Employment Judge HodgsonMr Airey (instructed by solicitor) for claimantMs Singer (instructed by counsel) for respondentDate 29 July 2022
JUDGMENT
[1]Poppies (Camden) Limited shall be as the sole respondent in this case and is substituted for the previous respondent.[2]The claim of unfair dismissal is well founded and succeeds.[3]The claim of wrongful dismissal succeeds subject to loss being established.[4]The claim for unlawful deduction of wages is dismissed on withdrawal.[5]The claim that the particulars of reasons for dismissal are inadequate or untrue pursuant to section 93 Employment Rights Act 1996 is not well founded and is dismissed.[6]The claim for failure to pay accrued holiday pay pursuant to the Working Time Regulations 1998 is not withdrawn and shall be determined at the remedy hearing.[7]Any payment pursuant to section 38 Employment Act 2002 shall be considered at the remedy hearing.[8]There will be a further hearing to determine remedy. - 1 -
REASONS
1.1 On 4 January 2021, the claimant commenced proceedings in London Central employment tribunal. He brought a number of claims including unfair dismissal. The Issues2.1 I considered the issues at the start of the hearing.2.2 The respondent disputed it was the correct respondent. It alleged Poppies (Camden) Ltd was the claimant’s employer.2.3 The claimant alleged unfair dismissal. The respondent's alleged he was dismissed fairly for a reason related to conduct.2.4 The claimant alleged that he was not bound by any variation of contract associated with furlough and that he should receive the balance of his wages back to March 2020.2.5 The claimant alleged that he had not received, pursuant to regulation 14 Working Time Regulations 1998, for payment in lieu of holiday accrued but not taken.2.6 The claimant alleged breach of section 93 Employment Rights Act 1996, it being his case that the reason given in purported compliance was inadequate or untrue.2.7 The claimant sought an award pursuant to section 38 Employment Act 2002 for breach of section 1(1) Employment Rights Act 1996. He alleged he had not been sent a contract in 2013 and further he had received no section 4(1) notice of change following furlough.2.8 The claimant alleged wrongful dismissal. Evidence3.1 The claimant gave evidence.3.2 The respondent called three witnesses: Mr Ural Hassan, the respondent's director; Mr Ekrem Hassan, the respondent's business development manager; and Mr Osman Aziz, sole director of London's Fish Shop Ltd, who shares office space with his cousin, Mr Ural Hassan.3.3 I received a bundle of documents and a supplementary bundle of documents was also agreed. - 2 -3.4 The claimant gave written submissions.3.5 I received further submissions from both parties after the hearing had ended. Concessions/Applications4.1 The respondent initially indicated the claimant’s employment status may be disputed. However, it was subsequently conceded he was an employee.4.2 At the conclusion of submissions, Mr Airey sought to amend to change the identity of the employer. This was initially resisted. By consent, the claimant agreed to provide a specific written application. Both sides agreed to provide written submissions. Both agreed that I should determine the matter on the basis of those submissions. I deal with the application to amend below.4.3 At the start of submissions, the claimant withdrew the claim for unlawful deduction from wages. The claim for accrued holiday pay remained live.4.4 There had been a request for anonymisation which was dealt with prior to the hearing by EJ Burns. The application was not renewed.4.5 I have asked the parties to confirm whether they can agree the weekly wage for the purpose the regulation 14 claim. The Facts5.1 The claimant was dismissed, allegedly for gross misconduct, on 14 September 2020.5.2 The claimant alleged he was employed by Poppies Fish and Chips Ltd from 2011. It was the respondent's case that his contract transferred to Poppies (Camden) Ltd no later than April 2013. I find the claimant started working for Poppies Fish and Chips Ltd on or around 11 March 2011. I do not need to resolve whether he was unemployed beforehand. There is reference to a partnership agreement of 25 July 2011. It is not disputed he was an employee. I do not need to consider this further.5.3 I have seen a contract of employment which is undated but records that his employment began on 1 April 2013 (“the contract”). The contract confirms there was a change in 2013 when his 10% holding was increased 25%. I have also seen various payslips which indicate that the employer was Poppies (Camden) Ltd. The claimant has given no evidence to demonstrate why Poppies Fish and Chips Ltd remained his employer. I find on the balance of probability that the employer was Poppies (Camden) Ltd from at least 2013. The respondent does not dispute that he maintained continuity of employment. - 3 -5.4 At the time of the claimant's dismissal, he was the operations manager. He had been an area manager. The contract of employment referred to the claimant being an operations manager and records his salary was £100,000. In April 2013, his salary was less. His P60s demonstrate a salary of £30,000 in 2014, £35,000 in 2015, £39,250 in 2016, and £69,241.19 in 2017. There is no satisfactory explanation from the respondent for why the contract is undated, and unsigned. There is no satisfactory evidence as to when it was given to him or how. There is no satisfactory evidence as to when the new salary was included. Mr Ural Hassan's evidence states the claimant became operations manager around April 2017.5.5 It is arguable that the claimant's evidence was contradictory as to whether he received the contract or not. At times, he appeared to agree with counsel for the respondent that the contract had been sent to him, but this was not explored and no date or method was identified I am not satisfied that he fully understood the question or that he was making a concession. I find any apparent agreement in cross examination arose from confusion about the nature of the question. Generally, if a contract is given to an individual, there is a covering letter. Frequently a signed copy is retained. I have neither in this case. I am not satisfied the claimant conceded that the contract was sent to him. I find, on the balance of probability, this contract was not given to the claimant at any time.5.6 The respondent trades under the name Poppies Fish and Chips (Poppies). It has three shops and two market stalls. Before the pandemic it employed around one hundred and fifty staff. Mr Ural Hassan was the sole director. The staff included a number of relatives of both Mr Ural Hassan and the claimant.5.7 Around 2016, whilst the claimant was the area manager, the claimant had an interaction with a local resident, who has been identified by the respondent as Mr V Jo-nes.5.8 The resident had concerns and grievances about parking in Camden. In particular, it appears he alleged that employees, and possibly customers, of Poppies were given preferential treatment and parking fines were not imposed. Whatever his motivation, he would interact regularly with the claimant and raise his concerns. This led to a degree of friction. The resident would photograph the claimant. On one occasion, when the claimant was undertaking deliveries, he was feeling stressed. This led to him reacting negatively to the resident. The claimant lowered his trousers and exposed his penis. He did so out of anger; it was a lewd gesture demonstrating annoyance or contempt. The resident took a picture.5.9 Thereafter, the resident wrote some form of electronic leaflet or document in which used the photograph. I will refer to it as the photograph. The photograph is headed “Exposed” and then refers to “Poppies’ MiniFlasher.” It goes on to make general allegations about preferential - 4 - treatment for parking and it appears to suggest that the traffic enforcement officers are corrupt. The image of the claimant showing his penis is superimposed over the claimant’s car which appears outside Poppies restaurant. It is unclear whether this document was released on social media. I have no evidence that it was. I accept the claimant's evidence that he was unaware of the photograph.5.10 The photograph is confusing because it refers to a date and time, 05-08- 2018 at approximately 10:15:07. This would suggest the photograph was taken in 2018. It is this photograph Mr Ural Hassan says he discovered on 11 September 2020. I note his statement in a civil claim in the High Court states the date was 12 September 2020. I do not consider this to be significant, I accept that there was an error in his statement to the High Court.5.11 The respondent has a general email address for enquiries from customers being info@poppiesfishandchips.co.uk, Mr Ural Hassan states he was trying to find a logbook for a London black cab vehicle owned by the respondent. He checked the inbox and, as a result of the broad searchterms used, he came across an email from Camden-Streetphotos@hotmail.com dated 16 August 2016 and timed at 00:38 to which the photograph was attached. He says this is the first time he had seen the photograph, and I have no reason to doubt his evidence on this. When he found that email, it had already been opened. At no time did Mr Ural Hassan enquire who had opened it.5.12 The claimant alleges the respondent knew of the photograph since 2016. I have received limited evidence. The witness statements do not record who had access to the inbox. It is clear the in box was used for general enquiries. Mr Ural Hassan had access, but I accept that it was not his role to check it. I have no reason to believe that he opened the email in 2016. Other individuals, who were senior managers had access. I am not satisfied that I have received accurate evidence as to who had access. It has been suggested the claimant had access. Whilst he may have had the relevant authority, I accept his evidence that he did not access the inbox. Had he opened the email I find, on the balance of probability, that he would have deleted it. What is clear is that trusted employees had access to the email. Someone opened it. It is possible it was opened without the attachment being viewed, but I find on the balance of probability, that the attachment was viewed, as it was opened.5.13 I have no evidence to suggest that the respondent has ever sought to ascertain who opened the document in 2016 or what action was taken. However, what happened in 2016 is important. The fact that Mr Ural Hussain did not investigate in 2020, and the fact that the respondent has not produced any evidence about what happened in 2016, other than accepting the email was received and opened, does not preclude a finding that management was aware of the attachment in 2016. I must make findings of fact on the best evidence available. - 5 -5.14 I find the document was received in 2016. It was opened. On