Mrs J Miles v Mr G Hesp and Mrs L Hesp T/a The Great Western Hotel: 1601554/2018

EMPLOYMENT TRIBUNALS

Case No 1601554/2018

Between

Mrs J MilesClaimant

Mr G Hesp and Mrs L Hesp T/a The Great Western HotelRespondent

Before

Employment Judge Howden-Evans

In person for claimant

Ms Nevins (instructed by Solicitor) for respondent

Date 6 March 2021

JUDGMENT

The

REASONS

[1]On 24th October 2018, the claimant submitted an ET1 claim form, that amongst other claims, asserted she had been constructively unfairly dismissed from her employment as a housekeeper at the respondents’ hostel, The Great Western Hotel (‘the hotel”). This claim was submitted after an ACAS conciliation period (13th August 2018 to 25th September 2018).

[2]In their ET3 response of 10th December 2018, the respondents asserted the claimant was self-employed and worked for them “on a casual basis” from January 2015; they assert she only became an employee on 1st May 2017. An employee needs to have 2 years’ continuous service with their employer before they have the right to not be unfairly dismissed. As the claimant’s employment ceased on 20th May 2018, if the respondents’ description of the claimant’s employment status prior to 1st May 2017 had been correct, the claimant would not have had sufficient employment service to bring an unfair dismissal claim.

[3]At a preliminary hearing on 23rd May 2019, Employment Judge Povey listed this half-day hearing to determine the issue of the claimant’s employment status during the period 5th January 2015 and 20th May 2018.

[4]At the preliminary hearing the claimant represented herself and the respondents were represented by Ms Nevins.

[5]I heard evidence on oath from the claimant. On behalf of the respondents, I heard evidence on oath from Mr Hesp, joint owner of the hotel, and Mr Lloyd, who had previously been a member of bar staff and was now a manager at the hotel.

[6]In addition, the claimant produced written statements from Ms Jones, Ms Hardisty and Ms Saraireh who did not attend as witnesses. The respondents did not object to me reading these statements, however as these people were not available to have their evidence tested by cross examination, I have not given their statements any weight in making my decision.

[7]In addition to hearing witnesses’ evidence, I had the benefit of a bundle of documents of 48 pages and 2 legal authorities handed in; the decisions of the Central Arbitration Committee and subsequently of Mr Justice Supperstone, sitting in the High Court, in the case of Independent Workers’ Union of Great Britain v RooFoods Limited t/a Deliveroo. At the end of the hearing, both parties gave oral closing submissions. Unfortunately, there was insufficient time for me to consider my decision. I sincerely apologise for the delay in providing this reserved judgment and for any inconvenience this has caused the parties; I experienced a personal bereavement in August, which caused me to fall behind with my work.

Findings of Fact

[8]In 2005, Mr Hesp purchased The Great Western Hotel and started employment as the Managing Director of the hotel. However, during the period in question, Mr Hesp also worked as a full-time salesperson for a bathroom company, a role which required him to cover the Devon and Somerset region.

[9]The hotel (which is based near Abergavenny) comprises of a Bar / Public House and a Bed and Breakfast / Hostel. The hotel can sleep up to 30 people – it has one dormitory that can accommodate 10, 2 dormitories that can accommodate 6, a fourth dormitory that accommodates 4 guests and 2 en-suite rooms. The hotel had an average occupancy rate of 6 to 8 guests per night. The hotel often has contractors staying for a number of nights. In 2015, the hotel’s turnover was approximately £150,000 of which £40,000 was taken from accommodation, with the remainder being taken by wet sales. The hotel charged £16 per guest per night.

[10]On a number of occasions in 2014, the claimant stayed at the hotel as a guest. As a regular guest she became friendly with the former housekeeper “Sandra” and noted Sandra appeared to be “snowed under” with work. The claimant would sometimes help Sandra to complete her duties. That housekeeper ceased working at the hotel in September 2014, at which point a couple called “Sean” and “Rennie” took over the cleaning for the hotel. They ceased working at the hotel at the end of 2014, at which point the claimant started undertaking the hotel’s cleaning and housekeeping duties.

[11]There was no written contract of the agreement reached in 2014 between the respondents and the claimant. The only contemporaneous document is a letter drafted by Mr Hesp on the hotel’s headed paper, dated 19th December 2014, addressed to Abergavenny Credit Union, which reports “I am pleased to confirm that [the claimant] works as a cleaner / housekeeper at the Great Western Hotel. The role involves ‘living in’ and as such this is [the claimant]’s home address.”

[12]In 2015, the claimant worked alone, completing all the cleaning functions for the hotel. On a daily basis, for each room that required servicing, she would strip the beds, wash, dry and iron the bed linen, make the beds with fresh sheets, clean the bedroom / dormitory. She was expected to complete this work before the room was needed later in the day. In addition, the claimant was expected to hoover and mop the bar area and clean the toilets in the bar. The claimant received regular instructions from Mr Hesp via telephone, indicating which rooms needed cleaning and which tasks she should prioritise. She did not work particular hours each day – she alleges she was having to work long hours each day to keep up with the laundry and cleaning requirements of the hotel; Mr Hesp believed it would only take the claimant 3 or 4 hours each day to complete the cleaning and laundry work. I accept it is more likely than not that the cleaning and laundry work was taking the claimant considerably longer than 4 hours each day, as Mr Hesp confirmed 2 ladies are now each working 3 or 4 hours per day completing the cleaning and laundry; whilst I accept the hotel may now be busier, I do not accept there is twice the amount of work that existed during the claimant’s employment at the hotel.

