Employment Judge M JoyceSelf-represented for claimantMs S Harty (instructed by Counsel) for respondentDate 16 January 2025
JUDGMENT
The Judgment of the Tribunal is that:(i) The Tribunal has jurisdiction to adjudicate upon the claimant’s claims for unauthorised deductions from wages;(ii) The claimant’s claims are within time.
REASONS
[1]The matter was listed for a preliminary hearing in public in order to hear the respondent’s application for dismissal of the claimant’s claims for want of jurisdiction under Rule 53(1)(b) of the Rules of Procedure. The claimant had filed a claim for unauthorised deduction of wages and a national minimum wage claim totalling £35,060.60, updated to £46,176.60 in his witness statement. While the respondent had understood that the claimant was also pursuing a claim for breach of contract, his ET1 claim form did not include that claim and the claimant clarified at the hearing that he had not brought, nor did he intend to bring, that claim.[2]The issues for the preliminary hearing were set out in the previous case management order of 29 September 2023. The principal issue was: Whether the Tribunal has territorial jurisdiction to hear all or any of the claimant’s claims? The respondent’s[3]The other issues related to time limits for bringing the claim (5.2 to 5.3.4 of the order of 29 September 2023).
Procedure
[4]There was an oral hearing at which one witness gave evidence for the respondent and the claimant also gave evidence. There was a bundle of documents of 72 pages. Both parties made closing submissions.
Preliminary matters
[5]In advance of the hearing, the claimant had made an application to strike out the respondent’s response. Following submissions from both parties I denied the application. Reasons were provided at the hearing.[6]References in brackets below are to the bundle page number.
Facts
[7]On date unknown, the respondent was registered at the claimant’s home address of 40-42 Uxbridge Road, London.[8]The claimant signed a contract of employment (“Contract”) on 1 May 2019 as a consultant for the respondent. The respondent’s managing director is Mr Emilia Kostrz and the claimant is also a director of the respondent in which he owns a 40% share.[9]The claimant also owns a 40% share in Dotcable Africa SARL, the Senegalese subsidiary of the respondent.[10]The respondent and Dotcable Ltd are companies under the overall umbrella of Netcable Sp. Z.o.o. which is located in Poland. Dotcable Ltd was established to develop a presence and business in the UK market, whereas Dotcable Africa Ltd (the respondent) was established to develop a presence and business in Senegal. The above companies, including the respondent, specialise in renewable energy.[11]Upon commencing employment, the claimant was assigned overseas to work in Senegal, the country of his birth. Although he signed the Contract on 1 May 2019 he moved to Senegal approximately 1 month later on 3 June 2019.[12]The claimant’s salary (“Salary”) was paid into a Halifax Bank Account in Great Britain every month. Tax and other social security deductions from the claimant’s salary were made in Great Britain. The claimant does not own a property in Senegal and was/is renting while he was/is there.[13]The relevant terms of the Contract are as follows: 2. SALARY The Employer shall pay the Employee a salary of £1,400, payable by bank transfer at 10 of each month. (…) 3. HOURS OF EMPLOYMENT AND PLACE OF EMPLOYMENT (…) The Employee’s normal place of work is Craven House, 40-44 Uxbridge road, London, United Kingdom WF2BS or such other place within London which we may reasonably require for the proper performance and exercise of your duties. You agree to travel on our business (both within the United Kingdom or abroad) as may be required for the proper performance of your duties under the employment, especially to Senegal. 4. OVERSEAS ASSIGNMENT. You shall also be required to work outside the United Kingdom (UK) in Dakar, Senegal from 1 May 2019 to 30 April 2021 (Overseas Assignment) During the Overseas Assignment:(a) your place of work shall be Villa No. 95, HLM Grand-Yoff, Dakar, Senegal(b) your holiday entitlement shall remain the same as under this agreement but you shall be entitled to the public holidays in Senegal rather than the usual public holidays in England and Wales;(c) you shall be paid the equivalent of your salary in the local currency. The equivalent to your salary in the local currency shall be determined by our bank at the rate of exchange applying when making the payment. You may be subject to tax and social security contributions in Senegal. We shall make whatever deductions for tax or other social security contributions as are necessary and which we may be advised to make, either in the UK or in Senegal;(d) we will reimburse expenses to the Employee in the amount of £1100 a month. This is the budget of the Employee to be used on travel and other overnight expenses;(e) The Employee is also entitled to the accommodation allowance in the amount of £300;(f) The Employee will be granted company car for his use. At the conclusion of the period of your Overseas Assignment the provisions of this clause shall cease to apply in particular you shall return to your normal place of work as specified in clause 3.[14]The claimant’s Salary (as above, payable on the 10th day of each month) was paid in arrears, as evidenced by the claimant’s bank statements [pp. 20-26].[15]The claimant’s bank statements [pp. 20-26] show that expenses were paid on different dates each month, but were being paid monthly. I concluded that the claimant’s expenses (“Expenses”) and accommodation allowance (“Accommodation Allowance”) were payable monthly.[16]The Expenses were payable, per the Contract terms, for “travel and other overnight expenses”. No evidence of receipts being submitted in relation to Expenses was provided. On the basis of the available, limited bank statements, I concluded that the amount of £1,100 was paid in full regardless of the amount of Expenses actually incurred.[17]The claimant’s first project in Senegal was to construct a solar power plant on a remote island for the Senegalese Agency for Renewable Energy. The project was concluded in August 2020, but the Senegalese Ministry of Oil and Energy did not grant an operating licence.[18]From May 2019 to October 2021, the claimant received his Salary, Expenses and Accommodation Allowance as per his contractual terms. At no time during this period or subsequently did the respondent require the claimant to return to the UK for work.[19]The terms of his Contract, as set out above, required the claimant to return to the UK to work as of April 2021 when his overseas assignment to Senegal was due to conclude.[20]In April 2021, the claimant and Mr Kostrz discussed the possibility of opening a shop in Dakar to sell and install solar products/systems while awaiting the abovementioned operating licence, which the Ministry of Oil and Energy had not yet granted.