Miss C Gigli v The Nail and Beauty Zone Ltd (T/a Pure Spa & Beauty): 2223838/2024
JUDGMENT
[1]The Claimant’s complaint of unauthorised deductions from wages is well-founded. The Respondent made an unauthorised deduction from the Claimant’s wages in the period 18 March 2024 to 19 April 2024.[2]The Respondent shall pay the Claimant the gross sum of £1,284.38 which is the gross sum deducted. The Claimant is responsible for the payment of any tax or National Insurance.[3]The Respondent failed to give the Claimant written itemised pay statements as required by section 8 Employment Rights Act 1996 in the period 1 April 2024 to 30 May 2024.[4]The Respondent made unnotified deductions totalling £315.63 from the pay of the claimant in the 13 weeks prior to presentation of the claim form. The respondent shall therefore pay the Claimant £315.63 in respect of those deductions.[5]The total amount due from the Respondent to the Claimant is £1,600.01. Case No: 2223838/2024[6]The Claimant’s claims in respect of unlawful deductions in respect of training costs, holiday pay and commission are dismissed upon withdrawal.[7]The Respondent’s counterclaim is dismissed. The Tribunal has no jurisdiction to hear it.REASONS
[1]The Claimant was employed by the Respondent as a therapist from 19 December 2023 until her resignation on 19 April 2024.[2]The complaints presented in the Claimant’s ET1 of 31 July 2024 were as follows:a. Unauthorised deduction from wages in respect of unworked notice period;b. Unauthorised deduction from wages in respect of training costs;c. Unauthorised deduction from wages in respect of holiday pay;d. Unauthorised deduction from wages in respect of commission;e. Failure to provide payslips in April and May 2024 and a P45 upon termination of employment.[3]The Claimant said that it no longer wished to pursue its claims for unauthorised deduction from wages in relation to training costs, holiday pay and commission as it had since received a sufficient explanation from the Respondent regarding these matters. The Tribunal reminded the Claimant that the claims cannot be reinstated and accordingly the claims were dismissed upon withdrawal.[4]In its response, the Respondent stated that it was entitled to make deductions from the Claimant’s wages because the Claimant had not worked her notice period and that this was authorised by the employment contract. The Respondent further claimed that the amount deducted did not cover the total loss suffered by the Respondent and wished to make a counterclaim for the outstanding amount that had not been recovered.[5]Employers are restricted to the right to make a counterclaim in those cases in which a former employee brings a breach of contract claim against them. An employer cannot bring a breach of contract claim against an employee unless the employee has bought a claim which includes a complaint of breach of contract. In this case, the Claimant’s claims are for unlawful deduction from wages. Therefore the Tribunal does not have jurisdiction to consider this claim and it is dismissed. Case No: 2223838/2024[6]The Tribunal heard evidence on affirmation from Ms Gigli (the Claimant) and Mr Lumsden (a director on behalf of the Respondent). Neither witness had provided a witness statement, however each witness confirmed that their ET1 or ET3 (as appliable) would serve as their evidence in chief.[7]There was also a bundle of 69 pages.Issues
[8]The issues to be determined by the Tribunal were as follows:a. Had there been an unlawful deduction from the Claimant’s wages contrary to section 13(1) of the ERA?b. If so, should the Respondent be ordered to pay the Claimant the amount of any such deduction in accordance with section 24(1) of the ERA.c. Did the Respondent fail to provide written pay statements to the Claimant in April 2024 and May 2024?Findings of Fact
[9]Both witnesses gave evidence to the Tribunal and there was very little difference between the factual events leading to the claim. Having considered the evidence and the submissions on each side, I make the following findings of fact.[10]The Claimant was employed as a therapist by the Respondent from 19 December 2023 to 19 April 2024.[11]The Claimant’s contract of employment (the “Contract”) stated that she would work 40 hours per week and that her pay would be £12.50 per hour. Her notice period was one month. A copy of the Contract was provided at pages 31-27 of the bundle.[12]The Contract included a provision in relation to the Respondent being permitted to make certain deductions from the Claimant’s salary as follows: “You authorise the Company to deduct from your salary including final salary any sums due from you to the Company, including but limited to any overpayment of salary, commission, bonus, training costs, incentive, expenses, no notice period penalty, payment for hours not worked and payment for holidays taken in excess of entitlement.”[13]The Contract also included a provision setting out the ‘notice period penalty’ referenced in the above clause (the “No Notice Clause”), as follows: “If you fail to provide the Company with the required notice period as set out above, the Company reserves the right to deduct a day’s pay for each day that you fail to provide from your final salary or any salary period that falls during your notice period.” Case No: 2223838/2024[14]On 19 April 2024, the Claimant resigned from her role. Her resignation was given orally to another member of staff, Eleanor. The Claimant did not work her notice period.