[13]Whilst Mr Hesp’s witness statement had indicated the claimant moved into the hotel on 1st May 2017, during oral evidence, in response to my question, Mr Hesp confirmed the claimant had actually lived in the hotel since 1st January 2015. The claimant and Mr Hesp agree that in late 2014 they verbally agreed that in return for undertaking the hotel’s cleaning and laundry duties, the claimant would be provided with free accommodation at the hotel and paid £36 per week. The change that occurred in May 2017 was that the claimant was provided with a proper bedroom in the hotel at that point in time. For at least a year prior to May 2017, whilst the claimant had been residing at the hotel, the claimant had been sleeping in a chair in the laundry room.

[14]During the period in question, the claimant was only working for the Hotel; she was not operating a cleaning business or cleaning any other premises. In 2016 and 2017, the hotel was busier and the claimant was struggling to complete all the housekeeping tasks. She asked Mr Hesp for help and was told she could have cleaning assistants if she wished. The claimant did pay part of her wages to an assistant on occasions. Mr Hesp also paid an assistant cleaner directly on occasions. However, I am satisfied that these “assistant cleaners” were not undertaking the same overall housekeeping function that the claimant was undertaking, rather they were working alongside the claimant helping her to get through the volume of work. In reality the claimant could not send another person to the hotel to work as “the housekeeper” – she was expected to undertake this role personally and was expected to live in the hotel to be available as and when required. Whilst the hotel appears to have had a number of “managers’, none of these were living in the hotel. I accept the claimant would regularly check guests into the hotel and show them to their rooms and would step in and undertake whatever task was required.

[15]Mr Hesp confirmed the hotel had 5 part-time employees. As the live-in housekeeper, the claimant performed an integral role within the hotel’s business.

[16]The ‘tools’ that the claimant required to undertake her work were all provided by the hotel; these included mops and buckets, washing machine, washing powder, cleaning products.

[17]In May 2016, the chef was leaving the hotel, so the claimant agreed to increase her duties to include preparing breakfasts as and when needed. It was agreed she would be paid an additional amount for work involved in preparing breakfasts. The claimant continued to undertake this additional role up until the end of her employment with the hotel.

[18]Nearly twelve months after the Claimant started preparing breakfasts, Mr Hesp wrote to the claimant on 12th April 2017, “With reference to our discussions regarding working with me to develop the food offering at the Great Western whilst also working as housekeeper. I am pleased to confirm that your remuneration will include live in accommodation in the form of your own private room. I have put a commercial value of £120 a week on this accommodation but discounted to £80 per week as part of your remuneration.” This letter ended with “by signing this letter you also confirm that you have been responsible for your own tax and national insurance up to this point.”

[19]On 15th May 2017, Mr Hesp made arrangments for the claimant to be paid via the business’s payroll provider “[The claimant] moved into the pub on 1st May. The idea is that she lives in and can perform several roles, the main one being to cook meals. She will also be cooking breakfasts for the bed and breakfast guests and doing some cleaning. I will take another month or so before we get the food going but in the meantime she has been cleaning / washing and ironing in return for the accommodation, I have set a value of £80 per week for the accommodation and she has also been cooking some breakfasts. She has been paid cash for these. Last week this amounted to £50. So I guess that effectively she has commenced employment. I assume that even on a week one / month one basis she will not be paying tax on these amounts?” In fact, as noted earlier, the claimant had been working as a cleaner / housekeeper and living in the hotel and paid wages continuously since the end of 2014 / start of 2015.

[20]On 16th May 2018, Mr Hesp wrote to the claimant, “With reference to our recent meeting and discussions regarding your position as Housekeeper and breakfast chef. I am pleased to confirm that with effect from Monday 21st May 2018 your revised hours of work will be 7.00am until 11.00am 6 days a week. Your remuneration will be £7.83 per hour based on 24 hours per week. As part of your employment package you will receive subsidised accommodation in the form of a private single bedroom with shared shower facilities. The charge for this is £80 per week which will be deducted from your wages. You are the only member of staff living in and for safety reasons we need you to advise us if you are staying away overnight or for any longer period of time. As you are aware Lisa Gregory will be covering your day off (4 hours) and working a further 6 hours assisting you in ensuing the bedrooms are ready to be occupied, the common areas, showers and toilets are cleaned, the laundry is processed. For clarity I restate our conversation that I expect you to be in attendance at the Great Western between the hours of 7.00 am and 11.00am six days per week that you are working. Any shopping or other errands should be carried out after 11.00am….It is not acceptable to me for you to request other members of staff to carry out your duties and remunerate them yourself. Please ensure that this doesn’t happen in future…” Just as the documents quoted in paragraph 19 and 20 of this judgment do, this letter paints a misleading picture of what was actually happening in practice. The claimant was having to work long hours each day for the hotel, far longer than 4 hours per day – the shopping being referred to was shopping for the hotel, ie food for breakfasts and cleaning provisions. To be able to complete her workload, the claimant was often ironing late into the night. Crucially, the claimant was not “requesting other members of staff carry out her duties and remunerating them herself”, rather, with Mr Hesp’s knowledge, as the claimant could not physically complete all the cleaning work, the claimant, and sometimes Mr Hesp, were paying other people to work as assistant cleaners, albeit he was asking the claimant to physically pass on their wages to them. Nobody else was carrying out the claimant’s role as housekeeper and since May 2016, as breakfast chef.