[21]The lease for a new shop was signed at the end of June 2021. Due to Covid restrictions Mr Kostrz asked the claimant to send him a letter of invitation to enable him to visit Senegal. Mr Kostrz visited Senegal and stayed at the claimant’s residence from 12 July to 23 July 2021.[22]From October 2021 a dispute arose as to the payment of the claimant’s Expenses and, also his Accommodation Allowance. It is unnecessary for me to make a finding as to whether the payment of those items occurred as of October 2021. This is because the claimant’s claim under for Expenses and Accommodation Allowance is from March 2022 onwards.[23]On the evidence before me, I found that the respondent did not make any payments to the claimant for either Expenses or Accommodation Allowance from March 2022 onwards.[24]On 1 May 2022, 10 months after signing the lease, the claimant opened the aforementioned shop. From the end of May 2022, the respondent had been asking the claimant that dividends be sent to the respondent so that the funds could be used to pay the claimant’s Expenses, Accommodation Allowance and Salary.[25]The claimant alleged that as of January 2023, the respondent ceased paying the claimant’s salary. The claimant raised his concerns with Mr Kostrz as to the alleged non-payment of sums owed to him in the subsequent months. This included written communications on 3, 16 and 17 January 2023 [pp. 41, 47 and 48].[26]Salary payslips were issued for the claimant for January, February and March 2023, with the claimant’s last payslip being issued on 5 March 2023 [pp. 17-19]. However, there was no evidence provided that the claimant was subsequently paid his salary on 10 March 2023, per clause 2 of his Contract.[27]On the evidence before me, I concluded that the respondent did not pay the claimant his salary from March 2023 onwards.[28]On 5 February 2023 the claimant sent the respondent a stock inventory and business report, in addition to a bank statement for January 2023.[29]On 23 February 2023, the respondent’s legal representatives wrote to the claimant acknowledging his claims for Expenses and Accommodation Allowance stating “Your outstanding salary and expenses due from DOTCABLE AFRICA being unpaid due to failure of the SARL to make any distribution to DOTCABLE AFRICA” [p. 58].[30]On 9 February 2023, ACAS received the early conciliation notification. On 7 March 2023, the ACAS certificate was issued.[32]On 27 June 2023, the respondent’s legal representatives sent the claimant a notice of a board meeting to take place on 7 July 2023 in which it was proposed to remove the claimant as a director of Dotcable Africa SARL, and to terminate his overseas assignment per clause 4 of the Contract [pp. 60-63].[33]On 17 July 2023, the claimant filed his ET1 claim form (“ET1”) claiming unauthorised deductions in relation to his Salary, Expenses, and Accommodation Allowance. He also filed a national minimum wage claim.
Law
[34]Rule 53 (1) provides in relevant part: Scope of preliminary hearings 53.(1) A preliminary hearing is a hearing at which the Tribunal may do one or more of the following— (a) (…) (b) determine any preliminary issue; (…)[35]I was referred to the following case law as regards the issue of territorial jurisdiction:[36]From British Council v Jeffrey [2019] ICR 929 (‘Jeffrey’) I derive the following principles:(i) In the majority of cases those who live and work abroad will be subject to the employment law of that country as opposed to English employment law. This is referred to as the “territorial pull of the place of work” (see also Duncombe v Secretary of State for Children Schools and Families (No 2) [2011] ICR 1312 (“Duncombe”) at paragraph 8);(ii) there will be exceptional cases where certain factors connect the employment to England and English employment law such that the territorial pull of the place of work is overcome (“sufficient connection question”); and(iii) where a worker lives and works abroad (as opposed to commuting) the factors connecting employment with England and, as such, English employment law will have to be particularly compelling in order to overcome the principle of the ‘territorial pull of the place of work’.[37]Jeffrey also provides, at paragraph 62, that ‘choice of law’ clauses in contracts of employment are relevant, but rarely the deciding factor in determining where territorial jurisdiction lies: “(…) a choice of English law by itself would be incapable of overcoming the territorial pull of the place of work in the case of a true expatriate: “I suspect that the contracts of may or most such employees of British companies contain such provisions, but if that were to be treated as decisive the exception would overwhelm the rule, which is clearly contrary to the message of the authorities”.[38]In Ravisy v Simmons and Simmons LLP [2018] UKEAT/0085/18/OO, the EAT divided cases into three broad categories:(i) Those in which the claimant worked in Great Britain, and where consequently, there will be territorial jurisdiction;(ii) cases where the claimant worked outside of Great Britain. In these cases there was a presumption against territorial jurisdiction unless there are factors that render the case exceptional; and(iii) cases where the claimant lived and worked at least some of the time in Great Britain. In these cases, there is no requirement of ‘exceptionality’ in order for territorial jurisdiction to be established and the comparative exercise set out in category (ii) is not required. There needs to be a sufficiently strong connection with Great Britain and British Law.[39]From Lawson v Serco Ltd [2006] UKHL 3 paragraphs 37-38, I derive the principle that the place of employment is generally decisive as to territorial jurisdiction: “First, I think that it would be very unlikely that someone working abroad would be within the scope of section 94(1) unless he was working for an employer based in Great Britain. But that would not be enough. Many companies based in Great Britain also carry on business in other countries and employment in those businesses will not attract British law merely on account of British ownership. The fact that the employee also happens to be British or even that he was recruited in Britain, so that the relationship was “rooted and forged” in this country, should not in itself be sufficient to take the case out of the general rule that the place of employment is decisive. Something more is necessary”. This, ‘something more’, would include where, for example, an employee was posted to work abroad by a British employer as a representative of a business conducted in Great Britain, for example a foreign correspondent of a British newspaper, and also where, the employee worked within an extra-territorial enclave in a foreign country (for example, a military base). However, Duncombe made clear that the correct approach was not to treat these as fixed categories but rather as examples.