the balance of probability, it was viewed. On the balance of probability, it come to the attention of management. There is no suggestion any action was taken at the time. I therefore find that relevant managers in the respondent company were aware of this email, and the photograph, when it was sent in 2016.5.15 When Mr Ural Hassan viewed it on 11 September 2020, he took no steps to ascertain what had happened in 2016. He did not seek to discover who had opened it, or why no action had been taken at the time.5.16 Mr Ural Hassan decided to proceed with disciplinary action against the claimant.5.17 There has been dispute about whether there was a handbook in place. The evidence I have on this is limited. I accept there was some form of handbook in 2015 and that was subject to some form of review in 2019. However, the claimant never read the handbook. Mr Ural Hassan did not consult it when he commenced disciplinary proceedings.5.18 The handbook provides that disciplinary action will only take place after careful investigation of all the facts and after opportunity to present the employees case. It provides for formal verbal warnings that normally last three months, written warnings that last six months, and final written warnings that last 12 months. It says there is a right to appeal from any disciplinary action. He had received a previous warning. The warning period does not appear to equate with the provisions of the handbook. The fact of the warning is not relevant to any decision I must make. Any discrepancy in the period it remained live, and the handbook does not assist me.5.19 Mr Ural Hassan alleges that he called the claimant on 11 September 2021 and stated he had seen the photograph. He says he told the claimant his action may be considered an act of gross misconduct leading to summary dismissal and that he would arrange a meeting to discuss the matter. The claimant denies that that conversation took place. The claimant was not suspended. The claimant was not contacted by email, letter, or text. There is no documentary evidence in support of Mr Ural Hassan’s contention.5.20 I have been invited to prefer Mr Ural Hassan's evidence because the claimant's evidence is said to lack credibility.5.21 I accept there are times when the claimant's evidence has been poor, inconsistent and contradictory. However, there has also been difficulty with the evidence of the respondent's witnesses. I am not satisfied that anyone has demonstrated such frankness or consistency in his evidence that I would find it helpful to decide disputed facts on credibility alone. In this case an application of the balance of probability is likely to be more reliable. - 6 -5.22 On the balance of probability, if Mr Ural Hassan had contacted the claimant, as he said he had, there would have been some written evidence in support. It is likely that there would have been an email, text, or a letter. Further, it is likely the claimant would have asked a witness to attend, had he been told he was to attend a disciplinary. I therefore find that Mr Ural Hassan is mistaken and that he did not contact the claimant on 11 September 2020.5.23 It is agreed the claimant did attend a meeting on 14 September 2020. There is a dispute about whether he was contacted by Mr Ural Hassan or Mr Erkem Hassan. I accept most of the claimant's dealings were with Mr Erkwe Hassan. It is the claimant's case that he was asked to attend a meeting by Mr Ekrem Hassan, but was not told what it was about. Moreover, as he was frequently contacted by Mr Ekrem Hassan he had no reason to believe there was a disciplinary hearing. Mr Ekrem Hassan was not challenged on this point. I think it is possible that the claimant is right. However, I must decide this on the balance of probability. I find the claimant is mistaken and the phone call on 14 September was from Mr Ural Hassan. It is less clear to me whether it was said that it was a disciplinary hearing. Mr Ural Hassan gives no detail, and I have already found that he did not telephone the claimant on 11 September. I find if there was a mention of disciplinary hearings, no detail was given.5.24 The claimant did attend a meeting on 14 September 2021. The content of that meeting is disputed. I have heard from Mr Ural Hassan, Mr Ekrem Hassan, and Mr Osman Aziz, all of whom were present at the hearing. The claimant was alone and had no witness. Each of the respondent’s witnesses confirmed that the photograph contained in the email from 2016 was shown to the claimant and the claimant was asked to explain the circumstances. Mr Ural Hassan's evidence is the claimant shrugged and there was no further discussion. The claimant was told that his action was gross misconduct, and he was dismissed.5.25 The claimant says he was not shown the photograph, but instead he was told that Mr Ural Hassan no longer wished to continue working with the claimant, but that his rights would be observed, and his losses paid. It is his case he was given no reason for the dismissal.5.26 There is no clear evidence about the content of this meeting. Ms Mr Ural Hassan claims that he took notes, but the notes were put in the claimant's personnel file, which later disappeared.5.27 I have oral evidence of three individuals who say that the photograph was shown to the claimant. No contemporaneous documentation demonstrates the truth one way or the other. I think both accounts are feasible. I find the photograph was either shown to the claimant or it was referred to it. I find the conversation was brief. To the extent the claimant was asked for an explanation, I find that there was no serious attempt to - 7 - pursue any explanation or persuade the claimant to give any detail of the circumstances.5.28 The respondent alleges that a dismissal letter was sent. The respondent does not have a copy. The claimant says no letter was sent. It is the respondent's case that the hardcopy was kept on the claimant's file, and it has not been possible to retrieve any electronic copy.5.29 I received no adequate explanation for why the respondent should not be able to retrieve an electronic copy. No evidence was given about how the letter was generated. Most documents now are generated electronically. No evidence was given as to how it was sent. Frequently letters are now sent by email. I do not accept, on the balance of probability, this letter was generated other than by electronic means. I do not accept it has been lost. On the balance of probability, there was no letter.5.30 On 23 November 2020, the claimant’s solicitor requested a written statement of reasons for dismissal. The response of 7 December 2020 states "Your client very well knows that he was dismissed for gross misconduct. A copy of the offending document has already been supplied to him. He exposed his genitals in public whilst displaying a Poppies Tshirt." This says nothing about a letter of dismissal. Had there been a letter dismissal, on the balance of probability, it would have been referred to.5.31 I find that at no time was the claimant informed of his right to appeal. I accept the claimant knew, in principle, he could appeal.5.32 The claimant initially disputed signing a furlough agreement. He brought a claim for unlawful deduction from wages. That claim was withdrawn without explanation. There is an email from the claimant to Lalarukh Pervaiz on 25 March 2020 returning the attached furlough document and referring to the claimant's signature by touchscreen. I find the claimant was sent a furlough agreement on 25 March 2020. He signed it electronically and returned it on 25 March 2020. His original evidence, which suggested that he could not remember signing the statement, was misleading. He was on furlough as from 25 March 2020 until his dismissal. He agreed that he would not work for the business and would receive 80% of his pay up to a maximum of £2500 per month. The law6.1 Under section 98(1)(a) of the Employment Rights Act 1996 it is for the employer to show the reason (or, if more than one, the principal reason) for the dismissal. Under section 98(1)(b) the employer must show that the reason falls within subsection (2) or is some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. A reason may come within section 98(2)(b) if it - 8 - relates to the conduct of the employee. At this stage, the burden for showing the reason is on the respondent.6.2 In considering whether the employer has made out a reason related to conduct, in the case of alleged misconduct, the tribunal must have regard to the test in British Home Stores v Burchell [1980] ICR 303, and in particular the employer must show that the employer believed that the employee was guilty of the conduct. This goes to the respondent’s reason. Further, the tribunal must assess (the burden here being neutral) whether the respondent had reasonable grounds on which to sustain that belief, and whether at the stage when the respondent formed that belief on those grounds it had carried out as much investigation into the matter as was reasonable in all the circumstances. This goes to the question of the reasonableness of the dismissal as confirmed by the EAT in Sheffield Health and Social Care NHS Foundation Trust v Crabtree EAT/0331/09.6.3 In considering the fairness of the dismissal, the tribunal must have regard to the case of Iceland Frozen Foods v Jones [1982] IRLR 439 and have in mind the approach summarised in that case. The starting point should be the wording of section 98(4) of the Employment Rights Act 1996. Applying that section, the tribunal must consider the reasonableness of the employer's conduct, not simply whether the tribunal consider the dismissal to be fair. The burden is neutral. In judging the reasonableness of the employer's conduct, the tribunal must not substitute its own decision as to what was the right course to adopt for that of the employer. In many cases, though not all, there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view and another quite reasonably take another view. The function of the tribunal is to determine whether in the circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within that band, the dismissal is fair. If the dismissal falls outside that band, it is unfair.6.4 The band of reasonable responses test applies to the investigation. If the investigation was one that was open to a reasonable employer acting reasonably, that will suffice (see Sainsbury’s Supermarkets Ltd v Hitt [2003] IRLR 23.)6.5 Pursuant to section 207 Trade Union and Labour Relations (Consolidation) Act 1992 the ACAS Code on Disciplinary and Grievance Procedures 2015 (‘the Code’) is admissible in any employment tribunal proceedings, and the tribunal is obliged to take into account any relevant provisions of the Code. A failure to observe any provision of the Code shall not in itself render that respondent liable to any proceedings. The key relevant provisions in this Code are set out below.