[21]On 20th May 2018, the claimant resigned by letter addressed to Mr Hesp “Please accept my resignation with immediate effect. The unreasonable working conditions, scant help, long daily hours covering several departments, no day off or minimum wage for three years do not augur well for my future at the Great Western Hotel. Moreover the contract you have recently proposed does not reflect the content of several discussions we have shared since May 2016 when I began breakfast duties”.

The Law

[22]Only an “employee” can present a claim of unfair dismissal. S230(1) Employment Rights Act 1996 provides: “(1) In this Act “employee” means an individual who has entered into or works under (or where the employment has ceased, worked under) a contract of employment.

(2) In this Act, “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.”

[23]An employee works under a contract of service, whereas a self-employed person works under a contract for services.

[24]As there is no precise definition of a contract of service the courts and tribunals have adopted a mixed test to identify whether an individual was working under a contract of service. The starting point is Mr Justice MacKenna’s formulation of the test in Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance [1968] 2 QB, “A contract of service exists if these three conditions are fulfilled.(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.

(ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master.

(iii) The other provisions of the contract are consistent with its being a contract of service. ….As to (i). There must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job either by one's own hands or by another's is inconsistent with a contract of service, though a limited or occasional power of delegation may not be… …As to (ii). Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted. What matters is lawful authority to command so far as there is scope for it. and there must always be some room for it, if only in incidental or collateral matters. To find where the right resides one must look first to the express terms of the contract, and if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication. …An obligation to do work subject to the other party's control is a necessary, though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge's task is to classify the contract (a task like that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control…”

[25]For a contract of employment to exist, four essential elements must be fulfilled:a. a contract (either express or implied) must exist between the respondents and the claimant;

b. there must be an obligation on the claimant to provide work personally;

c. there must be mutual obligation, ie an obligation on the respondents to provide the claimant with work and an obligation on the claimant to accept and complete any work offered to her; and

d. the respondents must have sufficient degree of control over the claimant.

[26]If the four essential elements are established, I should go on to consider the surrounding circumstances as these will also indicate whether this is a contract of service (and the claimant is an employee) or a contract for services (and the claimant was not an employee).

[27]From the authorities I have derived the following:a. “Freedom to do a job either by one's own hands or by another's is inconsistent with a contract of service, though a limited or occasional power of delegation may not be”: whilst there must be an obligation on the claimant to personally perform the work, it is possible for this to still exist despite a limited or occasional delegation of work.

b. I should consider the extent to which the claimant was integrated into the respondent’s business. As part of this, it might be helpful to consider whether the claimant actively marketed her services to the world in general or whether she was recruited by the respondent to work as an integral part of their operations.

c. If the true relationship of the parties is that of master and servant under a contract of service, the parties cannot alter the truth of that relationship by putting a different label upon it. Conclusions The contract

Conclusions

[28]There was no written contract. There is scant evidence of the oral agreement reached in 2014. I note it was orally agreed between Mr Hesp and the claimant that in return for undertaking the hotel’s cleaning and laundry duties, the claimant would be provided with free accommodation at the hotel and paid £36 per week. In December 2014, Mr Hesp also reported “the role involves ‘living in” the hotel. Personal Service

[29]The claimant was required to personally perform this contract. I note she was occasionally assisted in undertaking the cleaning duties, by one or two ladies that she shared her wages with or that Mr Hesp paid, but this was only part of her duties. She did not expect anyone else to perform her role as Housekeeper (or from 2016 as breakfast chef). Further and in the alternative, as Lord Wilson pointed out in Pimlico Plumbers v Smith

[2018] UKSC 29

, “assistance in performance is not the substitution of performance”. Mackenna J noted in Ready Mixed Concrete that “limited or occasional power of delegation” may not be inconsistent with a contract of service. I am satisfied that the claimant was required to personally perform this contract and that the dominant feature of this contract was that it would be performed by the claimant herself. Mutual Obligations

[30]From the outset there was an obligation on the respondents to provide the claimant with work; she was to undertake the cleaning and housekeeping function for the hotel and was to be paid partly in accommodation and partly in cash for this work.

[31]Equally there was an obligation on the claimant to accept and complete any work necessary to keep the hotel clean, to service bedrooms and laundry as required and from 2016 to prepare any breakfasts required, as well as undertaking any shopping the hotel needed. Sufficient Control

[32]Whilst the claimant was not closely supervised, quite clearly the respondents did exercise control over which tasks she prioritised, and Mr Hesp was in regular contact by phone, providing the claimant with instructions as to what she needed to do. Practically she had the pressure of turning around rooms quickly enough for guests that were booked into the hotel - she was just expected to complete the work and meet these urgent deadlines, no matter how long this made her working day. Other Considerations

[33]. It has been submitted that the fact that the claimant was not included on the respondent’s payroll until May 2017 is indicative of her being self-employed rather than an employee prior to that date. I found the documents referred to in paragraphs 18, 19 and 20 of this judgment to be self-serving and not representing the true position. The claimant only signed the letter referred to in paragraph 18 as she was desperate to sleep in a bed and to have a bedroom rather than having to sleep in the laundry room. This reflects how difficult the claimant’s circumstances were and how little bargaining power she had in this relationship. The claimant was not included on the respondent’s payroll earlier as this required the respondent to make the arrangements.

