Mr Y Hao v SimuTec International Ltd: 2204317/2020
JUDGMENT
The Judgment of the Tribunal is that:(i) the Claimant’s claim for breach of contract (notice pay) succeeds;(ii) the Claimant’s claim for holiday pay succeeds;(iii) the Claimant’s claim for unpaid wages succeeds.(iv) The Respondent is ordered to pay the Claimant a total of £7,556 calculated as follows:a. £3,750 damages for breach of contract, failing to pay contractual notice (£45,000/12)b. £1,306 for holiday pay (see below)c. £2,500 for unpaid wages (£3,750-£2,500) x 2 N.B the above award is expressed as a gross figure. Provided that the Respondent makes appropriate deductions respect of income tax and national insurance and accounts therefore to the proper authorities payment of the Claimant of the net sum will represent a valid discharge of this judgment.REASONS
[1]By a claim presented on 17 July 2020 the Claimant bought a claim against the Respondent for unfair dismissal, a redundancy payment, notice pay, holiday pay and other payments. As the Claimant did not have one year’s service his claims for unfair dismissal and redundancy payment have been dismissed on withdrawal. The Respondent now accepts that the Claimant should have been paid for holiday accrued but not taken.[2]The Claimant worked for the Respondent from 19 January 2020 to 31st May 2020 as the General Manager. The Respondent operates a small chain of restaurants in London and Bromley and employs approximately 25 employees.[3]At the start of the hearing we had a discussion about the issues to be determined. The Respondent conceded that holiday pay was due although there was a small discrepancy in the parties’ calculations. As it has not yet been paid, I have calculated the amount due as £1305 in accordance with the formula in Regulation 14 of the Working Time Regulations 1998 as follows:a. 5.6 weeks x 14/52- 0 = 1.5 weeksb. 1.5 x £866 (Claimant’s weekly pay) = £1,306.[4]It was agreed that the remaining issues were:a. Was the Claimant entitled to one week or one month’s notice on termination? This was a purely factual dispute. It was the Claimant’s case that he was entitled to one month’s notice and that no notice had been given. It was the Respondent’s case that the Claimant was entitled to one week’s notice and that this had been given.b. Did the Claimant carry out work during periods of furlough? If so, should he have been paid his full salary by the Respondent rather than 80% through the coronavirus job retention scheme? It was the Claimant’s case that he was working while on furlough, while the Respondent’s case is that he was not. This was also factual dispute.[5]I had a witness statement from the Claimant and also from Ms Zhang, the director of the Respondent. We were assisted during the hearing by Ms Wang who translated for both the Claimant and Ms Zhang whenever they had difficulty in understanding a question or expressing themselves sufficiently clearly. I also had electronic file of documents running to 123 pages. Findings of relevant fact[6]The Claimant responded to an advertisement placed by Ms Zhang on 10 January 2020 for a Mandarin speaking restaurant manager. He was interviewed on 13 January 2020 and began employment on 19 January. At some point it was agreed that he would have the title of General Manager. No written documentation was produced, though a list of the Claimant’s duties appears in the advertisement. There was no offer letter and no written particulars of employment. The parties agree however that the Claimant’s starting salary was £35,000 per annum, and that after one month his salary was increased to £45,000 per annum. (His February pay slip shows an apportionment of salary to reflect that increase from the middle of February). Ms Zhang accepts that initially she was pleased with the Claimant’s work. The Claimant was required to work 6 days per week.[7]The Claimant says that he and Ms Zhang verbally agreed on his first day that if either party wished to terminate the contract, they would give each other one month’s notice. The Claimant accepted that there was to be a probation period, but he said that that period was to be one month and that, if he passed his probation, his salary would be increased to £45,000. He says that after a month she said he had passed his probation and his salary would be increased. He says he had asked for a contract but that this had never been forthcoming. He says he was dismissed in a phone call on 30th May effective immediately.[8]Ms Zhang on the other hand denies this and provides a different narrative. She says that on 13th February the Claimant had asked to meet her and had insisted on a salary of £45,000 and she had agreed. It was her evidence that in a lengthy meeting which took place on 25th February she repeated the formal terms of employment that had been set out at the interview on 13th January (paragraph 14 of her statement). These terms included a notice period of one week during the Claimant’s probation period and afterwards “a term agreed by both parties to avoid negative interruption to the business”. Amongst other terms of employment, they had also agreed “a salary of £35,000 pa for three months’ probation, may increase after first month’s probation review.” However, Ms Zhang’s own brief handwritten note of that meeting (34) does not refer either to notice or to probationary periods.[9]Ms Zhang further relies on a text message sent by the Claimant on 27th February in which he states, “This is my last day.” She says that this indicates that the Claimant was resigning and giving no notice to leave – which indicates that they had not agreed one month’s notice. The Claimant says that he was not giving notice but referring to the fact that he was not working next day.[10]It is not clear what the message means but I do not take it as being a resignation. The Claimant did not leave and continued to work at the Respondent. (There is no response from Ms Zhang to this message in the bundle.)[11]Ms Zhang says that the Claimant did not pass his three months probation and that on 8 April, in a long telephone conversation, she gave the Claimant notice of termination - but that when the Claimant said he would improve, she relented and told him that she would extend his probation period until the end of April. She says that at the end of April she gave him notice again and again she relented. She also says that at the end of April she asked him to return to work but that the Claimant refused to do so and said he wanted to remain furloughed until October. She says she wanted to dismiss the Claimant but that she could not terminate his contract until the end of May as he had a lot of the management documents which she needed. She therefore gave notice on 19th May that he should leave at the end of May. (She did not pay him full pay for the notice period but accepts that she should have done.) Ms Zhang also gave evidence that it was the Claimant’s job to provide written contracts for all the staff, including his own, and that while the Claimant had provided contracts for the other staff, he had refused to sign his contract.