[40]The following authorities are of relevance in considering where an employee ‘ordinarily works’: Carver v Saudi Arabian Airlines (1999 ICR 991, CA) provides that where an employee ordinarily works is to be decided by reference to the contract of employment, having regard to the whole period of the contract. In Lawson, paragraph 27, however, the House of Lords held that attitudes had changed significantly since Carver. The key issue to be considered was whether the employee was working in Great Britain at the time of the relevant incident being considered by the Tribunal/Court and not what was contemplated when the contract was made.[41]Todd v British Midland Airways Ltd [1978] ICR 959 at p. 964 states that “As a rule there is no term in the contract about exactly where [the employee is to work] you have to go by the conduct of the parties and the way they have been operating the contract. You have to find at the material time where the [person] is based”.[42]As to time limits section 23 ERA provides, in relevant part: (1)A worker may present a complaint to an [F1employment tribunal]— (a)that his employer has made a deduction from his wages in contravention of section 13 (including a deduction made in contravention of that section as it applies by virtue of section 18(2)), (…) (2)Subject to subsection (4), an [F1employment tribunal] shall not consider a complaint under this section unless it is presented before the end of the period of three months beginning with— (a)in the case of a complaint relating to a deduction by the employer, the date of payment of the wages from which the deduction was made, or (b)in the case of a complaint relating to a payment received by the employer, the date when the payment was received. (3)Where a complaint is brought under this section in respect of— (a)a series of deductions or payments, or (b)a number of payments falling within subsection (1)(d) and made in pursuance of demands for payment subject to the same limit under section 21(1) but received by the employer on different dates, the references in subsection (2) to the deduction or payment are to the last deduction or payment in the series or to the last of the payments so received.[43]Per Langstaff P in Bear Scotland v Fulton [2015] IRLR 15 (“Bear Scotland”), in order for a number of deductions to be a “series” there has to be “sufficient frequency of repetition”, that is a sufficient factual and temporal link.[44]It is unlikely to be necessary for all the deductions in a series to be unlawful provided that there is at least one in-time proven unlawful act (Ekwelem v Excel Passenger Service Limited [2013] EAT 0438/12 and Royal Mail Group limited v Jhuti [2018] EAT 0020/17 per Simler P). However, Bear Scotland held that a gap of more than three months between any two deductions will break the ‘series’ of deductions.[45]As to the definition of wages under the ERA, I remind myself of the following provisions: 27 Meaning of “wages” etc. (1)In this Part “wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including— (a)any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise, (b)statutory sick pay under Part XI of the M1Social Security Contributions and Benefits Act 1992, (c)statutory maternity pay under Part XII of that Act, [F1(ca)[F2statutory paternity pay] under Part 12ZA of that Act, (cb)statutory adoption pay under Part 12ZB of that Act,] [F3(cc)statutory shared parental pay under Part 12ZC of that Act,] [F4(cd)statutory parental bereavement pay under Part 12ZD of that Act,] [F5(ce)any amount of qualifying tips, gratuities and service charges allocated to the worker under Part 2B of this Act,] (d)a guarantee payment (under section 28 of this Act), (e)any payment for time off under Part VI of this Act or section 169 of the M2Trade Union and Labour Relations (Consolidation) Act 1992 (payment for time off for carrying out trade union duties etc.), (f)remuneration on suspension on medical grounds under section 64 of this Act and remuneration on suspension on maternity grounds under section 68 of this Act, [F6(fa)remuneration on ending the supply of an agency worker on maternity grounds under section 68C of this Act.] (g)any sum payable in pursuance of an order for reinstatement or re-engagement under section 113 of this Act, (h)any sum payable in pursuance of an order for the continuation of a contract of employment under section 130 of this Act or section 164 of the Trade Union and Labour Relations (Consolidation) Act 1992, and (j)remuneration under a protective award under section 189 of that Act,but excluding any payments within subsection (2). (2)Those payments are— (a)any payment by way of an advance under an agreement for a loan or by way of an advance of wages (but without prejudice to the application of section 13 to any deduction made from the worker’s wages in respect of any such advance), (b)any payment in respect of expenses incurred by the worker in carrying out his employment, (c)any payment by way of a pension, allowance or gratuity in connection with the worker’s retirement or as compensation for loss of office, (d)any payment referable to the worker’s redundancy, and (e)any payment to the worker otherwise than in his capacity as a worker[46]I also take account of the following case law in determining whether the Expenses and Accommodation Allowance payable under the Contract were wages, or whether they were excluded under s. 27 (2)(b) ERA:[47]In Southwark London Borough Council v O’Brien 1996 IRLR 420, EAT (“O’Brien”) the EAT held that the exclusion under section 27(2)(b) ERA applies to payments in respect of expenses and there is no need for them to amount to an exact reimbursement. The issue is whether the amount payable was ‘in respect of’ expenses. That phrase indicates that a payment may fall within S.27(2)(b) even though the amount does not exactly match the expense incurred. The payment of an expense (in that case a mileage allowance) did not cease to be ‘in respect of expenses’ simply because it was generous.[48]O’Brien was cited with approval by the EAT in Qantas Cabin Crew (UK) Ltd v Lopez and anor 2013 IRLR 4, EAT (“Qantas”) concluded that a ‘living away from home allowance’, paid to cabin crew who were seconded from Australia to London, had to be regarded as a payment in respect of expenses. The allowance had been treated as such for the purpose of tax efficiency and there was a direct link between the higher cost of living in London and the payment of this allowance. The EAT made it clear that it was important to apply the guidance in O’Brien, which emphasised that payments ‘in respect of’ expenses fell within S.27(2)(b).[49]As to the exclusion applicable under s. 27(2)(b) ERA, relating only to expenses incurred by the worker ‘in carrying out’ his or her employment I take note of the principles set out in Kosschuk and ors v Tilcon Ltd ET Case No.46224/95. In that case, the travel expenses of workers in a remote area were held to constitute wages because they were not incurred by the employees in carrying out their work but were aimed at recompensing employees for the expense of getting to and from work.[50]I also have regard to Brearley and ors v Lifetime Careers (Barnsley, Doncaster and Rotherham) Ltd ET Case No.2801296/98 (“Brearley”) where a ‘disturbance allowance’ given to relocated employees to cover the extra expense of travelling to work constituted wages in Brearley and ors v Lifetime Careers (Barnsley, Doncaster and Rotherham) Ltd ET Case No.2801296/98. Conclusions Territorial Jurisdiction