[34]In this case, the claimant was, at all relevant times, highly integrated into the respondent’s business – she was a key person, the go-to person that ensured rooms were ready for guests, breakfast was served and the hotel was presentable.

[35]From December 2014 onwards, the relationship that existed between the claimant and the respondents was one of master and servant – it was only by the claimant complying with the respondent’s every instruction, completing work quickly, turning her hand to whatever was necessary to get the rooms ready and more importantly by being at Mr Hesp’s beck and call around the clock, that Mr Hesp was able to keep the hotel ticking over whilst working fulltime in Devon and Cornwall.

[36]At the hearing, it was suggested that once the issue of employment status was determined the parties may be able to resolve the remaining issues. In the event of there being further issues to be determined, parties are requested to agree suitable case management directions and write to the Tribunal within 14 days of receipt of this Judgment, confirming the directions that have been agreed. EMPLOYMENT TRIBUNALS Claimant: Mrs Miles Respondent: GS & LT Hesp t/a The Great Western Hotel Heard at: Cardiff (via video) On: 18th & 19th February 2021 and 5th March 2021 Before: Employment Judge Howden-Evans Tribunal Member W Morgan Tribunal Member C Stephenson Representation Claimant: Mr Leong, Solicitor, Newport CAB Respondent: Mr G Hine, Solicitor Judgment on Liability The Tribunal’s unanimous decision is: 1. The claimant’s complaint that there were unauthorised deductions from her wages is well founded, in that she had not been paid the national minimum wage. 2. The constructive unfair dismissal complaint is well founded; the respondent has unfairly dismissed the claimant by breaching the implied term of trust and confidence. 3. Contrary to s40(1)a and s26 of Equality Act 2010 the respondent has harassed the claimant by unwanted conduct of a sexual nature. 4. The claimant’s complaint under Regulation 30 Working Time Regulations 1998, that the respondent has refused to permit the claimant to exercise her rights under Regulation 13 and 13A Working Time Regulations 1998 is well founded. 5. The tribunal did not have jurisdiction to consider the claimant’s claim of age discrimination, it having been presented outside the time limits in s123 Equality Act 2010. The Remedy Hearing is listed for 21st April 2021 and will be conducted wholly remotely by video. It has a time estimate of 1 day. Note of Key Findings to assist parties to prepare for the Remedy Hearing 1. The Tribunal accepted the claimant had not been paid the national minimum wage throughout her employment (ie since 5th January 2015) but, was only eligible to claim for the period 24th October 2016 to 20th May 2018 (because of s23(4A) Employment Rights Act 1996). We found that throughout this relevant period the claimant was working 60 hours per week on average; 52 weeks of the year. 2. Whilst the respondent has deducted £80 per week for accommodation from the claimant’s wages, throughout the relevant period, the Tribunal noted that the claimant was only provided with a bedroom from May 2017 and had been sleeping in the laundry room in the cellar prior to this date – the tribunal notes that one issue that will need to be determined at the remedy hearing is whether the allowance that can be offset for providing accommodation (when calculating the national minimum wage) is applicable in these circumstances. 3. The Tribunal accepted the claimant had received unwanted conduct of a sexual nature on 3 occasions, as alleged in the claimant’s further information. 4. The Tribunal accepted, as parties agree, that the claimant had not taken a single day of holiday leave, since her employment commenced on 5th January 2015. We found the respondent had refused to permit the claimant to exercise her right to take paid annual leave – the claimant had requested time off and had been told “We can’t spare you. You worked last year without a day off – you can do it again”. We accepted that the appropriate approach to the claimant’s holiday entitlement was to make an award of compensation under Regulation 30 (3) & (4) Working Time Regulations 1998 as suggested by the EAT in Sash Window Workshop Limited and King and expanded by the Court of Appeal and ECJ in that case. In light of the ECJ’s decision in Max-Planck-Gesellschaft zur Forderung der Wissenschaften e V v Shimizu

[2019] 1 CMLR 1233

, the Tribunal accept it is just and equitable in all the circumstances for the claimant to be compensated for 84 days holiday in the holiday years 2015, 2016 and 2017. 5. The claimant’s holiday pay outstanding for the holiday year 2018 will be determined at the remedy hearing.

Findings of fact

[37]When she ceased employment with the Respondent, on 20th May 2018 she moved into a coach house as the owner offered her free accommodation to help her to leave the Respondent.

[38]In July 2018, the Claimant became a full time carer for the elderly widow and moved in to live with her. She was then paid £150 per week until 23rd December 2018. Sadly the elderly widow died on 17th December 2018. The Claimant was allowed to live in the widow’s flat until 25th March 2019 at which point she moved into Belmont House Residential Home as an unpaid carer for the home owners, an elderly couple. She continues to live at this address and care for one of the home owners.

[39]In October 2019, the claimant started to receive her state pension and in October 2020, the claimant started to receive her teachers’ pension.

