Mr A S Stoica v 4Site Recruitment Ltd: 2222831/2024
JUDGMENT
[1]The complaint in respect of holiday pay is well-founded. The respondent made an unauthorised deduction from the claimant's wages by failing to pay the claimant for holidays accrued but not taken on the date the claimant’s employment ended. The respondent shall pay the claimant £380.60 (gross) and account to HMRC for any tax and National Insurance due.[2]All other complaints in the claim are not well-founded and are dismissed. JUDGMENT having been sent to the parties on 26 September 2024 and written reasons having been requested by the claimant on 26 September 2024, in accordance with Rule 62(3) of the Rules of Procedure 2013, the following reasons are provided: Introduction[1]By a claim form dated 26 June 2024, the claimant brought a complaint of unauthorised deduction from wages with respect to his wages and holiday pay. In his ET1 the claimant also ticked the boxes “notice pay” and “other payments”. In the short narrative in box 8.2 the claimant complained that he had not been paid the correct amount of his hourly rate, and that the respondent had assigned an incorrect tax code to him, as a result of which more tax had been deducted from his wages than he thought ought to have been. In box 9.2 the claimant stated that he seeks compensation in the amount of £2,000 “for robbering (sic), lying, fraud”.[2]In box 1.11 the claimant ticked “Yes, I can take part in video hearings” to the question: “Would you be able to take part in hearings by video and phone?”[3]On 11 July 2024, the Tribunal sent to the parties Notice of Final Hearing by Video on 20 September 2024 at 10am. Standard “short track” directions were given in the Notice.[4]On 18 July 2024, the respondent presented a response contesting the claim. The respondent contended that it had paid the claimant all his wages based on the agreed contract rate of £13.79 per hour and applied such tax code as it had been given by HMRC on a weekly basis. The respondent contended that the agreed rate of £13.79 per hour included “rolled-up” holiday pay.[5]On 22 August 2024, the Tribunal issued “response accepted” letter, which promoted the claimant to send several impertinent emails, accusing Tribunal’s administrative staff of breaching law and threatening to “press charges”.[6]On 27 August 2024, Employment Judge Snelson wrote to the claimant as follows: “Your message is not understood. The response was due on 6 August and received on 17 July 2024.”[7]On 16 September 2024, the claimant applied to have the hearing converted to an in-person hearing. He did not give reasons, other than saying that he did not want to participate in a video hearing. He then sent several impertinent emails chasing his request, threatening to report the Tribunal’s administrative staff for misconduct and “engage enforcement authorities”.[8]On 18 September 2024, the respondent objected to having the hearing converted to an in-person hearing, because “the way the claimant [had] interacted with [the respondent’s] staff previously, aggressive, rude, threatening [the respondent’s representative] would not feel comfortable in his presence”.[9]On 19 September 2024, Employment Judge Baty refused the claimant’s application. In refusing the claimant’s application, EJ Baty gave the following reasons: “The claimant's application of 16 September 2024 to convert the video hearing listed for 20 September 2024 to an in-person hearing is refused for the following reasons. Firstly, the application is made very late. Secondly, the issues of the claim are very simple and self-contained, and hearings of that nature are by default held by video, particularly given the constraints on the tribunal as a result of it having a limited number of in-person tribunal rooms and a large number of in-person hearings to be heard. Thirdly, the claimant gives no reason as to why the hearing should be converted from a video hearing to an in-person hearing. Fourthly, the respondent objects. In this context, the respondent states that it would prefer a video hearing "given the way the claimant has interacted with our staff previously, aggressive, rude, threatening I would not feel comfortable in his presence". The respondent previously referenced, in its response to the claimant's claim, concerns which it had about the claimant's interaction with its staff. Furthermore, the claimant's recent emails to the tribunal staff have been rude and abusive. They are indicative that the respondent's concerns may well be justified. These are powerful reasons as to why it would be in the interests of justice for the hearing to remain one which takes place by video. The hearing, therefore, remains listed to take place by video and the parties will be sent the link to the hearing room at some point on the evening prior to the hearing. It is also important to stress that the claimant's behaviour in his email correspondence with the tribunal’s administrative staff has, as noted, been rude and abusive. This is entirely unacceptable, and the claimant must desist from communicating in this manner immediately. The claimant should be aware that, if a party to a claim behaves unreasonably, the tribunal has the power to strike out that party’s claim. The same applies to the way he conducts himself at any hearing.”