Evidence
[4]… whenever a disciplinary or grievance process is being followed it is important to deal with issues fairly. There are a number of elements to this: - 9 -• Employers and employees should raise and deal with issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions.• Employers and employees should act consistently.• Employers should carry out any necessary investigations, to establish the facts of the case.• Employers should inform employees of the basis of the problem and give them an opportunity to put their case in response before any decisions are made.• Employers should allow employees to be accompanied at any formal disciplinary or grievance meeting.• Employers should allow an employee to appeal against any formal decision made. … …[5]It is important to carry out necessary investigations of potential disciplinary matters without unreasonable delay to establish the facts of the case. In some cases this will require the holding of an investigatory meeting with the employee before proceeding to any disciplinary hearing. In others, the investigatory stage will be the collation of evidence by the employer for use at any disciplinary hearing. …[9]If it is decided that there is a disciplinary case to answer, the employee should be notified of this in writing. This notification should contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting. It would normally be appropriate to provide copies of any written evidence, which may include any witness statements, with the notification. …[11]The meeting should be held without unreasonable delay whilst allowing the employee reasonable time to prepare their case.[12]Employers and employees (and their companions) should make every effort to attend the meeting. At the meeting the employer should explain the complaint against the employee and go through the evidence that has been gathered. The employee should be allowed to set out their case and answer any allegations that have been made. The employee should also be given a reasonable opportunity to ask questions, present evidence and call relevant witnesses. They should also be given an opportunity to raise points about any information provided by witnesses. Where an employer or employee intends to call relevant witnesses they should give advance notice that they intend to do this.[13]Workers have a statutory right to be accompanied by a companion where the disciplinary meeting could result in:• a formal warning being issued; or• the taking of some other disciplinary action; or• the confirmation of a warning or some other disciplinary action (appeal hearings). 26. The appeal should be dealt with impartially and wherever possible, by a manager who has not previously been involved in the case. - 10 - 27. Workers have a statutory right to be accompanied at appeal hearings. 28. Employees should be informed in writing of the results of the appeal hearing as soon as possible. 29. Where disciplinary action is being considered against an employee who is a trade union representative the normal disciplinary procedure should be followed. Depending on the circumstances, however, it is advisable to discuss the matter at an early stage with an official employed by the union, after obtaining the employee’s agreement. 6.6 If the employee is in repudiatory breach of contract, the employer may affirm the contract or the employer may accept the breach and treat the contract as terminated. In the latter case, the employee will be summarily dismissed. If the employee's breach is repudiatory, and it is accepted by the respondent, the employee will have no right to payment for his or her notice period. 6.7 In order to amount to a repudiatory breach, the employee’s behaviour must disclose a deliberate intention to disregard the essential requirements of the contract Laws v London Chronicle (Indicator Newspapers) Ltd 1959 1WLR 698, CA. 6.8 The degree of misconduct necessary for the employee’s behaviour to amount to a repudiatory breach is a question of fact for the court or tribunal to decide. In Briscoe v Lubrizol Ltd 2002 IRLR 607 the Court of Appeal approved the test set out in Neary and another v Dean of Westminster 1999 IRLR 288, ECJ where the special Commissioner asserted that the conduct "must so undermine the trust and confidence which is inherent in the particular contract of employment that the [employer] should no longer be required to retain the [employee] in his employment.” There are no hard and fast rules. Many factors may be relevant. It may be appropriate to consider the nature of employment and the employee’s past conduct. It may be relevant to consider the terms of the employee's contract and whether certain matters are set out as justifying summary dismissal. General circumstances, including provocation, may be relevant. It may be appropriate to consider whether there has been a deliberate refusal to obey a lawful and reasonable instruction. Clearly, dishonesty, serious negligence, and willful disobedience may justify summary dismissal, but these are examples of the potential circumstances, and each case must be considered on its facts. 6.9 If it is alleged the respondent affirmed the contract, it may be appropriate to look at the full circumstances. The nature of any affirmation in the circumstances surrounding it may need to be consider 6.10 The Employment Act 2002 section 38 provides:(1) This section applies to proceedings before an employment tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule 5. - 11 -(2) If in the case of proceedings to which this section applies-- (a) the employment tribunal finds in favour of the employee, but makes no award to him in respect of the claim to which the proceedings relate, and (b) when the proceedings were begun the employer was in breach of his duty to the employee under section 1(1) or 4(1) of the Employment Rights Act 1996 (c 18) (duty to give a written statement of initial employment particulars or of particulars of change), the tribunal must, subject to subsection (5), make an award of the minimum amount to be paid by the employer to the employee and may, if it considers it just and equitable in all the circumstances, award the higher amount instead. 6.11 Section 92 Employment Rights Act 1996 provides that an employee may request a written statement of reasons for dismissal in certain circumstances. Section 93 Employment Rights Act 1996 provides that a complaint may be made if the reason “given in purported compliance ... are inadequate or untrue.” Conclusions7.1 I first consider the unfair dismissal claim.7.2 Has the respondent established the sole or principal reason for dismissal? The reason for dismissal “is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee.” 1 It is the respondent's case that Mr Ural Hassan took the decision to dismiss. His reason is that, on or about 11 September 2020, he discovered the photograph in the info inbox when searching for another document. As a result, he asked the claimant to attend a disciplinary hearing. He asked the claimant about the photograph and received a shrug by the way of explanation. He took this to mean that the claimant accepted that it was a true picture. He noted the claimant was wearing a Poppies T-shirt. The photograph appeared to be outside a Poppies restaurant and appeared to be related to the claimant's position as an employee. I accept that he believed all those matters. The fact of that belief has not been challenged.7.3 It is the claimant's case that he was simply told that Mr Ural Hassan no longer wish to work with him. The claimant may have been told that, but I accept that the trigger for Mr Ural Hassan's action on 14 September 2020 was the photograph. I therefore accept the respondent has established the sole or principal reason. It related to conduct.7.4 I must consider whether there were grounds to support the belief, and if so, when the belief was formed based on those grounds, had there been a reasonable investigation, being one which was open to a reasonable employer. 1 Abernethy v Mott, Hay and Anderson [1974] ICR 323 - 12 -7.5 Ultimately, when considering the reasonableness of the decision to dismiss, it is necessary to consider all of the relevant factors and to apply the wording of section 98(4) Employment Rights Act 1996. A reasonable investigation may not only be relevant to establishing the grounds relevant to the belief, but it may also be equally relevant to whether dismissal is within the band of reasonable responses.7.6 I raised with the parties the ACAS code of practice on discipline and grievance procedures 2015 and in particular I drew the parties’ attention to paragraph 4, 5, 9, 11, 12, 13, and 26 – 29.7.7 The conduct in question goes back to 2016. The codes suggests an employer should deal with the issue promptly. The respondent knew about the photograph in 2016. However, there is no evidence of investigation at the time. When the matter came to Mr Ural Hassan's attention, in September 2020, it was still necessary to investigate.7.8 Mr Ural Hassan was aware that the email had been sent in 2016 and had been opened. He was on notice that someone may have considered it. He took no steps to ascertain if anyone had seen the email or considered it in 2016.7.9 His investigation consisted of exploring the web site of the person who had sent the photograph. The result of that investigation was never communicated to the claimant. Other that the perusal of the website, he took no other steps to ascertain the relevant circumstances, prior to the disciplinary hearing.7.10 The investigation that did take place was extremely limited and failed to consider what action, if any, had been taken in 2016 and, if no action had been taken, why no action was taken.7.11 Further, he took no steps to delegate the investigation to any other individual, but instead decided to investigate the matter and conduct the disciplinary himself.7.12 No steps were taken to inform the claimant of the alleged misconduct, or to seek an explanation from the claimant prior to the disciplinary