[40]The tribunal accept that the Claimant has not provided any evidence suggesting she has looked for alternative employment since leaving employment with the Respondent; rather she has very kind-heartedly chosen to help friends in return for accommodation. The Law - Remedies under the Equality Act 2010

[41]s124 and s119 Equality Act 2010, enable an employment tribunal to order the Respondent to pay the Claimant compensation (ie any remedy that a High Court could grant in tort, including compensation for injured feelings); and enable an employment tribunal to make appropriate recommendations.

[42]It is well established that compensation is based on tortious principles. The aim is to put the Claimant in the position she would have been in if the discrimination had not occurred. (see for instance, Abbey National v Chagger

[2010] ICR 397

). The award should compensate the claimant for her loss caused by the discrimination; it is not to punish the respondent.

[43]An Injury to Feelings award attempts to provide compensation for “subjective feelings of upset, frustration, worry, anxiety, mental distress, fear, grief, anguish, humiliation, unhappiness, stress, depression and so on” caused by the discriminatory acts (per Lord Justice Mummery in Vento v Chief Constable of West Yorkshire Police (No.2)

[2003] IRLR 102

, CA)

[44]In Armitage, Marsden and H M Prison Service v Johnson

[1997] IRLR 162

, EAT, Mrs Justice Smith gave the following oft-cited guidance: “(1) Awards for injury to feelings are compensatory. They should be just to both parties. They should compensate fully without punishing the tortfeasor. Feelings of indignation at the tortfeasor’s conduct should not be allowed to inflate the award. (2) Awards should not be too low, as that would diminish respect for the policy of the anti-discrimination legislation. Society has condemned discrimination and awards must ensure that it is seen to be wrong. On the other hand, awards should be restrained, as excessive awards could, to use Lord Bingham’s phrase, be seen as the way to untaxed riches. (3) Awards should bear some broad general similarity to the range of awards in personal injury cases. We do not think this should be done by reference to any particular type of personal injury award; rather to the whole range of such awards. (4) In exercising their discretion in assessing a sum, tribunals should remind themselves of the value in everyday life of the sum they have in mind. This may be done by reference to purchasing power or by reference to earnings. (5) Finally, tribunals should bear in mind Lord Bingham’s reference to the need for public respect for the level of awards made.”

[45]The starting point, when considering the amount to award for injury to feelings is the guidance given by Lord Justice Mummery in Vento v Chief Constable of West Yorkshire Police (No 2)

[2003] IRLR 102

. In Da’Bell v NSPCC

[2010] IRLR 19

, EAT, Judge McMullen QC confirmed the figures adopted in Vento should be adjusted to reflect inflation and subsequent Presidential Guidance notes have further adjusted the Vento figures to reflect the Court of Appeal decisions in Simmons v Castle

[2012] EWCA Civ 1039

[46]The Tribunal is grateful to both advocates for providing examples of comparable injury to feelings cases. We are also aware of amounts recommended in the Judicial Studies Board Guidelines for personal injury awards. However, the tribunal are also mindful of EAT guidance that “a comparative exercise has to be treated with some caution”, as the amount of injury to feelings will depend on the particular facts of each case.

[47]Turning to aggravated damages, these can be awarded where an employment tribunal is satisfied the respondent has “behaved in a high-handed, malicious, insulting or oppressive manner in committing the act of discrimination.’ (see Alexander v Home Office

[1988] IRLR 190

, 193, May LJ)

[48]The Law Commission Report 247, on Aggravated, Exemplary and Restitutionary Damages, attempted to define aggravated damages: “the best view, in accordance with Lord Devlin’s authoritative analysis in Rookes v Barnard

[1964] AC 1129

, appears to be that they are damages awarded for a tort as compensation for the plaintiff’s mental distress, where the manner in which the defendant has committed the tort, or his motives in so doing, or his conduct subsequent to the tort, has upset or outraged the plaintiff. Such conduct or motive aggravates the injury done to the plaintiff, and therefore warrants a greater or additional compensatory sum.”

[49]In Commissioner of Police of the Metropolis v Mr H Shaw UKEAT 0125 /11/ZT, EAT, Mr Justice Underhill, emphasised that aggravated damages are compensatory; they should not be used to punish conduct. Mr Justice Underhill explained the features that can attract an award of aggravated damages can be classified under 3 heads: 49.1. the manner in which the defendant has committed the tort; 49.2. the motive for it; and 49.3. the defendant’s conduct subsequent to the tort, but in relation to it.

[50]The features identified affect the award of compensation because they aggravate the distress caused by the actual wrongful act. Employment tribunals should ask “what additional distress was caused to this particular claimant, in the particular circumstances of this case, by the aggravating feature(s) in question?”

[51]Aggravated damages are an aspect of injury to feelings and may be expressed as a separate award or as an element of the injury to feelings award.

[52]“The ultimate question must be not so much whether the respective awards [injury to feelings and aggravated damages] considered in isolation are acceptable but whether the overall award is proportionate to the totality of the suffering caused to the claimant.” Commissioner of Police of the Metropolis v Mr H Shaw UKEAT 0125 /11/ZT, EAT, Mr Justice Underhill. The Law – Remedies under Employment Rights Act 1996 and National Minimum Wage Regulations

[53]The process for determining whether the national minimum wage has been paid is set out in the National Minimum Wage Regulations 2015 (NMWR), Regulation 7 - to calculate the worker’s average hourly rate the tribunal need to divide the total qualifying remuneration received in the given pay reference period by the number of hours worked in that period and compare this figure with the appropriate national minimum wage rate at the time.