Conclusions
[51]The respondent’s principal arguments in respect of territorial jurisdiction are(i) that the claimant has never worked in the UK and his base for work purposes has always been Senegal and as such he is a ‘truly expatriate employee’;(ii) As such, the claimant would need to demonstrate a “much stronger connection” with the UK than Senegal in order to establish that this Tribunal has jurisdiction;(iii) the facts that (a) the claimant was recruited by a UK company in the UK; (b) the law governing his Contract of employment is that of England and Wales and; (c) his salary and benefits were paid into a UK bank account, with tax deducted in the UK are all insufficient to amount to the “much stronger connection” required to overcome the ‘territorial pull’ of Senegal.[52]The claimant’s principal contentions are that(i) the Contract makes clear that the governing law is that of England and Wales;(ii) Dotcable Africa Ltd (the respondent) is a subsidiary of Dotcable Ltd and any profits would have been returned from Senegal to the UK;(iii) his wages were paid in the UK, along with all taxes being deducted there and his pension is held in the UK;(iv) he did not decide to go to Senegal, the respondent sent him there;(v) his ties to the UK are more significant as he owns a property in the UK and solely rents in Senegal.[53]I note that there is little, if any, disagreement between the parties as to the relevant facts necessary for me to arrive at a decision. I note that the respondent accepts that the claimant was not dismissed and that he remains a director and shareholder of the respondent.[54]I consider that the claimant had only worked in the UK for approximately one month prior to relocating to Senegal in June 2019, and that he had worked from Senegal since then. He was not commuting back and over to the UK and, on his own evidence, was not required to return to the UK at any time during his Contract to work from there. As such, I consider that, applying the principles in Lawson, the ‘territorial pull’ is to Senegal.[55]Consequently, applying the principles in Jeffrey, Ravisy and Lawson, I need to consider whether there are any exceptional/compelling factors that would overcome that territorial pull such that this Tribunal would have jurisdiction. Per Jeffrey, the ‘governing law’ clause is but one factor and is not decisive. Indeed, it is commonly the case that Contracts concluded in Britain will contain such clauses.[56]However, I have considered all of other relevant factors. First, the nature of the business itself. It does seem to me that the business being conducted by the claimant in Senegal was akin to the circumstances envisaged as ‘something more’ in Lawson. While I noted that Lawson provided the example of a foreign correspondent working abroad for a British newspaper, Duncombe confirmed that this was just one example.[57]I note that the claimant was responsible for developing business for Dotcable Africa Ltd in Senegal, which was inextricably linked to the development of business in Britain. As such, the claimant was, in essence, the representative of a British business abroad in Senegal. Furthermore, his pay has been received into a British bank account and in my view, significantly, his taxes have been paid in Britain. It is also of significance that the respondent is registered at the claimant’s home address in Britain. This further underlines the connection of the business itself to Britain, not Senegal.[58]These factors demonstrate closer links to Britain than an employee who is working abroad, being paid into a local bank account and paying taxes in that country. These factors are further demonstrative of an intention that the claimant would return to Britain following his period of overseas assignment.[59]The intention for the claimant to return to Britain is also clearly set out in the Contract itself where it was envisaged that the claimant would return to Britain in April 2021. The fact that this did not occur cannot legitimately be held against the claimant simply because it was not followed through on by the respondent.[60]I therefore conclude that the factors relied upon by the claimant are on balance sufficient to override the territorial pull of the place of work, namely Senegal, and that this Tribunal has territorial jurisdiction to hear his claims. ‘Wages’, and Time Limits[61]The respondent contends that the claimant first contacted ACAS on 9 February 2023 but did not bring his claim until 17 July 2023, which was out of time. As to the national minimum wage claim, the claimant has been paid at the alleged lower rate since April 2021 and he knew from then that this was the case. As such the last relevant payment in the series was May 2021 and time should run from then. As to his Expenses and Accommodation Allowance claim, the respondent alleged the first time the claimant was not paid was July 2022 and so time should run from then.[62]The respondent maintains that in any event, the claimant’s last payment was in March 2023 and so his claims both for national minimum wage and unauthorised deductions from wages, if the time limit runs from that date, would still be out of time. Further, the respondent contends that it would have been reasonably practicable for the claimant to bring his claim in time and he has not adduced any evidence as to why this would not have been possible.[63]The claimant maintains that his national minimum wage claim and claims for nonpayment of Salary, Expenses and Accommodation Allowance are ongoing issues. He states that he was trying to find an amicable solution to this matter and that he sent a without prejudice letter to the respondent in order to resolve the dispute, but did not receive any response.[64]The positions in respect of the national minimum wage claim, Expenses, Accommodation Allowance, and Salary is different and will be addressed separately. Expenses[65]The issue of whether or not the Expenses are wages within the meaning of the ERA (in particular sections 27(1) and (2)) was not raised by either party. However, it is a matter which I have considered in light of the statutory provisions of the ERA, and in particular sections 13 and 27.[66]The test is whether or not the payments are in ‘respect of expenses incurred by the worker in carrying out his employment’.[67]As to being ‘in respect of expenses’, based on the principles as set out in O Brien, I conclude that the fact that the claimant received these amounts regardless of actual expenses incurred (bank statements at pages 22-25 show regular payments in excess of the £1100 allocated for Expenses), while not determinative is a relevant factor. Equally, the fact that the Expenses are for a significant amount when a comparison is drawn with his Salary is a factor to weigh in the balance.