week, the proportion shall be determined in days and any fraction of a day shall be treated as a whole day.(7) The entitlement conferred by paragraph (1) does not arise until a worker has been continuously employed for thirteen weeks.(8) For the purposes of paragraph (7), a worker has been continuously employed for thirteen weeks if his relations with his employer have been governed by a contract during the whole or part of each of those weeks.(9) Leave to which a worker is entitled under this regulation may be taken in instalments, but— (a) it may only be taken in the leave year in respect of which it is due, and (b) it may not be replaced by a payment in lieu except where the worker’s employment is terminated.[29]Regulation 13A of the Regulations provides an additional entitlement to annual leave of 1.6 weeks, providing that the aggregate entitlement does not exceed eight maximum of 28 days (see regulation 13A(2)(d) and (3)).[30]Regulation 15 of the Regulations provides that a worker’s employer may require the worker to take leave to which the work was entitled under regulation 13 of regulation 13A on particular days, by giving notice to the worker in accordance with paragraph 3. Paragraph 3 provides: (3) a notice under paragraph (1) or (2)a. may relate to all or part of the leave to which a worker is entitled the leave year;b. shall specify the days in which the leave is or (as the case may be) is not to be taken and, where leave on a particular day is to be in respect of any part of the day, its duration; and should be given to the….Worker before the relevant date.[31]Decision Unlawful deduction of wages[32]The parties agree that in respect of the claimant’s period of employment the claimant is due £1,764.84 less than the single payment of £441.21, being a total of £1323.63. There was no written contract and therefore there was no relevant provision of the claimant’s contract which permitted the respondent to make the deduction in question for the purposes of section 13 of the act. The respondent was unable to offset the losses as an employer’s counterclaim for the reasons set out above. In consequence I find that the full sum of £1323.63 is owed to the claimant by the respondent by way of unpaid wages. Accrued but untaken annual leave[33]As the claimant did not have a written contract identifying the leave year, as a consequence of regulation 13 (3)(b)(ii), her leave year began on 1 September. In the period 1 September 2017 to 1 September 2018 the claimant’s entitlement to annual leave, given that she worked four days a week maybe calculators as follows (28 x 4/5) = 22.4 days[34]By her admission the claimant had taken eight days bank holiday and, as a consequence of the respondent’s instruction (see Regulation 15(2) of the Regulations) she took 12 days of annual leave in the leave year ending 31st of August 2017, and five days of annual leave and the leave year beginning the first of September 2018.[35]The claimant had therefore use 20 days of the 22.4 days allowance for the leave year 2017, and in the leave year 2018 her entitlement to annual leave on a pro rata basis was 22.4/12 = 2 days. The claimant had therefore exhausted her annual leave for the leave year 2018 and any accrued but untaken annual leave in respect of the leave year 2017.[36]In consequence the claimant did not have any accrued but untaken annual leave the purposes of regulation 14 of the Regulations. Her claim for accrued but untaken annual leave is not therefore well founded and fails. Failure to provide statement of employment particulars[37]Section 38 of the Employment Act 2002 provides (subsection 3) in the case proceedings to which the section applies (which includes any claim for unlawful deduction of wages or for accrued but unpaid annual leave) the employment tribunal “makes an award to the employee in respect of the claim and when the proceedings were begun the employer was in breach of his duty to the employee to provide him with a statement of employment particulars, the tribunal must, subject to subsection (5), increase the award by the minimum amount and may, if it considers it just and equitable in all the circumstances increase the award by the higher amount instead.”[38]The minimum amount is to an amount equal to 2 weeks’ pay and the higher amount is an amount equal to 4 weeks’ pay.[39]Subsection 5 provides that the duty under s.38(3) does not apply if there are exceptional circumstances which would make an award or increase under that subsection and just or inequitable.[40]In the present case the respondent did not provide the claimant with a statement of employment particulars. However, in my view there are exceptional circumstances which I consider would not make it just and equitable to increase the award by either two weeks or four weeks’ pay.[41]The circumstances in question are that the claimant was, by agreement with the respondent from 1 March 2018, working to buy a share of the respondent’s business and it was the joint intention of the parties that there would be a partnership between the claimant and the respondent in the short term, and in the long term that the claimant might well by the respondent out of the business. Thus, whilst there was an opportunity for the respondent to provide a statement of employment particulars to the claimant in the initial six months of her employment, for the remaining six months both of the parties was operating on the basis that the employment was a temporary status that would soon change. In addition, I bear in mind the claimant did not seek any statement of employment particulars during the course of her employment for the reasons I have given above.[42]I therefore declined to make any increase in the award by either two or four weeks’ pay.