[54]NMWR, Regulation 6 defines the pay reference period as being a maximum of one month or in the case of a worker who is paid wages by reference to a period shorter than the month, that period. So as the Claimant was paid weekly, the appropriate pay reference period is one week.

[55]When considering the total remuneration received during a period, the tribunal needs to consider the gross amount (ie before deductions) received.

[56]Where an employer has deducted a charge from the worker’s pay in respect of the provision of accommodation, Regulation 14(1), NMWR provides that, to the extent that the accommodation charge exceeds the accommodation offset allowed, it will be deducted from the total remuneration received during the pay reference period

[57]When a worker is paid at a rate less than the national minimum wage, S17(1) NMWA 1998 provides the worker is entitled to be paid the greater of 57.1. The shortfall between the amount paid and the amount that should have been paid under the NMW at the time; and 57.2. The sum payable if the rate of the NMW applying at the time of the arrears being determined had been applicable throughout the relevant period. Conclusions Unauthorised deductions from wages; failure to pay National Minimum Wage

Conclusions

[58]We accept the correct approach to calculating this loss is set out in the National Minimum Wage provisions.

[59]To calculate this we have: 59.1. Worked out the total qualifying remuneration received by the Claimant in the given pay reference period (taking into account the effect of the charge for accommodation and the accommodation offset allowed) 59.2. divided the total qualifying remuneration received by the Claimant in the given pay reference period by the number of hours worked in that period and compared this figure with the appropriate national minimum wage rate at the time. 59.3. Then having worked out the amount of the original underpayment in the pay reference period we have divided that by the minimum wage rate that applied at that time 59.4. and multiplied the figure by the minimum wage rate that applies now (to comply with S17(1) NMWA 1998).

[60]Working from the P60 and payslips, which was the best evidence available to us, we accept that at all relevant times the Respondent was deducting £80 per week for accommodation. We are not aware of any authority that defines the term “accommodation” for the purposes of NMW provisions, so we have had to accept that the Respondent is entitled to offset accommodation even when the accommodation provided consisted of a dilapidated chair to sleep on in the laundry room in the cellar.

[61]During the period 24th October 2016 to 1st April 2018 the best evidence we have as to the Claimant’s gross weekly remuneration is the P60 which indicates her gross weekly income was £122.92 per week (before deductions).

[62]During the period 1st April 2018 to 20th May 2018, the best evidence we have are the pay slips which indicate the Claimant’s gross weekly income was £129 per week (before deductions).

[63]The Accommodation offset permitted in NMWR was 63.1. £42 per week between 24th October 2016 and 31st March 2017 (22.6 weeks). 63.2. £44.80 per week between 1st April 2017 and 31st March 2018 (52 weeks) 63.3. £49 per week between 1st April 2018 and 20th May 2018 (7 weeks)

[64]This means the amount of accommodation charged (£80 per week) exceeded the accommodation offset permitted in the NMWR by the following amounts: 64.1. £38 per week (£80 charged - £42 per week permitted) between 24th October 2016 and 31st March 2017 (22.6 weeks). 64.2. £35.20 per week (£80 charged - £44.80 per week permitted) between 1st April 2017 and 31st March 2018 (52 weeks) 64.3. £31 per week (£80 charged - £49 per week permitted) between 1st April 2018 and 20th May 2018 (7 weeks)

[65]We then calculated the total remuneration received by the Claimant in the given pay reference period (taking into account the effect of the charge for accommodation and the accommodation offset allowed) 65.1. During the period 24th October 2016 to 31st March 2017 (22.6 weeks) the Claimant’s total remuneration was £84.92 per week (gross weekly income of £122.92 per week minus the £38 by which the accommodation charged exceeded the accommodation offset permitted by NMWR). 65.2. During the period 1st April 2017 to 31st March 2018 (52 weeks) the Claimant’s total remuneration was £87.72 per week (gross weekly income of £122.92 per week minus the £35.20 by which the accommodation charged exceeded the accommodation offset permitted by NMWR). 65.3. During the period 1st April 2018 to 20th May 2018 (7 weeks) the Claimant’s total remuneration was £99 per week (gross weekly income of £130 per week minus the £31 by which the accommodation charged exceeded the accommodation offset permitted by NMWR).

[66]As the Claimant was averaging 60 hours work per week, each week she was being paid: 66.1. During the period 24th October 2016 to 31st March 2017 (22.6 weeks) the Claimant was paid £1.41 per hour (£84.92 per week divided by 60 hours). 66.2. During the period 1st April 2017 to 31st March 2018 (52 weeks) the Claimant was paid £1.46 per hour (£87.72 per week divided by 60 hours). 66.3. During the period 1st April 2018 to 20th May 2018 (7 weeks) the Claimant was paid £1.65 per hour (£99 per week divided by 60 hours).