[68]While the wording of the Contract refers to the sum of £1100 per month for “travel and overnight expenses” no evidence was presented by either side that the monies payable were indeed used for this purpose. For example, there was no evidence of receipts being provided by the claimant. Indeed, as noted above, that the Expenses are not wages within the definition of the ERA was not an argument pursued by the respondent, and consequently no evidence on this issue was presented. In the absence of such evidence, it was not possible for me to conclude solely on the basis of the mere label ‘travel expenses’ that the amounts payable were indeed ‘in respect of expenses’.[69]Furthermore, for the same reasons, no evidence was presented as to the Expenses being ‘incurred by the [claimant] in carrying out his employment’. It is obvious that but for his employment the Expenses would not have been payable to the claimant. But that is, of course, not the same thing. On the basis of the limited evidence before me and having regard to the principles in the authorities cited above, including Brearley, I am unable to conclude that the sums payable as Expenses were incurred by the claimant in carrying out his employment.[70]Consequently, I find that the Tribunal does have jurisdiction to consider the claimant’s claim for Expenses as an element of his wages.[71]As to the issue of time limits, I find as follows: The respondent accepts that, as of the date of the hearing, the claimant was still employed. The claimant alleged that the respondent ceased paying Expenses as of October 2021. However, his ET1 refers to non-payment of Expenses from “March 2022 to June 2023”. On the evidence before me, these amounted to a series of deductions which has continued at least until June 2023.[72]I do not accept the respondent’s position that the last deduction was in March 2023. This was when the last payment of the claimant’s Salary was made, but based on the evidence before me, I find that the non-payment of Expenses has been ongoing since March 2022 and until June 2023.[73]There is no provision in the Contract by when Expenses are payable each month, and the claimant’s bank statements [pp. 20-26] show that Expenses were paid on different dates each month. As such, while (as found in the ‘Facts’ section) I have concluded that Expenses were payable each month, it is not possible for me to define an exact date in June 2023, on which the alleged deduction was made.[74]However, regardless of when exactly Expenses were payable in June 2023, the latest date by which they were properly payable was 30 June 2023. They were not paid as of that date and so there was a deduction. Applying section 23(3) ERA and the principles in Bear Scotland, the claimant’s claim on 17 July 2023 are therefore clearly have been within time. Accommodation Allowance[75]As to Accommodation Allowance, the ET1 states that the claimant’s claim was from March 2022 to April 2023. However, his updated schedule of loss [70] provides that he seeks compensation for non-payment of Accommodation Allowance from March 2022 to September 2023.[76]Although not raised by either party, I must consider whether the Accommodation Allowance falls within the definition of wages, or whether it is excluded as being in ‘respect of’ expenses under s. 27(2)(b) ERA. Again, this was not an argument pursued by the respondent and as such there was little evidence available on this matter. On the basis of the limited evidence available, and having regard to the principles in O’Brien and Brearley, I am unable to conclude that the Accommodation Allowance was payable ‘in respect of expenses incurred by the [claimant] in carrying out his employment’.[77]I have also concluded that the position in respect of the claimant’s Accommodation Allowance is distinguishable from that as set out in the authority of Qantas. First, there was no evidence this was an allowance, unlike in Qantas, in order to meet higher living costs incurred at the place of work (Senegal). Second, whereas in Qantas the payment was made for tax efficiency purposes, there is no such evidence that this is the position here. In light of these factors I have concluded that the Accommodation Allowance falls within the definition of wages and as such may form the basis for a claim for an unauthorised deduction.[78]Similar to the above position regarding Expenses, the Contract does not provide an exact date by when the claimant’s Accommodation Allowance must be made, save to say that he is “entitled to the accommodation allowance in the amount of £300 per month”. As found in the facts section, I concluded that it was properly payable monthly.[79]No evidence of payment in April 2023 was presented, and indeed the respondent’s position was that no such payment was made. On the basis of the evidence before me, I find that no payment for Accommodation Allowance was made to the claimant between March 2022 and April 2023.[80]Taking the claim as set out in the ET1 (from March 2022 to April 2023), the latest date by when the claimant’s Accommodation Allowance was properly payable by the respondent was 30 April 2023. The ET1, filed as it was on 17 July 2023, is therefore within the time limit of before the end of the period of three months from that deduction.[81]As to the claimant’s claim for additional compensation as set out in the updated schedule of loss, from May to September 2023, these must be the subject of an application to amend by the claimant if he wishes to proceed with a claim in relation to those specific months. In terms of the requirements, the claimant should write without delay to the respondent and the Tribunal setting out the details of his application to amend his claim to include claims for unauthorised deductions from May to September 2023, including the factual basis for his claims. Salary[82]The Contract provides that the claimant’s Salary is due on the 10th day of each month. The ET1 alleges unauthorised deductions of wages in April 2022 and then from March 2023 to June 2023. The schedule of loss [70] seeks further compensation for unpaid Salary for April 2022 and March 2023 to September 2023.[83]As for payment in April 2022, applying the principles in Bear Scotland, this is not part of a series of deductions as there is significant gap between the deduction in April 2022 and the subsequent deduction in March 2023. Nor has the claimant provided any evidence as to why it was not reasonably practicable for him to file a claim in relation to the deduction in April 2022 in time. As such, this aspect of his claim, in relation to April 2022, is time-barred.[84]However, for the period from March 2023 to June 2023, I find, on the basis of the evidence before me, that there were deductions in each of these months and that these do form part of a series of deductions. The ET1 was clearly filed within the time limit of before the end of the period of three months from the deduction.