Mr M A Riestra Fuertes v Line Management Group Ltd: 2207711/2020
JUDGMENT
[1]The claim for unfair dismissal is not well founded and it does not succeed.[2]The application by the claimant to amend his claim to include a claim for a statutory redundancy payment under section 148 of the Employment Rights Act 1996 is granted. However the claim fails as section 150(3) was not complied with.[3]All other claims are dismissed upon withdrawal.REASONS
[1]The claimant brings a claim for constructive unfair dismissal. In his claim form he referred to claims for other payments but he confirmed at the start of the hearing that these had been sorted out in discussions over his final payslip and that he did not pursue any of them. I heard evidence from him and from Ms Tayler Lee, Human Resources Advisor for the respondent.[2]The facts I have found and the conclusions I have drawn from them are as follows.[3]The claimant started work for the respondent on 14 November 2016 as an AV Project Engineer. He signed a written contract of employment. A provision in the contract allowed the company to place him on short time work or to lay him off if they were unable to provide full time work for their employees (page 36 of bundle).[4]The short time working clause was invoked on 30 March 2020 at the start of the COVID pandemic.[5]The Government’s CJRS scheme (‘the furlough scheme’) then came into place. The respondent gave the claimant notice that from 6 April 2020 he would be classed as a furlough worker. He was not asked to consent. He was told he would receive 80% of his pay capped at £2500 per month.[6]Mr Price confirmed that it was the respondent’s position that the claimant had been laid off in accordance with the contractual provision in his contract as well as being placed on the furlough scheme.[7]On 3 April the claimant asked whether the respondent would top up his pay to 100% but this was refused the same day. Ms Lee’s evidence which I accept was that the company wished to retain its workforce. The respondent took the view that all staff would be treated the same in order to achieve this purpose, and that none would have their pay topped up.[8]There was a further letter to the claimant dated 20 April 2020 which this time sought his consent to being placed on furlough. The letter anticipated that he would remain on furlough until 31 May 2020, when the scheme was due to end, but informed him that the situation would be kept under review. He could be called back to work earlier. The claimant signed the letter on 24 April 2020 agreeing to be placed on the furlough scheme.[9]By letter dated 26 May 2020 the respondent extended the claimant’s furlough period until 31 July.[10]There is no communication about this from the claimant until 15 June when he sought clarification. On 26 June he emailed HR noting that his request to top up his pay had been refused. He asked for consultation over the ‘prolonged’ change to the terms of his employment which had reduced his overall income significantly.[11]He finished his email: ‘that said, I would need to ask you for an agreement, where I would be made redundant, receiving statutory redundancy pay’.[12]On 30 June the respondent stated that they would consider his application for ‘voluntary redundancy’ and they asked him to complete an application form, which he did.[13]On 1 July 2020 the respondent gave the claimant a further notice extending his furlough period to 31 October 2020.[14]On 2 July 2020 the claimant gave the respondent one month’s notice of his resignation . He thanked the respondent for the three years and 8 months that he had worked for them.[15]Ms Lee wrote back on 3 July to check that he wanted to resign. She asked him whether he wanted her to disregard his voluntary redundancy application. The claimant sought clarification. He then reiterated his resignation. This was acknowledged by the respondent on 7 July 2020.[16]There was further communication between the claimant and the respondent over his final pay. On 8 July the claimant stated that he had sent across his voluntary redundancy application on 30 June. It had not been processed. He had sent his notice letter dated 2 July. He added ‘if you want to proceed with the voluntary redundancy giving statutory redundancy pay that is welcome, but my last day can’t be delayed’.[17]On the same day the respondent gave the claimant the option of withdrawing his resignation so that his voluntary redundancy application could be considered. The claimant replied to say that the respondent could proceed with the voluntary redundancy process ‘giving the redundancy pay that I entitled to’ provided that the leaving date of 2 August 2020 would be respected. He added: ‘otherwise the notice letter sent the 2 July prevails’.[18]On 9 July 2020 Ms Lee replied that as the claimant had not retracted his resignation, the termination of his employment would be processed.[19]The claimant’s evidence was that he was struggling to manage on the money he was receiving giving the substantial reduction in his pay. (He estimates that his pay had reduced by 37% because he was on a reasonably high salary and was affected by the salary cap). After he received the furlough extension notice on 26 May he started to look for another job. He said that he started a temporary contract role in August 2020, a few weeks after his employment ended.[20]He argues that the project he had been working on was ongoing; says he should not have been furloughed; and points to the fact that three members of staff were recruited after he left.