hearing.7.13 Sometime after 11 September 2020, prior to the hearing, Mr Ural Hassan decided to hold a disciplinary hearing. At no time did he notify the claimant of the nature of the allegation. Paragraph 9 of the ACAS code suggests best practice is that there should be a notification in writing. The purpose of notifying an employee of the alleged misconduct is to allow that employee to prepare to answer the case at a disciplinary meeting. The employee should normally have copies of the written evidence. There was a total failure to give written notification. To the extent the claimant was told anything in the conversation prior to the meeting, it was insufficient to allow him to prepare adequately for the hearing. - 13 -7.14 It is fair to say the meeting was held without delay after 11 September 2020. However, given the facts had been known by the respondent since 2016, there was considerable delay in that respect.7.15 Even on Mr Ural Hassan's best evidence, the meeting was brief. It went little further than the claimant been shown the photograph, and being asked for an explanation about whether it was a true photograph. There was no further questioning after the claimant shrugged.7.16 Viewed one way, it may be said that the facts were clear, and there was nothing further to say. However, the purpose of forewarning an employee is to allow the employee to prepare adequately. When an allegation is, essentially, raised at the disciplinary hearing itself, is not surprising that the explanation is limited.7.17 The respondent failed to inform the claimant of his right to be accompanied. Being accompanied to a disciplinary hearing is an important safeguard. Disciplinary hearings are likely to be stressful. Having a companion may ease that stress and help the employee put forward explanations or mitigation.7.18 At the disciplinary meeting, the claimant was dismissed without notice. He was given no letter of dismissal. He was given no right of appeal. Whilst I accept the claimant knew, in principle, he could appeal, the respondent should recognise that in circumstances where there is no investigation, the allegations had not been put in writing, and the disciplinary hearing itself had been cursory, it is unlikely that an employee, who is not informed of the right of appeal, would have continuing confidence in the process. Moreover, the claimant was dismissed by the most senior person in the company. There can be no criticism of the claimant for not appealing.7.19 I find that the investigation was inadequate in the sense that it was not one open to a reasonable employer acting reasonably. I do not accept the respondent's assertion that the only matter to be considered was whether the claimant had exposed his penis and allowed the photograph to be taken. At the very least, it was necessary to consider if there had been any consideration of the photograph in 2016 and if not, why not. If there had been consideration, it was necessary to ascertain why no action had been taken then. That would be material to the fairness of the decision and a consideration of whether dismissal was in the band of reasonable responses.7.20 In the circumstances, this was not an investigation open to a reasonable employer.7.21 Further, in this case there are serious shortcomings in the procedure adopted. I do not accept the respondent's contention that it is a small employer. There has been reference to a human resources function. The respondent purported to have a sophisticated handbook. There are layers - 14 - of management. Pre-pandemic there were one hundred fifty members of staff. The company had a significant turnover. It has recently declared a one year dividend of £1.8 million. There were significant shortcomings in the investigation. There was a failure to tell the claimant adequately or at all what the allegation was. He was not told of his right to bring a companion to the hearing. The hearing itself was abrupt and inadequate. He was given no right of appeal.7.22 I find that respondent acted unreasonably in treating this conduct as sufficient reason for dismissing.7.23 The wages claim has been withdrawn and I dismiss it.7.24 I find the claimant was entitled to receive accrued holiday pay on termination of employment. The holiday year started on 1 April. He took no holiday during the year. He was dismissed 14 September 2020. I must apply regulation 14.7.25 The period of leave to which the worker is entitled was 28 days.7.26 The proportion of the leave year which expire before the termination date was 167/365 the period of leave taken is nil.7.27 The claimant is therefore entitled to 167/365 x 28 = 12.81 days at the relevant rate. However, I do not have the evidence to find the rate. The parties are invited to agree the rate, if that is not possible they will need to plead their respective positions, so the matter can be resolved in a remedy hearing.7.28 The claimant alleged wrongful dismissal. It is arguable that the claimant's action in 2016 related to his employment, as it appears that he was delivering takeaways at the time. The argument with the resident was largely about parking which related to the business use. The action of the claimant in showing his penis was possibly a fundamental breach of contract, although this is far from certain. It is not a matter I need to resolve given my findings on affirmation.7.29 The matter came to the respondent's attention in 2016. I found that relevant managers saw the document and took no action at the time. They allowed the claimant to continue working in the knowledge of what he had done. In the circumstances, they affirmed the contract. By affirming the contract, they lost the right to terminate his contract without notice. The claim of wrongful dismissal succeeds. I invite the parties to agree damages. If they do not agree the damages, they must plead their respective positions and deal with the damages at a remedy hearing.7.30 I have considered the respondent's written statement of particulars of the reason for dismissal. The letter is brief and informal. However, I am satisfied that it refers to the photograph and sufficiently and identifies the - 15 - essence of the alleged misconduct. It is compliant in my view with section 93. This claim fails.7.31 The claimant was not issued with a contract of employment. I am satisfied that he did receive notification of change the terms of employment when furloughed which dealt with his change in his pay, this notice complied with section 4(1) Employment Rights Act 1996. However, that notice did not deal with all the relevant section 1 particulars. I find that at the time he was dismissed, the respondent was in breach of its duty pursuant to section 1(1), by not supplying all relevant particulars. Pursuant to section 38(2) Employment Act 2002, I must make an award of at least the minimum amount and I may make a higher award if I considered just and equitable in all the circumstances. I need not make an award if there are exceptional circumstances.7.32 I received no argument to suggest there are exceptional circumstances. It is arguable that the question whether it is just and equitable to award more than two weeks is a matter for remedy. I will therefore reserve this decision and deal with it at a remedy hearing, unless it can be agreed by the parties.7.33 Finally, I need to decide the application to amend.7.34 The claimant has applied to substitute Poppies (Camden) Limited as the respondent in this case. The claimant relies on rule 34 Employment Tribunals Rules of Procedure 2013. I may add a substitute the respondent at any time. I may do so where it appears that there are issues between that person and any of the existing parties falling within the jurisdiction of the tribunal which it is in the interests of justice to have determined in the proceedings. I may remove any party apparently wrongly included.7.35 The respondent objects to the substitution.7.36 I have considered all the representations made by the parties after the hearing, including those which were not invited concerning the CPR procedure.7.37 The ACAS certificate identifies Poppies Fish and Chips Limited. There is no suggestion this caused confusion or that the respondent was denied the ability to conciliate the dispute. The claimant was then constrained to issue against the entity on the certificate.7.38 The difficulty in identifying the correct title of the respondent has caused no practical difficulty in this case. In no sense whatsoever has the respondent been disadvantaged in its ability to advance a defence.7.39 It is unfortunate that the claimant has failed to heed the respondent's representations as to the correct employer. I have no reliable evidence explaining why the claimant was confused, other than the finding that he - 16 - did not receive a contract of employment. Even so, there is reference to the employer on the relevant tax documentation. I accept the claimant is not without fault in failing to either identify the correct employer, or to deal with the matter earlier. However, the respondent is not without fault. There is scope for confusion, particularly given the failure to provide a section 1 statement or to confirm the change in the identity of the employer. It follows that the action of the respondent has caused potential confusion. I accept the claimant was genuinely confused and the respondent contributed to that uncertainty.7.40 To deny the substitution at this stage would be to prevent the claimant from having any remedy in claims which succeed on the merits. There is no hardship at all to the respondent. The respondent has never been confused about its obligations towards, or employment of, this claimant. The respondent has been able to prepare the case and to participate in full. To refuse the application would deny the claimant a remedy and would be a windfall for the respondent. It is in the interests of justice to allow the substitution. The respondent Poppies (Camden) Limited will be substituted as the sole respondent.