[10]Shortly after the EJ Baty’s order was sent to the parties, the Tribunal sent to the parties the joining instructions for the video hearing. In response to that, the claimant sent another set of ill-tempered emails, containing the following statements: “It shoilrbe must be face to face video not by phone” “That's what you guys told me that. Now it's on the phone. First I didn't got agreed to have video call” “I already told you that from the start of the claim. Why you neglijent my claim?” “I want to be face to face and I dontcare what you want. It's that clear? This misconduct I don't tolerate. Thisis so ridiculous.” “I'll press charges for this” The hearing[11]Both parties joined the hearing by video. There were no connectivity or other technical problems. The quality of video and audio streams was good.[12]The claimant did not raise any issue with the hearing being by video. The claimant’s conduct at the hearing was appropriate. However, shortly after the hearing had finished, he resumed sending impertinent emails to the Tribunal.[13]The claimant represented himself at the hearing. Mr Gilmour appeared for the respondent. I had several documents submitted by the parties for the hearing. These included email and WhatsApp exchanges between the claimant and respondent, the claimant’s payslips, his P45, printouts from the respondent’s payroll system, showing payments made to the claimant during his short employment with the respondent.[14]At the end of the hearing, after I had announced my judgement, the claimant asked about his claim for £18,138.40, recorded in his schedule of loss. I was unable to find the claimant’s schedule of loss in the Tribunal’s electronic file. However, I asked the claimant to explain on what basis he was claiming that amount. The claimant said that he was claiming compensatory award for unfair dismissal, injury to feelings, and 25% uplift for failure to comply with the ACAS Code of Practice. I have since located a copy of his schedule of loss. It conforms with what the claimant had told me at the end of the hearing.[15]I explained to the claimant that there was no complaint of unfair dismissal before this Tribunal, and, in any event, he did not have the necessary length of service with the respondent to bring such a complaint. I also explained that an injury to feelings award was not available in claims for unauthorised deduction from wages, and that on the facts of his case the ACAS Code of Practice did not apply (there was no grievance raised by the claimant, or a disciplinary process initiated by the respondent, the claimant left the employment on his own volition).[16]Finally, I explained to the claimant that the Tribunal did not have jurisdiction to deal with tax code issues, and if he disagreed with the assigned tax codes he needed to discuss this matter with HMRC. The Facts[17]The claimant worked for the respondent as a labourer from 8 May 2024 until 21 June 2024, when he resigned by conduct without notice. Initially, until 17 May 2024, he was engaged as a self-employed contractor at an hourly rate of £15.26 (gross), with the claimant being responsible himself for tax and NI payments.[18]On 17 May 2024, upon the claimant’s request, the arrangement was converted to one of employment with tax and NI deducted at source by the respondent on a PAYE basis. The new rate of £13,79 (gross) was agreed.[19]The respondent’s standard terms of the “Agreement For the Engagement of Temps (PAYE)” state: 8. Statutory Leave 8.1. Entitlement to leave commences on the date that Temporary Worker starts an Assignment or a series of Assignments and for the purposes of this clause, the leave year commences on 1st January to 31st December following. 8.2. Under the Working Time Regulations 1998, Temporary Worker is entitled to 5.6 weeks paid leave per leave year (equivalent to 28 days for those working a 5-day week). This will be paid weekly in an addition to the quoted hourly rate. For the avoidance of doubt 12.07% will be added to the quoted hourly rate and paid with the temporary workers weekly pay.[20]On the balance of probabilities, I find that the standard terms were not signed by the claimant or expressly brought to his attention. I say that for the following reasons.[21]The respondent did not disclose the standard terms signed by the claimant. In his ET1, the claimant says: “I never get the contract from them neither today 26/06/2024 what Hasko lied to me he already send it to me by email. And he don't want to send it to me again because I told him I didn't receive it.” The WhatsApp exchange, disclosed by the respondent, in which the PAYE rate of £13.79 was agreed, does not appear to have the terms attached or referred to. Mr Gilmour said that the rolled-up holiday arrangement would have been explained to the claimant in a telephone conversation with one of the respondent’s staff, but no evidence was presented by the respondent about that telephone conversation. The claimant denied having such a telephone conversation with the respondent’s staff.[22]The claimant had been paid for all the hours worked at the agreed rate of £13.79 (gross), which included the rolled-up holiday pay (at 12.07% of the base rate of £12.30). Each payslip identified base rate as £12.30, hours worked, total hourly pay, and holiday pay as a separate line item. The total payment was the sum of the total hourly pay and holiday pay. Income tax and National Insurance deductions were identified under “Deductions”.[23]The claimant stopped working for the respondent on 21 June 2024 without giving any advance notice.[24]On 27 June 2024, the respondent issued the claimant P45.