[85]As to the deductions from July to September 2023, which are included in the updated schedule of loss, these must be subject to an application to amend if the claimant wishes to proceed with them. In terms of the requirements, the claimant should write without delay to the respondent and the Tribunal setting out the details of his application to amend his claim to include claims for unauthorised deductions from July to September 2023, including the factual basis for his claims. National Minimum Wage[86]The ET1 makes a claim for non-payment of the national minimum wage from 1 April 2021 to date, which I interpret as an unpaid wages claim: the claimant is claiming that not only was he not paid his Salary (of £1400 per month), but that salary included an additional unauthorised deduction in that it did not correspond to an hourly rate in line with the national minimum wage.[87]This represents a claim for an unbroken series of alleged unauthorised deductions, with the last such alleged unauthorised deduction (prior to the ET1 being filed), being made on 10 July 2023: i.e. this is the last date on which the claimant’s salary fell due prior to him filing his ET1. As such, this aspect of the claim is also clearly within the applicable time limit. Other Matters[88]I will issue instructions to the Tribunal’s administration to contact the parties with a date for a case progression hearing at which directions can be made in preparation for a final hearing in this matter.[1]The claimant’s claims for unlawful deduction of wages and failure to pay the National Minimum Wage succeed. The claimant is owed by the respondent a) Salary - £1400 per month (gross) for the period March 2023 to 16 January 2025 - £30,100 b) Expenses - £1100 per month (gross) for the period April 2022 to 16 January 2025- £37,950 c) Accommodation allowance- £300 per month (gross) for the period April 2022 to 16 January 2025- £10,350 d) The “shortfall” between these sums and the amount of the National Minimum Wage payable in the UK from April 2021 to 16 January 2025 - £15,560[2]The Total Monetary Award is £93,960. NOTE: This is a gross figure, and the respondent must account to HMRC for the appropriate income tax and National Insurance Contributions. 1 of 8[1]This was a Final Hearing (listed for 2 days) to consider the claimant’s claim under section 13 of the Employment Rights Act 1996 (ERA) for unlawful deduction of wages and failure to pay the National Minimum Wage.[2]This case has taken up a fair amount of Tribunal time since the claimant lodged his ET1 with the Tribunal on 17 July 2023, following an Early Conciliation process with ACAS from 9 February to 7 March 2023. Hearing on 29 September 2023[3]The case was originally scheduled for a full merits hearing on 29 September 2023. However, that hearing was converted to a preliminary hearing for case management as the claimant was unable to give evidence from Senegal. The case summary indicated that the claimant was employed by the respondent as a consultant in photovoltaic construction, from 1 May 2019 and that his employment was continuing.[4]The claim was about unpaid salary, living expenses and accommodation allowances between the dates of April 2022 and June 2023. The claimant also claimed that he had not received pay in accordance with the National Minimum Wage between April 2021 to the date of his ET application.[5]The respondent’s defence was that the ET had no jurisdiction to hear the complaints as the claimant was, at all maternal times, working abroad in Senegal. In addition, they stated that the claimant effectively stopped working for them from January 2023 and therefore he was not entitled to any payments. Further they argued that the claims were presented out of time as they should have been made within 3 months of the end of January 2023 (section 20 ERA). The respondent was granted an extension of time to lodge its ET3 and a public preliminary hearing was listed for 18 December 2023 to consider issues of territorial jurisdiction and whether the claims had been brought within the relevant time limits. Hearing on 18 December 2023[6]This was a Preliminary Hearing and in a Judgment (with Reasons) dated 19 April 2024, EJ Joyce found that the Tribunal had jurisdiction over the claims and that the claims for the period March -June 2023 had been brought within the time limit. The claims for salary for the period from April 2022 were time-barred, but all the other claims were brought in time.[7]The claimant was advised that he would need to seek a formal amendment to bring claims for unlawful deductions from July 2023 to September 2023 (as per the updated Schedule of Loss provided at that hearing) – which he duly did at the next case management hearing. 2 of 8[8]The respondent requested a reconsideration of this Judgment and Reasons, which was refused. The respondent also sought an adjournment (which was successful) of the case management hearing originally listed for July 2024. Hearing on 6 November 2024[9]This was a case management hearing before EJ Hopton. The respondent did not attend this hearing and it proceeded in their absence. The Final Hearing was listed for 15 and 16 January 2025. The claimant’s amendments to add the period of July 2023 -September 2024 to his claims were allowed. Conduct of the Final Hearing (15 and 16 January 2025)[10]The hearing was scheduled to commence at 10am but the respondent was not present. I asked my clerk to send an email to the respondent and to make a telephone call to check whether they were planning to attend the hearing. There was no reply to the ‘phone call and no facility to leave a voicemail message. I also asked my clerk to check the Tribunal Inbox to see if the respondent had left a message (perhaps late on 14 January or early on 15 January) to explain their non-attendance. There was no such message.[11]At 10.30 my clerk reported that the respondent (S Kostrz) had replied to her email saying that due to “unexpected and emergency business travel” he was unable to attend the hearing. No further details were given, and no evidence was provided of the nature of the emergency or of the travel arrangements. There was no request for a postponement.[12]I noted that the parties were notified of the January hearing dates in November 2024 and further, that the parties were sent Joining Instructions for the video hearing on the evening of 14 January 2025. The respondent would have been aware of the hearing dates. The respondent had made no contact until they received the Tribunal’s email on the morning of 15 January to which they then responded. This behaviour is discourteous to the Tribunal and to the litigation process generally.[13]I decided to continue with the hearing in the respondent’s absence as allowed by Rule 47 of the Employment Tribunal Procedure Rules 2024 (the ET Rules). I asked my clerk to inform the respondent that the hearing was proceeding.