[12]On the balance of probabilities, I prefer the Claimant’s evidence. It was not disputed that the Claimant’s salary increased to £45,000 per annum after one month. This is consistent with the Claimant’s evidence that they agreed to increase his salary after a probation period of one month. Ms Zhang herself accepts that she was initially very pleased with the Claimant’s performance. While she accepts that the Claimant continued to be employed after 3 months (which is the probation period she says they had agreed), she also says that his probation period was extended because of the lockdown. As no other notice period was ever agreed, the Claimant’s notice period must be the statutory minimum of one week. However there was no evidence to support her case that there had been any discussion about probation after the first month.[13]The Claimant does not accept that he was given notice on 19th May. He says he was given notice over the phone on 30th May effective immediately.[14]I also do not accept that Ms Zhang told the Claimant that he should draft his own contract of employment and that he refused to sign a contract of employment. I accept the Claimant’s evidence that he enquired about his own contract and was told he would have to wait. Ms Zhang refers to a text message which she sent to the Claimant on 6th April (67) to evidence that that point the Claimant was still on probation. Amongst other things the text message complains about the Claimant’s failure to answer her phone calls and to provide reports “now we close more than 2 weeks, please send a detailed report for your 2 months job done. I will review your performance for the first 2 ½ months. I think we must do this review as soon as possible." There is, however, no reference in that text message to any probation. If the Claimant’s probation had been extended, and the review was intended to be a probationary review as Ms Zhang states, it seems unlikely that she would not have referred to that fact in this text.[15]I find that there was an oral agreement that the Claimant would be given one month’s notice. It is the employer’s responsibility to set out the terms of their employee’s contracts of employment in writing. If the parties had agreed terms at interview (reiterated on 25th February), as set out in paragraph 14 of her witness statement I find it odd that Ms Zhang did not set those terms out in writing whether by email or by text or by formal offer. The fact that she did not do so suggests that Ms Zhang was not focusing on the employment terms at interview. The parties accept that the Claimant was an experienced manager and it seems more likely that he would have raised the issue of notice, as he suggests, on his first day and a month was agreed.[16]I also prefer the Claimant’s evidence that he was only given notice on 30th May over the telephone and that he was not given notice on 19th May as Ms Zhang suggests. I note that the Claimant emailed a number of management documents to her on 14 April (75), so Ms Zhang’s evidence that dismissed him she could not dismiss him until the end of May because she did not have the management documents made little sense.[17]On 20th March 2020 the government announced a formal lockdown, and the Respondent’s restaurants were forced to close. The Claimant advised Ms Zhang about the furlough scheme. On 7th April the Respondent wrote to all its employees say that they were applying to join the furlough scheme for its employees, that all were to be designated as furloughed workers from 21st March 2020 and that if they agreed to the scheme they would be paid at 80% of their salary up to £2500 month gross per employee. The Claimant agreed to be placed on furlough.[18]The Claimant was clear at the hearing that he did not claim any payment for March. However, he says that while he did no or very little work during March, in April and May Ms Zhang expected him to, and he did, work. He says that she abused the furlough scheme and that he should therefore be paid his full salary, rather than at 80%. Ms Zhang denies that the Claimant did any work for her while it was on furlough.[19]On 1 April Ms Zhang sent an email to those staff working in the office which reads as follows: “The company does not have to keep everyone on the PAYE to claim the government benefit of 80% of the salaries. You are allowed by law and have to do some work if stay on the scheme.” Ms Zhang says this was sent very early on during lockdown and that she did not understand how the furlough scheme worked at that stage. It is a poor explanation for what appears to be a clear statement, but nonetheless the text messages sent by Ms Zhang and produced by the Claimant indicated that she expected him to produce work whilst on furlough.[20]The Claimant has produced a number of text messages passing between her and him from which it is evident that the Claimant was in fact expected to do a considerable amount of work for the Respondent despite being on furlough. Ms Zhang says that these text messages are messages requiring the Claimant to send to her the product of work which he had done before lockdown – and that she was not requiring him to do new work – she is just asking him to forward to her work that has already been done and which he had failed to send her in a timely fashion. I do not accept that. The text messages plainly evidence that Ms Zhang is expecting the Claimant to do work for the benefit of the business. On 6th April “please send a detailed report of your two months job done”. While Ms Zhang may have felt that this was work which should have been done sooner the text messages indicate that the Claimant did the work, and was expected to do the work while on furlough. On 14th April there are email exchanges about the benefits of switching the Respondent’s broadband provider. In May the Claimant is contacting staff about the possibility of their returning to work, looking at repairing the ovens and negotiating with Deliveroo about take away deliveries.[21]While I accept that the restaurants were shut and that the Claimant was unable to carry out a significant part of his duties, much of his work was to produce policies and procedures and to deal with general administration. I find that Ms Zhang expected the Claimant to undertake this work while on furlough and that he did do so; and consequently the Respondent was in breach of the coronavirus Regulations. Flexible furlough was not introduced until 1 July 2020 by which time the Claimant had left her employment.[22]Technically therefore the Respondent was not entitled to the furlough grant in respect of the Claimant. However, that is a matter between the Respondent and the Treasury. The Claimant is not entitled to any element of double recovery. Accordingly, I find that the Respondent is due to pay the Claimant the difference between the 80% he received and his full salary for April and May 2020.