[67]This meant the Claimant was paid less than the minimum wage as follows: 67.1. During the period 24th October 2016 to 31st March 2017 (22.6 weeks) the Claimant was paid £1.41 per hour when the NMW was £7.20 per hour. This was an underpayment of £5.79 per hour for 60 hours per week for 22.6 weeks = £7,851.24 67.2. During the period 1st April 2017 to 31st March 2018 (52 weeks) the Claimant was paid £1.46 per hour when the NMW was £7.50 per hour. This was an underpayment of £6.04 per hour for 60 hours per week for 52 weeks = £18,844.80 67.3. During the period 1st April 2018 to 20th May 2018 (7 weeks) the Claimant was paid £1.65 per hour when the NMW was £7.83 per hour. This was an underpayment of £6.18 per hour for 60 hours per week for 7 weeks = £2,595.60

[68]To comply with s17(1) NMWA 1998, we have divided the original underpayment by the minimum wage rate that applied at that time and multiplied this by the minimum wage rate that applies now (£8.91 per hour). 68.1. During the period 24th October 2016 to 31st March 2017: The underpayment of £7,851.24, divided by £7.20 per hour is 1,090.45 x current NMW (£8.91) = £9,715.90 68.2. During the period 1st April 2017 to 31st March 2018: The underpayment of £18,844.80, divided by £7.50 per hour is 2,512.64 x current NMW (£8.91) = £22,387.62 68.3. During the period 1st April 2018 to 20th May 2018: The underpayment of £2,595.60, divided by £7.83 per hour is 331.49 x current NMW (£8.91) = £2,953.57.

[69]This means the total amount owed to the Claimant as an unlawful deduction from wages for failing to pay the national minimum wage is £35,057.09 (£9,715.90 + £22,387.62 + £2,953.57). Discrimination by sexual harassment - Appropriate Recommendations:

[70]The tribunal finds that the following recommendations would obviate or reduce the adverse effects of the discrimination on the Claimant: 70.1. On or before 14th August 2021, Mr Hesp should write a letter of apology addressed to the Claimant, care of Newport CAB. The tribunal have considered the authority of The Governing Body of St Andrews Catholic Primary School & Ors v Blundell (which Counsel for the Respondent referred us to). We note that Mr Hesp does not concede he sexually harassed the Claimant; this Tribunal has found that whilst Mr Hesp may not have deliberately sexually harassed the Claimant, his actions had that effect upon the Claimant. We are not dictating the words to be used in this letter of apology, rather we expect Mr Hesp to reflect on the impact his actions have had on the Claimant and to write a suitable letter. 70.2. On or before 31st January 2022, the Respondent should have in place and have notified its workers of written policies and procedures covering: 70.2.1. Grievance procedures; and 70.2.2. Equality and diversity. 70.3. On or before 31st January 2022, Mr Hesp should have attended at least a 1 day training course in discrimination and harassment; this training needs to cover sexual harassment.

[71]On or before 25th February 2022, the Respondent should write to the Employment Tribunal confirming that each of these recommendations has been complied with, within the specified time scale.

[72]Whilst the Claimant is no longer employed by the Respondent, the tribunal considers it will reduce the Claimant’s hurt feelings if Mr Hesp now takes steps to ensure that no future employee or worker experiences the treatment the Claimant has experienced. By contacting ACAS or a firm of solicitors, Mr Hesp will be able to find suitable policies and access suitable training, and this will give the Claimant some comfort that current workers at the Respondent’s hotel are unlikely to experience harassment in the future and will know how to raise a grievance should they encounter problems.

[73]The tribunal has declined to make any further recommendations The appropriate award for Injury to Feelings (including any aggravated damages).

[74]The tribunal are tasked with fully compensating the Claimant for her loss that has been caused by the unlawfully discriminatory acts.

[75]The tribunal considered whether it was appropriate to make an award for aggravated damages and considered the 3 heads identified by Mr Justice Underhill in Commissioner of Police of the Metropolis v Mr H Shaw (the manner, the motive and the defendant’s conduct subsequent to the tort, but in relation to it). The Claimant has suggested it is appropriate to award aggravated damages as Mr Hesp was the claimant’s manager, there was no grievance policy in place and Mr Hesp has subsequently denied harassment.

[76]The Tribunal reminded itself that aggravated damages must be compensatory in nature; in relation to any aggravating features the Tribunal must ask “what additional distress did they cause to this particular claimant?” This was where the Tribunal was in difficulty as the claimant has not identified any additional hurt that had been caused by these factors. In the absence of any evidence of additional distress, the Tribunal has declined to make an award specifically attributed to Aggravated Damages.

[77]Turning to consider the overall Injury to Feelings award, the Tribunal considered whether it was possible to separate the Injury to Feelings caused by each of the acts of discrimination and concluded it would be artificial to do so. Instead, the tribunal has had in mind all 3 acts of discrimination and the impact that they collectively had upon the Claimant.

[78]As noted in the findings of fact, we are compensating the Claimant for the injury to feelings caused by 3 incidents of sexual harassment. On each occasion the Claimant was alone with Mr Hesp and Mr Hesp put his arm around her waist, which the Claimant reasonably felt violated her dignity and created a degrading and humiliating environment.

[79]We acknowledge that the Claimant felt powerless to do or say anything about these incidents and that this has had an appreciable impact on her. We accept that as a mature lady these incidents caused the Claimant upset and added to her feelings of low self-esteem. However, we note that the Claimant has not had to seek help from her GP or others and has not been too unwell to work or to go about her day-to-day activities as a result of these incidents.