Introduction
[1]The liability decision was sent to the parties on 7 January 2022[2]The claims of unfair dismissal, wrongful dismissal, and failure to pay holiday accrued at the date of termination, all succeeded. The parties have not been able to reach agreement on remedy. The issues to be decided were considered at the commencement of the remedy hearing.[3]I was told the respondent is now in creditors’ voluntary liquidation. However, the company remains on the register and there is no reason why the remedy hearing cannot proceed. Evidence[4]The claimant relied on his original statement and the original bundle of documents. In addition, several additional documents were filed, and I will refer to them if necessary. Mr Airey relied on a skeleton argument. The claimant gave oral evidence.[6]The respondent relied on the witness statements previously filed. The respondent did not call any further witness evidence, Mr Airey did not apply for the witnesses to be recalled. Much of the respondent's evidence on remedy was, therefore, untested[7]Both parties gave oral submissions. Both were asked to provide further written submissions by 09:00 on the second day. Concessions[8]There was some agreement, and some concessions were made. Wrongful dismissal[9]It was accepted that the claimant should receive payment for wrongful dismissal covering the period from dismissal on 14 September 2020 for 9 weeks until 16 November 2020. It was conceded for the purpose of the wrongful dismissal calculation that the claimant should be entitled to payment at the rate of pay which was applicable prior to any variation of contract for furlough.[10]It was agreed gross the sum is £18,088.74 and the agreed net sum was £10,800. There was no agreement as to whether the award should be - 2 - made gross or net. There was no agreement as to how grossing up should apply.[11]It follows the remaining dispute before the tribunal was limited, given the respondent’s concession. Holiday pay[12]At the liability hearing, the tribunal calculated the total number of holiday days accrued, but was unable to calculate the daily rate. The parties agreed the holiday pay (gross £5,149 net £3,074.40). At the commencement of the hearing, I confirmed that the correct sum payable is the gross amount, as it is essentially wages and subject to PAYE. No party disputed that interpretation and therefore the holiday pay will be paid gross. As it represents wages, it may be taxed in the usual way for PAYE purposes. No issue of grossing up can apply. It is not part of any termination payment and does not affect the £30,000 exemption. Unfair dismissal[13]It was agreed that the gross pay, prior to any variation of contract connected with furlough, was £2,009.86 per week with a net pay of £1,200.00 per week.[14]The calculation of the basic award was agreed. The claimant was 51 at the date of the dismissal. He is entitled to £7,263.00 (9 years x 1.5× £538 - maximum weekly wage). The respondent says it should be reduced zero as contributory fault should be set at 100%.[15]While first on furlough, the claimant received £1,754.86 net per month ( £404.97 net weekly). As from 1 August 2020, he was on a flexible furlough programme earning £2,444.52 net per month (£564.12 per week).[16]The claimant concedes that he has no ongoing loss after 15 November 2021, being one year after the end of the minimum notice period. He limits his claims to that one-year period. Pension[17]The pension loss calculation was not disputed. The respondent says it is not payable because the claimant had opted out.
The issues
[18]I considered what disputes remained to be resolved. Wrongful dismissal - 3 -[19]As the calculation was agreed, there is a question as to whether it should be ordered net or gross. This depends on its treatment for the purpose of tax. Unfair dismissal[20]The respondent alleges the claimant contributed to his dismissal. If so, should either or both the basic and compensatory awards be adjusted, and if so, should the same reduction we made for each.[21]The calculation of the compensatory award is disputed and in particular the following points arise.[22]Is the claimant entitled pension loss? It is the respondent's position that the claimant contracted out of his pension rights in 2019, and no sum is payable. The claimant acknowledges that he was not paid pension from around August 2020 but alleges that he continued to have a right to receive pension contributions.[23]It being accepted that payment for loss of earnings should not commence until after the nominal period for notice, should compensation be based on the contract of employment, as varied, following the claimant’s agreement to be furloughed, or should the calculation be on the basis of his own prefurlough contract. Both parties rely on the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (the regulations), it being the respondent's case that the weekly wages is only relevant to calculation of the basic award, and it being the claimant's case that the weekly wage, as defined by the regulations, is applicable to the compensatory award.[24]In any event, when would the claimant have returned to work full-time, had he remained employed? It is the respondent's case he would have returned in the early summer of 2021. It is the claimant's case he would have returned no later than October 2020.[25]Did the claimant fail to mitigate his loss? It is the respondent's position that the claimant, by failing to apply for any employment, failed to mitigate his loss and he should have obtained alternative employment, at the same rate, by no later than six months post dismissal.[26]The respondent initially advanced a Polkey argument. The respondent's position was modified during closing submissions. The respondent now concedes that the claimant would not have been dismissed had a fair procedure been followed. This point was clarified during submissions and therefore the respondent now concedes that the claimant would not have been dismissed within a short period after the date of the dismissal, had a fair procedure been followed. The respondent also abandoned the arguments, initially advanced, that the claimant's employment would have been terminated no later than six months after the actual dismissal. It follows the respondent has not sought to advance any argument that his - 4 - employment would have ended either by a particular date or by reference to a percentage chance.[27]I noted the parties invite the tribunal to calculate any grossing up. The parties were invited to give further submissions. There are a number of difficulties. The claimant has given limited disclosure of his earnings. It is unclear what he will earn this financial year. It is necessary to estimate his yearly earnings when grossing up. It was unclear how the wrongful dismissal claim would be treated. If it were awarded gross, there is no further grossing up, but it may be subject to tax, and it is necessary to consider how that interacts with any damages which may qualify for termination payment exemption for the first £30,000. The parties were asked to clarify the position. I confirmed that the final decision may be released on a confidential basis to the parties for the purpose of the parties providing extra submissions on the calculation of a grossing up.[28]It is accepted that there should be a payment pursuant to section 38 Employment Act 2002 . The claimant alleges that there should be 4 weeks’ pay the respondent argues for 2 weeks. It is agreed that the maximum weekly wage of £538.00 should apply.[29]Both parties agree that there must be an uplift for breach of the ACAS code of practice. The claimant says the relevant uplift should be 25%. The respondent says it should be 10%. The respondent says it is limited to the wrongful dismissal and compensatory elements. Additional findings of fact[30]I have regard to all the facts already found. The further evidence is limited.[31]I am satisfied that the claimant's has failed to disclose material documentation. The claimant has claimed benefits. He stated he had received universal credit. The period was unclear. He has failed to provide any documentation in support.[32]On 10 November 2019, the claimant signed an opt out agreement. The opt out agreement concerned the 48-hour working week and was expressed as a workplace pension opt out. He agreed to opt out of the workplace pension. I find he signed it and understood it to be an opt out agreement. It does not specify the date from which the opt out will take place.[33]On 11 December 2020, the claimant became a director of Jack the Chipper Ltd (JTC). In addition, he was granted 100 shares, out of a total share issue of 300. He has received payment as an employee of JTC. He has disclosed limited information about the company and his connection with it. He has disclosed some payslips, the first from month 12, dated 24 March 2021, which demonstrates a salary of £1,000. The second was dated 30 April 2021 and shows salary entries totalling £2,000. - 5 - There are then further payslips of a salary of £1,000, albeit some deduct £500 for absence. The last payslip I have seen is from 31 October 2021, when the salary was £1000. I have seen no further payslips. The claimant gave no evidence about his current employment. No contract of employment, or any other document evidencing the agreement with JTC has been disclosed.[34]The claimant's evidence about his employment with JTC was unsatisfactory. He referred to receiving “pocket money" from the company of various amounts from £200 to £400. He later suggested that such payments were was part of the payments recorded in the wage slips. That evidence was unsatisfactory. I find on the balance of probability the claimant was receiving payments in addition to those disclosed in the wage slips; that is why he referred to miscellaneous receipts of “pocket money.” The claimant has disclosed no accounts, or other documents demonstrating the income and expenditure of JTC. Those documents would be relevant, and the failure to disclose them is a material failure. I note it may be argued that some or all of the documents evidencing the financial position of JTC were subject to an application for specific disclosure, which was refused by EJ Burns, I understand on the basis of proportionality. The refusal of an application for specific discovery does not necessarily modify any obligation to provide relevant documents by way of normal disclosure. It should have been clear to the claimant and his representatives that all documents relevant to the financial position of JTC and the payments made to he claimant, should be produced.[35]The claimant has not explained why he limits his loss to one year after the notice period. He has not given evidence of his current earnings.