[25]Upon termination of the claimant’s employment the respondent did not pay the claimant any additional sum for accrued but not taken holidays. The Law Rolled-up holiday pay[26]Under Reg 14(1) and (2) of the Working Time Regulations 1998 (“WTR”) a worker is entitled to a payment in lieu where: i. his or her employment is terminated during the course of the leave year, and ii. on the termination date, the proportion of statutory annual leave he or she has taken under Regs 13 and 13A is less than the proportion of the leave year that has expired.[27]In Robinson-Steele v RD Retail Services Ltd and two other cases 2006 ICR 932, ECJ, the European Court of Justice (“the ECJ”) held that Article 7 of the Working Time Directive: “precludes the payment for minimum annual leave… from being made in the form of part payments staggered over the corresponding annual period of work and paid together with the remuneration for work done, rather than in the form of a payment in respect of a specific period during which the worker actually takes leave”.[28]The ECJ further said that “Member States are required to take the measures appropriate to ensure that practices incompatible with Article 7… are not continued”. The ECJ, however, also stated that Article 7 did not preclude employers setting off genuine holiday payments paid under the rolled-up method against a worker’s entitlement to payment when he or she actually takes leave. However, such sums had to have been paid “transparently and comprehensibly, as holiday pay”. The burden is on the employer to prove such transparency and comprehensibility.[29]In Smith v AJ Morrisroes and Sons Ltd and ors 2005 ICR 596, EAT, the EAT stated that, for an employer to be given credit for rolled-up holiday payments, “there must be mutual agreement for genuine payment for holidays representing a true addition to the contractual rate of pay for time worked”, which should normally be evidenced by: i. the provision for rolled-up holiday pay being clearly incorporated into the contract of employment, ii. the amount allocated to holiday pay being identified in the contract and preferably also in the payslip, and iii. records being kept of holidays taken and reasonably practicable steps being taken to ensure that workers take their holidays.[30]The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (“the Amendment Regulations 2023”), which amended the WTR and reversed the position established by the ECJ’s decision in Robinson-Steele, allow employers of “irregular hours worker” to pay such workers their annual leave entitlements by way of an uplift to the worker’s pay at the time of accrual rather than by paying the holiday pay in the period that the leave is taken - 15B-F, 16A. However, these provisions apply for leave years starting on or after 1 April 2024. Unauthorised deduction from wages[31]Under section 13(1) of the Employment Rights Act 1996 (“ERA”): “An employer shall not make a deduction from wages of a worker employed by him unless—(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.”[32]Section 13(3) ERA states: “Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.”[33]“Wages” are defined in section 27 ERA and includes holiday pay -s. 27(1)(a).[34]Section 23 ERA gives a worker the right to complain to an Employment Tribunal of an unauthorised deduction from wages. If a Tribunal finds a complaint well founded, it must make a declaration to that effect and must order repayment of the deduction(s) made in full – s.24(1)(a). Analysis and Conclusions[35]The claimant’s leave year started on 1 January 2024. Therefore, the rolling-up provisions in the Amendment Regulations 2023 do not apply to the claimant’s annual leave pay entitlement. I, therefore, must analyse whether the rolled-up arrangements operated by the respondent was lawful by reference to UK domestic law prior to the Amendment Regulations, namely the requirements set out by the EAT in Smith v AJ Morrisroes and Sons Ltd.[36]While I accept that the claimant’s holiday pay has been properly identified in the pay slips and it was a “genuine payment for holidays representing a true addition to the contractual rate of pay for time worked”, for the reasons set out in my factual findings (see paragraphs 20 & 21 above) I do not accept that there was a mutual agreement that the agreed rate of £13.79 included an addition of 12.07% of holiday pay.[37]It follows, that the rolled-up holiday arrangement that the respondent purported to implement was legally ineffective. Consequently, upon termination of his employment with the respondent the claimant was entitled pursuant to Reg 14 of the WTR to receive a payment for his accrued but not taken annual leave.[38]By failing to make such a payment, the respondent has made an unauthorised deduction from the claimant’s wages and must pay the claimant the sum so deducted.[39]I have calculated the claimant’s accrued holiday entitlement, using the government online calculator at: https://www.gov.uk/calculate-yourholiday-entitlement as 0.69 weeks.[40]Based on the claimant’s payslips and P45, I have calculated the claimant’s average full weekly pay as £551.69 (gross). Accordingly, the respondent must pay the claimant the sum of £380.60 (gross), being £551.69 x 0.69.[41]Because the claimant was not dismissed but left the respondent’s employment himself without notice (essentially resigning by conduct with immediate effect), he is not entitled to any notice pay.[42]For the reasons explained above (see paragraphs 14 - 16) the claimant is not entitled to any other compensation or other remedies.