[80]Having considered the authorities we are satisfied that it is appropriate to make an award in the Vento bottom-band. We are awarding an overall Injury to Feelings award of £7,000. We are satisfied that this award fully and fairly compensates the Claimant for the distress she experienced as a result of these 3 incidents of sexual harassment. Interest on the Injury to Feelings award

[81]The tribunal has a discretion to award interest on the injury to feelings award at up to 8% per annum from the act of discrimination. As there are a number of acts of discrimination, the Tribunal has decided to award interest from, 1st September 2015, as the Claimant had experienced the first act of discrimination by this date. Reg 6 Employment Tribunals (Interest on Awards in Discrimination Cases) Regulations 1996 explains this should be calculated up to the day of calculation. The Tribunal has calculated interest up to 29th April 2021 at a rate of 8% per annum. This amounts to 2068 days (inclusive) and the interest on the Injury to Feelings award amounts to £3,172.82. Compensation for being denied her rights under Regulation 13 and 13 A Working Time Regulations (“WTR”)

[82]As explained in paragraphs 113 to 117 of the Reasons provided in respect of the liability decision, the Tribunal are satisfied it is appropriate to award the Claimant compensation for the Respondent’s breach of Regulation 30(1)(a)(i) of WTR (ie for refusing to permit the Claimant to take any annual leave). Alternatively, the tribunal were satisfied it would be appropriate for the compensation awarded under Regulation 30(1)(b) WTR (the holiday pay due upon termination of the contract) to be increased by 60 days (to include Regulation 13 leave that was accrued but denied in the years 2015, 2016 and 2017 (see discussion in paragraphs 106 to 112 of those Reasons).

[83]We considered what amount of compensation would be just and equitable to award in respect of the Respondent’s breach of Regulation 30(1)(a)(i). When we reflected on the Claimant’s loss, we accept the Claimant has already been paid for each of these days (as she has worked for each of these days). However, during a worker’s final year of work with an employer, they have also worked (and been paid for) days of holiday that they have accrued but not taken and WTR operates to pay them at a rate of 1 week’s wages for each week of holiday accrued but not taken during that final year of employment.

[84]We also considered the extent of the employer’s default. In this case, the employer had totally denied the Claimant’s right to take holiday leave, let alone paid leave, for 3 years 5 months.

[85]In light of the EAT, Court of Appeal and ECJ decisions in Sash Window Workshop Limited and King and in light of the ECJ decision in Max-PlanckGesellschaft zur Forderung der Wissenschaften e V v Shimizu

[2019] 1 CMLR 123

, we considered it was just and equitable in all the circumstances for the Claimant to be compensated for the health and welfare benefits of 84 days’ holiday that she had been denied in the holiday years 2015, 2016 and 2017. The best method of quantifying the value of these health and welfare benefits was to award a day’s pay for each day of holiday that had been missed (just as the WTR operates in the final year of a worker’s employment).

[86]The Claimant is seeking compensation of £4,996.02 for the 84 days of holiday that she was denied (as calculated in the Schedule of Loss). This calculation takes into account the correct national minimum wage that was applicable at the time. Having checked this calculation, the Tribunal are satisfied it is appropriate to award compensation of £4,996.02 for compensation for being denied her rights to take holiday during the period 2015, 2016 and 2017.

[87]In addition, the Claimant is seeking a further £12,500 for not being permitted to take any holiday throughout her 3 ½ years of employment. There is no evidence of any injury to the Claimant’s health and no evidence of any further loss associated with this denial of the Claimant’s rights. In the absence of any further loss, the tribunal has declined to make any further award of compensation. Holiday pay for the period 1st January 2018 until 20th May 2018

[88]The Tribunal accept the Claimant has correctly calculated this loss in her Schedule of Loss. The Tribual awards £704.70 in respect of holiday accrued but untaken in the year 2018. Notice pay

[89]Parties agree the Claimant is owed £1,409.40 in respect of notice pay. Unfair dismissal

[90]Parties agree the Claimant’s basic award is £2,354.40.

[91]The Claimant contends the compensatory award should be £21,765.12 for one year’s loss of earnings. However, the Tribunal accept that since leaving employment with the Respondent, the Claimant has not looked for alternative employment. Instead, she has very kind-heartedly chosen to help out friends in return for accommodation. In these circumstances, the Tribunal cannot say that the Claimant has attempted to mitigate her loss. The Tribunal accept that there should be no award for loss of earnings or loss of employer contributions to pension.

[92]The Tribunal award the Claimant £500 for loss of statutory rights. Grossing up

[93]The tribunal considered whether it was appropriate to “gross up” the award to reflect the tax the Claimant will have to pay on this award (beyond the £30,000 tax free threshold). As the bulk of this award (the national minimum wage calculations) are calculated using gross (rather than net) pay, the Tribunal considered it would not be appropriate to gross up this award. To be clear, the Respondent is liable to pay the Claimant the total sum of £55,194.43 – there should be no deductions for tax or national insurance as the Claimant will account for these. Recoupment Regulations

[94]The Recoupment Regulations do not apply to this award. Interest

[95]If the full amount of this award is paid before 27th July 2021, no additional interest will be payable. If the award is not paid before 27th July 2021, additional interest at a rate of £12.10 per day will be payable from 13th July 2021 until payment. (see the Employment Tribunal (Interest) Order 1990).