The law
[36]Section 38 Employment Act 2002 provides, in so far as it is applicable - (1) This section applies to proceedings before an employment tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule 5. … (3) If in the case of proceedings to which this section applies-- (a) the employment tribunal makes an award to the employee in respect of the claim to which the proceedings relate, and (b) when the proceedings were begun the employer was in breach of his duty to the employee under section 1(1) or 4(1) of the Employment Rights Act 1996, 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. (4) In subsections (2) and (3)- - 6 - (a) references to the minimum amount are to an amount equal to two weeks' pay, and (b) references to the higher amount are to an amount equal to four weeks' pay. (5) The duty under subsection (2) or (3) does not apply if there are exceptional circumstances which would make an award or increase under that subsection unjust or inequitable. (6) The amount of a week's pay of an employee shall-- (a) be calculated for the purposes of this section in accordance with Chapter 2 of Part 14 of the Employment Rights Act 1996 (c 18), and (b) not exceed the amount for the time being specified in section 227 of that Act (maximum amount of week's pay). …[37]The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 provides, in so far as it is applicable - Interpretation 2.—(1) In these Regulations— “the Act” means the Employment Rights Act 1996;“Coronavirus Job Retention Scheme” means the scheme of that name established by the first CJRS Direction, as modified by the second CJRS Direction and the third CJRS Direction(1); ... “the relevant date”, in relation to E—(a) means the calculation date(4), in any case where— (i)E’s working hours under their contract of employment changed, on or after the date on which E became furloughed but before the calculation date, and (ii)at the time that change was made, its contractual effect was that the change in working hours was to continue when E ceased to be furloughed or flexibly-furloughed, and (b)in any other case, means the date immediately before the date on which E became furloughed; ... (2) Except in this paragraph and paragraph (1), any reference in these Regulations to an employee who is, or has been, “furloughed” is to an employee who is, or has been, a furloughed employee or a flexibly- furloughed employee. Calculation of a week’s pay in relation to furloughed employees 3.—(1) These Regulations prescribe the manner in which the amount of a week’s pay(1) is to be calculated in the case of an employee who is, or has been, furloughed (“E”), subject to paragraph (2), where— ...(b) E is entitled to payment pursuant to section 88 or 89 of the Act as a result of a notice to terminate E’s contract of employment given on or after the date on which E became furloughed, for the calculation of that payment under Part 9 of the Act, ... (e) E is entitled to an award of compensation for unfair dismissal calculated in accordance with sections 118 to 126 of the Act, and the notice to terminate E’s contract of employment was given or (if the dismissal was - 7 - without notice) the date of termination was on or after the date on which E became furloughed, for the calculation of that award under Part 10 of the Act, ... (2) These Regulations only apply— (a)in a case where regulation 4 applies, where the calculation date is on or before 31st October 2020(2), (b)in a case where regulation 5, 6 or 8 applies, where the relevant period, within the meaning given in regulation 5, 6 or 8 (as the case may be), includes a week when E was furloughed. (3) For the purposes of paragraph (1), “the date of termination” means the date on which termination of E’s contract of employment takes effect. 4 (1) This regulation applies where E’s remuneration fell within the description in section 221(2) of the Act (remuneration for employment in normal working hours which does not vary with the amount of work done) on the relevant date. (2) The amount of a week’s pay is the amount which is payable by the employer under E’s contract of employment in force on the calculation date if E works throughout E’s normal working hours in a week, and for these purposes— (a)E’s normal working hours, in relation to any period during which E is furloughed, include E’s furloughed hours, and (b)the amount which is payable, in relation to any period during which E is furloughed, is to be calculated disregarding any reduction in the amount payable as a result of E being furloughed.[38]Section 123 Employment Rights Act 1996 provides, in so far as it is applicable –(1) Subject to the provisions of this section and sections 124 [, 124A and 126] the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.(2) The loss referred to in subsection (1) shall be taken to include-- (a) any expenses reasonably incurred by the complainant in consequence of the dismissal, and (b) subject to subsection (3), loss of any benefit which he might reasonably be expected to have had but for the dismissal. … (4) In ascertaining the loss referred to in subsection (1) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales or (as the case may be) Scotland. … (6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall - 8 - reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. …[39]Section 207A Trade Union and Labour Relations Consolidation Act 1992 provides, in so far as it is applicable -(1) This section applies to proceedings before an employment tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule A2.(2) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that-- (a) the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies, (b) the employer has failed to comply with that Code in relation to that matter, and (c) that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25%. … (4) In subsections (2) and (3), "relevant Code of Practice" means a Code of Practice issued under this Chapter which relates exclusively or primarily to procedure for the resolution of disputes. (5) Where an award falls to be adjusted under this section and under section 38 of the Employment Act 2002, the adjustment under this section shall be made before the adjustment under that section. … Conclusions Section 38 EA 2002
Conclusions
[40]The claimant is entitled to an award under section 38 EA 2002. We may make an award of the minimum amount (two weeks’ pay) or a higher amount (equal to 4 weeks’ pay). The award is subject to the statutory cap and it forms part of the compensatory award for unfair dismissal (section 38(3) Employment Act 2002). There is discretion. The tribunal may make the award it considers a just and equitable. The claimant's submission says that the failure to provide a written contract caused "scope for confusion as to who the correct respondent was." However, the correct respondent was identified at the hearing, albeit the claimant was unwilling to accept the position. I do not accept any material confusion was caused by the failure to provide the relevant statement of terms. It is not in my view just and equitable to give a higher award. Two weeks will be used in the calculation of the compensatory award. The Employment Rights Act 1996 (Coronavirus, Calculation of a Weeks Pay) Regulations 2020 (the regulations) - 9 -[41]It is common ground that the regulations apply. As at the date of the dismissal, the claimant was on flexible furlough. The parties agreed that for the purpose of calculating a week's pay, as referred to at 221 Employment Rights Act 1996 the correct rate payable is set out in the contract prior to furlough (see reg. 2). His gross weekly pay was £2,009.86, with a net weekly pay of £1,200. Whilst on furlough, his average net monthly pay was £1,754.86 (£404.97 per week), being £2,500 per month (gross). In the two months prior to his dismissal, when he returned to work part-time, the average was £2,444.52 net per month.[42]It is accepted that the contractual rate must be used for the purpose of notice pay and the basic award. Given the concession by the parties, I have not made specifc findings on the relationship between the wrongful dismissal and the right to minimum notice pay pursuant to section 86 Employment Rights Act 1996.1[43]The maximum applicable weekly wage, for the purposes of section 227 Employment Rights Act 1996 at the effective date of termination was £538.[44]The claimant submits that loss of earnings, as a head of compensation when calculating the section 123 compensatory award, should be assessed using the weekly wage, and compensation should be awarded on the basis of a week’s pay as defined by the regulations (i.e., the original contractual amount). It would follow that any calculation of loss of earnings would be based on the original contractual rate and not on the wages being received during the period of flexible furlough.[45]The respondent submits the weekly wage is a statutory construct for limited purposes and is irrelevant to the calculation of just and equitable compensation pursuant to section 123 Employment Rights Act 1996.[46]It is the claimant's submission that regulation 3(1)(e) prescribes the amount of a weeks’ pay when the claimant is entitled to an award of compensation "for unfair dismissal calculated in accordance with section 118 - 126 of the act." The effect is that when calculating loss under section 123, the tribunal is constrained to use the ‘weekly wage’ rather than he actual payment that may have been received whilst on furlough.[47]The respondent says a week’s pay, as defined by the Employment Rights Act 1996, is for limited purposes, including the calculation of the basic award. However, it has no relevance to the compensatory award. 