[14]The Tribunal was presented with an electronic bundle of 72 pages (previously prepared by the respondent for the December 2023 hearing) and an Annex to that bundle prepared by the claimant (of 38 pages) as requested to do so by EJ Hopton. In addition, in the interests of fairness, I also considered the ET3 and the Grounds of Resistance (although these documents were not included in the bundles).[15]I also requested during the course of the hearing further information from the claimant to support his oral evidence that he was still running the respondent’s business in Dakar. The claimant provided the business accounts for Dotcable Africa SARL for 2023; emails (with English translations) from the company’s accountant asking for information needed to prepare the 2024 accounts; the rental agreement for the company’s shop at Lot33E Ouest Foire in Dakar and a video (taken at 1.02 pm on 15 January 2025) of the shop premises (exterior and interior). 3 of 8[16]The claimant provided an updated witness statement, which he relied on as his main evidence. I then asked him questions and also put to him the points made by the respondent in the ET3 and Grounds of Resistance and in the statement of S Kostrz (undated and unsigned) which had been presented for the 18 December 2023 hearing. I did so in order to attempt to put the respondent’s case in their absence to ensure a fair process.[17]I confirmed with the claimant that although he currently resided in Senegal, he had (as agreed at the case management hearing in November 2024) travelled to the UK in order to give evidence and pursue his claim. He confirmed that he was based at an address in Southampton for the period of the hearing.[18]The hearing concluded at 2.45 on the first day and I agreed to give my decision on 16 January. The claimant then submitted written closing submissions (8 pages) on 16 January morning. Not all of these submissions were relevant to the legal issues in this case (for example those relating to constructive dismissal – the claimant said himself in evidence that he had never resigned; and breach of contract – which the claimant accepted he had withdrawn as a claim). I considered the submissions which were relevant to the issues in the case.[19]I delivered my Judgment (with Reasons) orally on the morning of 16 January 2025. As the respondent had not attended the hearing, I have given Full Reasons in writing. I confirmed the sums claimed with the claimant. Further Amendment to the Claim[20]EJ Hopton allowed the claimant to amend his claim to include unlawful deductions from July 2023 to September 2024. The claimant is claiming losses up to 16 January 2025 – there would, therefore, need to be a further amendment to his claim.[21]I heard the claimant’s application to amend his claim on the morning of 16 January 2025. Findings of Fact[22]I note that the findings of fact set out below (for the period up to June 2023) were made by EJ Joyce having been presented with the evidence in the Main Bundle, which findings I accordingly adopt. I also note that EJ Joyce had the benefit of hearing evidence from Mr Kostrz (which I did not) and that the respondent was represented by Counsel at the December 2023 hearing. Up to June 2023[23]On a date unknown, the respondent was registered at the claimant’s home address of 40-42 Uxbridge Road, London.[24]The claimant signed a contract of employment (“Contract”) on 1 May 2019 (pages 10-14 Main Bundle) as a consultant for the respondent. The respondent’s managing director is Mrs Emilia Kostrz (the wife of S Kostrz), and the claimant is also a director of the respondent in which he owns a 40% share. The claimant also owns a 40% share in Dotcable Africa SARL, the respondent’s Senegalese company. 4 of 8[25]The respondent and Dotcable Ltd are companies under the overall umbrella of Netcable Sp. Z.o.o. which is located in Poland. Dotcable Ltd was established to develop a presence and business in the UK market, whereas Dotcable Africa Ltd (the respondent) was established to develop a presence and business in Senegal. The above companies, including the respondent, specialise in renewable energy.[26]Upon commencing employment, the claimant was assigned overseas to work in Senegal, the country of his birth. Although he signed the Contract on 1 May 2019 he moved to Senegal approximately 1 month later on 3 June 2019.[27]The claimant’s salary (“Salary”) of £1400 (gross) was paid into a Halifax Bank Account in Great Britain on the 10th day every month (as per his contract of employment). Tax and other social security deductions from the claimant’s salary were made in Great Britain. The claimant’s Salary was paid in arrears, as evidenced by the claimant’s bank statements (pp. 20-26 of the Main Bundle).[28]The claimant’s bank statements show that expenses were paid on different dates each month but were being paid monthly. [EJ Joyce] concluded that the claimant’s expenses (“Expenses”) and accommodation allowance (“Accommodation Allowance”) were payable monthly.[29]The Expenses were payable, per the Contract terms, for “travel and other overnight expenses”. No evidence of receipts being submitted in relation to Expenses was provided. On the basis of the available, limited bank statements, I [EJ Joyce] concluded that the amount of £1,100 was paid in full regardless of the amount of Expenses actually incurred.[30]The claimant’s first project in Senegal was to construct a solar power plant on a remote island for the Senegalese Agency for Renewable Energy. The project was concluded in August 2020, but the Senegalese Ministry of Oil and Energy did not grant an operating licence.[31]From May 2019 to October 2021, the claimant received his Salary, Expenses and Accommodation Allowance as per his contractual terms.[32]The terms of his Contract, as set out above, required the claimant to return to the UK to work as of April 2021 when his overseas assignment to Senegal was due to conclude.[33]In April 2021, the claimant and Mr Kostrz discussed the possibility of opening a shop in Dakar to sell and install solar products/systems while awaiting the above-mentioned operating licence, which the Ministry of Oil and Energy had not yet granted.[34]The lease for a new shop was signed at the end of June 2021 (on 26 June as per the copy presented by the claimant at the hearing).[35]From October 2021 a dispute arose as to the payment of the claimant’s Expenses and, also his Accommodation Allowance. It is unnecessary to make a finding as to whether the payment of those items occurred as of October 2021. This is because the claimant’s claim for Expenses and Accommodation Allowance is from March 2023 onwards. 5 of 8[36]On the evidence presented EJ Joyce found that the respondent did not make any payments to the claimant for either Expenses or Accommodation Allowance from March 2023 onwards. I agree with that conclusion.[37]On 1 May 2022, 10 months after signing the lease, the claimant opened the aforementioned shop. From the end of May 2022, the respondent had been asking the claimant that dividends be sent to the respondent so that the funds could be used to pay the claimant’s Expenses, Accommodation Allowance and Salary.