[21]To succeed in a claim for constructive unfair dismissal, the claimant must be able to show that the employer committed a fundamental breach of his contract of employment (Western Excavating v Sharp). He argues that the ‘breach’ was cutting his pay and that he did not consent to any reduction after 31 May.[22]I find that the respondent did not breach the contract of employment for two reasons.[23]First they had the right to lay the claimant off under the contract of employment which they had clearly exercised in April 2020 – subject to his right to seek a redundancy payment after four weeks.[24]Second the claimant had consented to being on furlough. The length of the furlough period was indicative only not fixed. It was to be kept under review. It was made clear that it could be brought to an end earlier than the dates indicated. While the expected end date was specified in each extension letter, I find that the respondent did not breach the contract of employment on the two occasions when it extended the furlough period.[25]If I am wrong on that I would find that the reason why the claimant resigned was because the furlough scheme had extended. He could simply not see how he could manage on the reduced money.[26]In the alternative, if there was a breach, did the claimant delay too long before accepting it? He was notified on 26 May that his furlough would extend from 31 May to 31 July. He raised no objection to that until his email of 26 June, over a month later, where he requested a dialogue over his reduced pay. He resigned on 2 July 2020 after seeing the letter dated 1 July 2020 stating that there would be a further extension until 31 October. The claimant’s case is that he did not agree to any extension after 31 May. I am not able to find that he was working ‘under protest’ in the period from 1 June to 2 July. He started to look for other work, but did not inform the respondent that he considered them to be in breach. When he resigned, he did not state that he was leaving because the respondent had not sought his consent to the furlough extension. He left to seek other employment. I therefore find that he affirmed the contract.[27]I do not consider it to be relevant that the respondent recruited three additional members of staff after the claimant left. It is clear that the respondent did not wish to lose the claimant. They gave him several chances to retract his resignation. I accept that it was necessary for them to recruit after he decided to leave. Restrictions were eased in the second half of 2020, projects got going and work picked up again.[28]I accept also that the project that the claimant had been working on had been placed on hold up to this point. I do not accept his argument that he was ‘wrongly’ furloughed. The claimant consented to furlough, and this is not a matter that he raised prior to his resignation.[29]This case is an example of the very difficult circumstances that both businesses and individuals found themselves in as a result of the pandemic. The claimant found it very difficult to manage on his reduced salary. Understandably he sought to find another job. He has not been able to establish that in these circumstances he was entitled to resign and treat himself as having been constructively dismissed. The test is a difficult one for employees to meet. It is necessary to show that the employer has committed a breach of the terms of employment that goes to the heart of the contract. In this case the respondent had acted appropriately and within the contractual terms. They had exercised the express provisions of the written contract of employment in relation to short time working and lay off. They had sought the consent of their staff to being placed on furlough. Staff were kept updated and given the best indications possible of how long the furlough would last for.[30]I conclude that there was no breach of contract and no dismissal. The claim for unfair dismissal fails.[31]During the course of the hearing I raised the question of whether in the circumstances set out above the claimant was entitled to a redundancy payment under section 148 of the Employment Rights Act 1996, on the grounds that he had been laid off for more than four weeks. The claimant initially stated that he was not seeking a redundancy payment. It was plain that until today he had no knowledge of the provisions of section 148. After I drew the clause to his attention, he indicated that he would like to seek an amendment to include such a claim. The respondent objected. I decided that it was in the interests of justice to grant the application although the claim was out of time. I accepted that this was a new claim and not a relabelling of the existing claim. I concluded that the respondent was not prejudiced. Mr Price was able to make detailed submissions upon the substantive claim after seeking instructions. In all the circumstances it decided that it was in the interests of justice to grant the application. But ultimately the claim failed because the claimant had given his notice of resignation one day too early. He requested a statutory redundancy payment on 26 June 2020 and resigned six days later on 2 July 2020. He did not give the respondent a period of seven days to consider serving a counter notice and calling him back to work. His claim therefore did not comply with section 150 of the Employment Rights Act 1996, and it does not succeed.