1 Section 86 Employment Rights Act 1996 provides for a minimum notice period. Section 88 confirms liability to pay which is based upon a week’s pay. Regulation 3(1)(b) of the regulations specifically includes sections 88 and 89. It is accepted the claimant is entitled to the statutory minimum notice period and that it must be calculated in accordance with the weekly wage. For these purposes it is not capped. The parties accept that wrongful dismissal claim must be calculated in accordance with this. - 10 -[48]I find the respondent is right. The general position is a tribunal is required to calculate the basic award in the light of the statutory week's pay, but this does not apply to the compensatory award. This is illustrated by the case of Toni & Guy (St Paul's) Ltd v Georgiou [2013] ICR 1356, EAT. In that case, where the employer had artificially reduced the claimant's pay level in the run-up to the dismissal, that lower pay had to be used for calculating the basic award, but the tribunal could consider what he should have been paid when calculating the compensatory award. I find there is nothing in the regulations which requires use of the weekly wage when deciding just and equitable compensation pursuant to section 123. Contributory fault[49]In considering contributory fault, I have regard to the guidance given by Langstaff P in Steen v ASP Packaging Ltd [2014] ICR 56, EAT. He suggested four questions —(1) what was the conduct in question?(2) was it blameworthy?(3) (in relation to the compensatory award) did it cause or contribute to the dismissal?(4) to what extent should the award be reduced?[50]I dealt with the reason for dismissal at paragraphs 7.2 - 7.3 of the liability decision as follows: 7.2 Has the respondent established the sole or principal reason for dismissal? The reason for dismissal “is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee.” It is the respondent's case that Mr Ural Hassan took the decision to dismiss. His reason is that, on or about 11 September 2020, he discovered the photograph in the info inbox when searching for another document. As a result, he asked the claimant to attend a disciplinary hearing. He asked the claimant about the photograph and received a shrug by the way of explanation. He took this to mean that the claimant accepted that it was a true picture. He noted the claimant was wearing a Poppies T- shirt. The photograph appeared to be outside a Poppies restaurant and appeared to be related to the claimant's position as an employee. I accept that he believed all those matters. The fact of that belief has not been challenged. 7.3 It is the claimant's case that he was simply told that Mr Ural Hassan no longer wish to work with him. The claimant may have been told that, but I accept that the trigger for Mr Ural Hassan's action on 14 September 2020 was the photograph. I therefore accept the respondent has established the sole or principal reason. It related to conduct.[51]The claimant submits that there should be no reduction for contributory fault for two reasons. First, the respondent affirmed the contract for the purposes of wrongful dismissal. Second, it is alleged the tribunal found "that it was unreasonable to treat conduct as sufficient reason for dismissing." In oral submissions, it was alleged that the dismissals were outside the range of reasonable responses. - 11 -[52]The respondent states damages should be reduced by 100%. It submits the tribunal is not constrained when evaluating culpability by the employer's view of the wrongness of the conduct.[53]I should note that the assessment may not be the same for the basic and the compensatory award. In in the case of the compensatory award, there must be a finding the conduct contributed to the dismissal.[54]What was the relevant conduct? In this case, the relevant conduct was the claimant, in anger, exposing penis to a member of the public. At the time he did this, the claimant knew that he was representing the respondent. His reaction was because of the individual's complaints about the actions of the respondent.[55]Was his conduct blameworthy? I made the following finding at paragraph 5.8 of the liability decision - 5.8 The resident had concerns and grievances about parking in Camden. In particular, it appears he alleged that employees, and possibly customers, of Poppies were given preferential treatment and parking fines were not imposed. Whatever his motivation, he would interact regularly with the claimant and raise his concerns. This led to a degree of friction. The resident would photograph the claimant. On one occasion, when the claimant was undertaking deliveries, he was feeling stressed. This led to him reacting negatively to the resident. The claimant lowered his trousers and exposed his penis. He did so out of anger; it was a lewd gesture demonstrating annoyance or contempt. The resident took a picture.[56]Exposing his penis was a lewd gesture arising out of anger and showed contempt. The claimant knew what he was doing. It was blameworthy.[57]Did the conduct contribute to or cause the dismissal? At the liability hearing, the claimant did seek to challenge the respondent reason. His evidence was rejected. I found, as a fact, that the sole or principal reason for dismissal was the lewd gesture as captured by the member of public in the photograph. It was Mr Hassan's belief that the behaviour had occurred. This directly led to the dismissal. It follows that the blameworthy behaviour was the sole or principal reason for dismissal; it clearly contributed.[58]To what extent should the award be reduced. In this, I have a broad discretion. I reject the claimant's submissions. When a contract is affirmed for the purposes of wrongful dismissal, the employer may lose the right to dismiss the claimant by treating the breach as repudiatory. However, that will not necessarily lead to finding that any subsequent dismissal was outside the band of reasonable responses.[59]I did not find that dismissing the claimant for the alleged conduct was necessarily outside the band of reasonable responses. My decision was more nuanced. It appears there must have been consideration by management when the photo was first received in around 2016. Mr Hassan took no steps to check the position. No reasonable employer - 12 - would have failed to check. That led to the dismissal being outside the band of reasonable responses.[60]The claimant was in a position of authority and responsibility. He assaulted a member of the public by exposing his penis. It was potentially a criminal act. The claimant should have understood such behaviour would not be acceptable to his employer. The conduct took place in the course of his employment. It is unclear why no action was taken against the claimant in 2016. I simply have no detail. I have accepted it was not brought to Mr Hassan's attention. Given the claimant's position and seniority in the organisation, if there had been a proper investigation in 2006, which had established the facts, I cannot say that the dismissal would have been outside the band of reasonable responses. When he was subsequently dismissed, the conduct itself, despite the delay, might have been within the band of reasonable responses. This may have depended on any investigation into what happened in 2016, and any findings as to the reason for delay. For example, it is possible that there was some deliberate attempt to prevent the information coming to Mr Hassan’s knowledge. I simply do not know. It follows that I cannot rule out the possibility that dismissal would have been within the band of reasonable responses had a fair procedure been adopted. I do not accept the submission that I found dismissing for the conduct was, in itself, inevitably outside the band of reasonable responses.[61]I have dealt with the above point at some length because it forms part of the claimant’s submission. Contributory fault is not determined by what view the respondent took or whether the dismissal was fair or even how far it caused the dismissal. It is necessary for me to make my own assessment about the serious of the conduct as an exercise of discretion when deciding what is just and equitable. I must reduce compensation by the proportion I consider just and equitable having regard to my finding as to whether the conduct caused or contributed to the dismissal. For the reasons I have given, I find this was serious misconduct and it was seriously blameworthy. It was entirely inconsistent with the claimant’s position of responsibility. I consider the right reduction to be 80%.[62]There is no good reason to have different deductions for the basic and compensatory was. Both will be reduced by 80%. The ACAS uplift[63]It is agreed that the increase applies to wrongful dismissal claim and compensatory award. Pursuant to section 207A, I may increase the award by 25%. I have regard to Allma Construction Ltd v Laing UKEATS/0041/11. Lady Smith suggested that a tribunal should approach an uplift systematically and consider the following areas: what is the relevant code; what was the failure to comply with the code; what was the reason for failure; is it just and equitable to increase the award, and if so why; and what is the amount, and why? - 13 -[64]Similar guidance was given by Griffiths J in Slade v Biggs [2022] IRLR 216, EAT. It was emphasised that the circumstances may include overlap with other awards. I should also have regard to the total value of the claim. The award should not be disproportionate.[65]At the liability hearing I drew the parties’ attention to the ACAS code of practice and in particular paragraphs 4, 5, 9, 11, 12, 13, and 26 – 29. The claimant’s closing submissions do not expressly address the relevant breaches.[66]There were breaches of the ACAS code. I accept that the conduct was not raised promptly with the claimant (paragraph 5). Necessary investigations were not carried out (paragraph 5). There was a failure to adequately inform the claimant prior to the disciplinary interview (paragraph 9). I do not accept the claimant was not given an opportunity to put his case, albeit I considered his opportunity to be limited (paragraph 12). He was not properly informed of his right to have someone present at the meeting (paragraph 13). He was not adequately informed of his right to appeal (paragraph 26).