[38]The claimant alleged that as of January 2023, the respondent ceased paying the claimant’s salary. The claimant raised his concerns with Mr Kostrz as to the alleged non-payment of sums owed to him in the subsequent months. This included written communications on 3, 16 and 17 January 2023 [pp. 41, 47 and 48 of the Main Bundle][39]Salary payslips were issued for the claimant for January, February and March 2023, with the claimant’s last payslip being issued on 5 March 2023 [pp. 17-19]. However, there was no evidence provided that the claimant was subsequently paid his salary on 10 March 2023, per clause 2 of his Contract.[40]On the evidence presented EJ Joyce concluded (and I concur) that the respondent did not pay the claimant his salary or expenses or accommodation allowance from March 2023 onwards.[41]The claimant’s claim for salary (as allowed in time by EJ Joyce) was from March 2023 to June 2023. The claimant’s claims for Expenses and Accommodation Allowance from March 2022 were found to be in time by EJ Joyce. The claim for National Minimum Wage was in time as from April 2021. July 2023 onwards[42]The claimant was allowed (by EJ Hopton) to amend his claim to include the period from July 2023 – September 2024. As regards that period and to date, the claimant said in his oral evidence (in response to my questions) that his employment was continuing as he had not been dismissed and he had never resigned. He said there had been an attempt to remove him as a director of the respondent in July 2023, but that had not succeeded, and he remained listed as a director of that company at Companies House. He also retained his shareholdings in the respondent and the Senegalese company.[43]The claimant said that the shop in Dakar was still a going concern and continued to trade. It sold solar panels and various accessories and cables. I noted the video of 15 January which showed the Dotcable shop stocked with various products. He said he also continued to attempt to resolve the outstanding issues with the Senegalese Government Ministry to obtain the licence for the solar power plant.[44]I asked the claimant about the practical day to day issues concerning his employment. He said he did not communicate at all with Mr Kostrz or the respondent company and did not account to anyone from the Dotcable companies. He referred to a letter from the respondent’s solicitor dated 23 February 2023 which had asked that he did not contact Mr Kostrz directly (pages 60 & 61 of the Main Bundle). However, the claimant said he had all the 6 of 8 relevant reports/accounts available if needed. He accepted that the shop was running at a loss and the business was struggling but said this was also a feature of business in general in Senegal at present.[45]I asked the claimant how he managed to survive financially if the respondent was not paying him any salary etc; he said he was being supported by friends and family. The claimant accepted that it was an unusual situation to be running the business and effectively working for the respondent, even though he was not being paid, but he noted that he still had a shareholding in the Dotcable companies and that he had no other choice.[46]I found the claimant to be a credible witness and note that he readily agreed to supply additional evidence concerning the business in Senegal when requested to do so. I find that the respondent has not paid the claimant any salary, expenses or accommodation allowance from July 2023 to September 2024. I find that the claimant has demonstrated on a balance of probabilities that he is still employed and running the shop in Dakar, and therefore, those sums are properly payable to him.[47]The respondent did not attend and did not present any additional evidence. There was no evidence presented by the respondent to show that the claimant was paid the National Minimum Wage from July 2023 to date. Indeed, there was no evidence presented by the respondent at all. Conclusions Claimant’s Amendment Application[48]I allowed the claimant’s application to amend his claim for the period from October 2024 to the date of the hearing (ie 16 January 2025). As noted by EJ Hopton in November 2024, the amendment only expands the claim to include wages that the claimant says he ought to have been paid since the time he put in his claim form. It therefore involves the same law and facts as already specified in the claim.[49]The alternative would be for the claimant to present a new ET1 for the claims which have arisen since September 2024. This would require a new ET3 from the respondent. This would cause additional time and cost for both the parties and the tribunal. There has already been considerable Tribunal time (see Background) spent on this claim.[50]There is therefore very little prejudice to the respondent in allowing this amendment, and there would be significant prejudice to the claimant in refusing it. The balance of hardship and injustice therefore favours the claimant. (Vaughan v Modality Partnership [2020] UKEAT/0147/20). Further, the respondent was not present to make any comments on the amendment. Tribunal Award[51]The claimant is owed by the respondent - Salary - £1400 per month (gross) for the period March 2023 to 16 January 2025; - Expenses - £1100 per month (gross) for the period April 2022 to 16 January 7 of 8 - Accommodation allowance- £300 per month (gross) for the period April 2022 to 16 January 2025. - The claimant is also owed the “shortfall” between these sums and the amount of the National Minimum Wage from April 2021 to 16 January 2025. Calculation of sums owed by the respondent (Gross Figures)[52]The sums are as follows: - Salary -£30,100 (March 2023 to date) - Expenses - £37,950 (April 2022 to date) - Accommodation Allowance - £10,350 (April 2022 to date) - National Minimum Wage “shortfall” - £15,560 (April 2021 to date) - Total Award £93,960. The respondent must account to HMRC for income tax and National Insurance Contributions payable on this sum.[53]The respondent did not present any evidence regarding the amounts sought by the claimant or provide a Counter Schedule of Loss.[54]As regards the claimant’s updated Schedule of Loss, I explained that the Tribunal could not award him compensation as part of his claims for his solicitor’s fees or his travel costs to the UK for the hearing.[55]I explained that he could make an application for costs against the respondent (which may cover these sums) but he would have to show that the respondent’s conduct was unreasonable in the way they had conducted the proceedings, and the costs award was in the Tribunal’s discretion. I referred the claimant to Rules 72-82 relating to costs orders in the Employment Tribunal Rules of Procedure 2024. The claimant has 28 days from the date on which this Judgment is sent to the parties to make a written application for costs if he so wishes.[56]I also explained that compensation for Injury to Feelings could only be made in discrimination claims and so was not relevant in this claim.