[67]However, the respondent’s failure was not total. The circumstances of misconduct were straightforward, even if old. They were raised with the claimant. He had an opportunity to comment. The procedure was inadequate, but it was not totally lacking. There was ignorance of the appropriate procedure, and there was a degree of informality in the respondent's management. It is clear Mr Hassan thought the circumstances spoke for themselves. He was not seeking to wholly circumvent due process.[68]I consider that it is just and equitable to increase the award; however, the failure, in context, did not prevent the claimant from putting forward an explanation, and in the circumstances, I find the correct figure is 10%. The losses[69]The claimant seeks loss of wages after the nominal end of his notice period. I have extremely limited evidence as to what would have happened to the claimant. Both parties have given limited evidence as to how the business was affected during lockdown. The respondent notes that there was a short reprieve in December, but lockdown continued in January 2021. It was not until 17 May 2020 that the majority of the indoor and outdoor economies opened. By summer 2021, normal business had largely resumed.[70]There is a letter in the bundle dated 15 December 2020 addressed "to whom it may concern". It refers to the claimant and purports to say "I'm writing to inform you that the above employees furlough scheme will end on the end of March 2020 and he will start to work for our restaurant as area manager on 1 April 2021." The rate of pay is said to be £4,200 - 14 - monthly. I have received very limited evidence on this. It has been suggested that the claimant forged the letter. The respondent denies writing it. The letter is nonsensical. The claimant was not an employee on 15 December 2020. It makes no sense for the respondent to draft it. On the balance of probability, it reflects no agreement between the parties. It does not reflect any intention on the part of the respondent. It therefore tells me nothing about when the claimant would have returned.[71]I have limited evidence. I find the claimant would have continued on enhanced furlough until the beginning of May 2021. Thereafter, he would have returned to his normal contractual pay.[72]Given the respondent's concession, I make no Polkey deduction.[73]I award £500 for loss of statutory rights.[74]I allow nothing for pension. The claimant had opted out of the pension. It is implicit that the pension opt out may be cancelled at any time after the agreement to opt out was signed. Pension payments ceased prior to dismissal, in accordance with the opt out agreement.[75]I find the claimant has sought to mitigate his loss by starting a new business. He was dismissed in a difficult time for seeking new employment. Obtaining paid employment would have been difficult. The claimant has limited his loss to one year, albeit he has not given full frank disclosure, I have accepted that period. The respondent has not proven failure to mitigate.[76]I find on the balance of probabilities the claimant has failed to disclose all earnings since he was dismissed. He has disclosed earnings of £8,457.28. However, given his answers in cross examination, and his references to small sums being paid by way of pocket money, I find on the balance of probabilities, that he has received additional sums. I do not accept the claimant has been entirely frank in his evidence. However, I do not know the exact amount he has received. I must make an award which I consider is just and equitable. Ultimately, such an award allows for some discretion. I am not constrained to follow strict causation of financial loss, particularly when the position is unclear because the claimant has not disclosed all his earnings. The claimant should not be allowed to benefit by misleading the tribunal. As I cannot fully calculate the earnings the claimant has received, I consider the best way to exercise my discretion is to allow losses for a period of 10 months of the 12-month period. Despite the uncertainty I am satisfied there has been a loss and I would not consider it appropriate to refuse to award any loss. I do however consider it just and equitable to deduct the full sum disclosed as earned, and to make a further allowance because of the failure to fully disclose earnings. Grossing-up - 15 -[77]In 2018/2019, there was a significant change to the tax regime governing termination payments. The revised legislation is found in ITEPA 2003 sections 402 – 404.[78]I should summarise the main applicable principles. It is necessary to identify the relevant termination award. The termination award is the amount received in connection with the termination of employment, but which is not otherwise chargeable to income tax. (Any sums otherwise chargeable to income tax are not part of the termination award.) Statutory redundancy payments (or equivalent contractual payments) are not part of the relevant termination award.[79]As for notice pay, where there is a relevant express or implied PILON, that payment is treated as earnings under ITEPA 2003, section 62. However, were notice pay was due, but not paid, the effect of the legislation is to designate a post-employment notice pay (PENP) which is then treated as earnings. This involves identifying the rate of basic pay and applying it for the post-employment notice period. The period ends on the day when the employment could have been lawfully terminated. That sum is taxable and does not qualify for the £30,000 tax exemption provided by section 403.[80]When there is a relevant termination award, which does not provide for payment for notice period, the PENP is calculated using the formula provided and it is deducted from the relevant termination payment it is then taxable. The balance of the termination payments (including any relevant redundancy payment) take advantage of the £30,000 exemption. In this case, the parties have calculated the relevant notice period. It has been awarded as a separate wrongful dismissal calculation. That some forms a PENP. It is taxable. In my view it must be awarded gross.[81]The basic award, and the remainder of the compensatory award, benefit from the £30,000 tax exemption. The order of deductions[82]It is necessary to consider the correct order of deductions. The basic approach, as set out in the Digital (No 2) [Court of Appeal ([1998] IRLR 134, is as follows:(1) Calculate the loss which the complainant has sustained in consequence of the dismissal, and insofar as the loss is attributable to action taken by the employer.(2) In assessing that loss, full credit should be given by the employee for all sums paid by the employer as compensation for the dismissal. This can include amounts paid by way of ex gratia payments or payments in lieu of notice (but excluding at this stage any enhanced redundancy payment to the extent that it exceeds the basic award (s 123(7)). - 16 - Sums earned by way of mitigation should also be deducted at this stage. So too should a deduction be made to reflect any failure upon the part of the employee to mitigate their loss.(3) Any Polkey reduction or any reduction for the chance that the employment would have ended anyway for a reason unknown to the employer at the time of the dismissal should then be made..(4) There should then be an increase or reduction as appropriate for failure by the employer or the employee to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures pursuant to s 207A of the Trade Union and Labour Relations Act 1992.(5) There may then be an adjustment of two weeks' or four weeks' pay in respect of any failure by the employer to provide a written statement of employment particulars pursuant to s 38 of the Employment Act 2002.(6) Any reduction for contributory fault is then made in relation to that loss as pursuant to ERA 1996 s 123(6).(7) From that sum it is necessary, pursuant to ERA 1996 s 123(7), to deduct any redundancy payment to the extent that it exceeds the basic award. Note that s 123(7) only applies to redundancy payments that are contractual or statutory. If there is not a genuine redundancy situation then the payment will be offset instead at stage (2).(8) The sum may then need to be grossed up for tax purposes. Consideration needs to be given to this where the award (inclusive of the basic award) is in excess of £30,000.[83]The awards made are set out in the schedule below. Calculation of unfair dismissal payments and other sums payable Start date - 11 March 2011 Effective date of termination - 14 September 2020 Years of service -nine Period of notice - nine weeks expiring 16 November 2020 Age at the effective date of termination - 51 Nominal period of loss for purposes of section 123 - 16 November 2020 – 15 November 2021 Gross contractual pay - £2009.86 (week) Net pay - £1,200 (week) Furlough pay - at date of dismissal - £2,445.52 net per month (£564.12 per week) - 17 - Subtotal Total Basic award Basic award 9 x 1.5 x £538 7,263.00 Contributory fault 80% 5,810.40 Net basic award £1,452.60 Compensatory award The net furlough rate of (£564.12) will apply to the period from 16 November 2022 - 3 May 2021 – 24 weeks (period one. The contractual rate of £1,200 will apply for a period of 3 May to 15 September 19.6 week period two. Period one 24 x £564.12£13,538.88 Period two 19.6 x £23,520.00£1,200.00 Subtotal £37,058.88 Loss of statutory rights £500 Less sums earned (mitigation) (£8,457.28) Polkey deduction Nil Sub total £29,101.60 ACAS uplift (207 page) £29,101.60 x £2,910.16 10% Section 38 increase 2 x capped £1,076 weekly wage (£538) Subtotal 33,087.76 Contributory fault at 80% (£26,470.20) Subtotal £6,617.56 Grossing up Excess not Nil above 30k TOTAL £6,617.56 Notice pay Notice pay 9 weeks £18,088.74 ACAS Uplift 10% £1,808.87 Total £19,897.61 Holiday Pay Agreed holiday pay £5,149.00 - 18 -