[15]On 30 April 2024, the Claimant did not receive her final pay. No P45 was issued and Claimant did not receive a payslip.[16]On the same day, the Claimant asked her manager by text message for more information and was told it would be looked into but no response was forthcoming.[17]On 12 May 2024, the Claimant raised a formal grievance by email in relation to her unpaid hours. Ellen Blunsdon acknowledged the Claimant’s grievance on 28 May 2024 and said she was looking into the matter and would let Claimant know the outcome of her investigation as soon as possible. Again, no response was forthcoming.[18]On 30 May 2024 notified ACAS regarding her potential claim.[19]On 4 July 2024, the Respondent provided the Claimant with a payslip dated 31 May 2024. The payslips stated that the total gross pay due to the Claimant was £1,600. This comprised £1,500 in relation to ‘Monthly Hours’ and £100 in relation to ‘Holiday Hours’. Deductions totalling £1,600.02 were also made. This comprised £315.63 in respect of ‘Training Costs’ and £1,284.38 for ‘Hours Not Worked’. The May payslip indicated a payment due from the Claimant of £0.01. The amounts set out in the May payslip (page 41) were not disputed by the parties.[20]The Respondent said it was entitled to make the deductions because the Claimant had not provided the required one month’s notice. He also said the actual amount that should have been deducted was greater than the Claimant’s final salary accordance with the Contract.[21]The Claimant did not dispute the existence of the terms regarding authorised deductions in the Contract and was aware of the No Notice Clause, but argued that this particular clause was a penalty and therefore unenforceable. The Law Unlawful deduction from wagesThe Law
[22]Part II of the Employment Rights Act 1996 (ERA) sets out the statutory prohibitions on deductions from wages. Section 13(1) contains the general prohibition as follows: “(1) 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.” Case No: 2223838/2024[23]Although a deduction may be lawful under the ERA where the worker has given her written consent or agreement, there is a common law rule that any fine or deduction should be a genuine pre-estimate of the loss suffered by the employer as a result of the employee’s breach and that anything in excess of this is regarded as a penalty, which is void at common law (Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd 1915 AC 79, HL).[24]It was held in Giraud UK Ltd v Smith 2000 IRLR 763, EAT, that a term in the employee’s contract allowing his employer to deduct a sum from his final payment in the event that he failed to give notice and work out his notice period was held to be a penalty clause as it was not a genuine pre-estimate of the loss that the employer could suffer in the event of the employee’s breach.[25]A similar issue arose for consideration in Yorkshire Maintenance Company Ltd v Farr EAT 0084/09 — namely, whether a contractual provision allowing for a deduction from wages was unenforceable as a penalty clause. F’s claim for damages for his wrongful dismissal (ie breach of contract for his notice pay) following his dismissal for gross misconduct was unsuccessful, but the employment tribunal decided that he was entitled to accrued pay which had been withheld by YMC. In accordance with a clause in F’s contract of employment, the employer had argued that it was entitled to make deductions from his wages because he had failed to comply with a contractual requirement to obtain the signature of clients as proof of work done. On YMC’s appeal, the Employment Appeal Tribunal (“EAT”) held that contractual terms like this should be subject “to a considerable degree of scrutiny” due to the possible disparity in economic power between employers and employees, and the potential for abuse by an employer of such power. Moreover, courts had to be alert to employers being judge and jury when they had included in a contract of employment an express term requiring an employee to repay certain costs and expenses. The EAT referred to the guidance contained in Giraud UK Ltd v Smith (above) on the distinction between a penalty and a genuine pre-estimate of loss.[26]A sum deducted under a penalty clause cannot be a lawful deduction under Section 13 of the ERA (Cleeve Link Ltd v Bryla 2014 ICR 264, EAT) Failure to provide written pay statements[27]All employees have a right to be given written payslips under section 8 ERA 1996. This states: “ A worker has the right to be given by his employer, at or before the time at which any payment of wages or salary is made to him, a written itemised pay statement.”[28]Section 8(2) of the ERA provides what particulars must be included in that itemised pay statement.[29]By section 11 of the ERA provides a worker may bring a claim to an Employment Tribunal if an employer has failed to comply with section 8 in providing an itemised wage statement and the worker may seek a determination of what particulars ought to have been given. Case No: 2223838/2024 Conclusion Unlawful deduction from wages[30]There was no dispute about what was properly payable or that the Respondent had made a conscious deduction from what was payable. The issue was whether that deduction was authorised by a relevant provision of the Contract.[31]The Respondent relied upon the No Notice Clause to show that the deduction was authorised. The Claimant did not dispute that she had not given the notice required. Such failure was among the list of things set out in the Contract for which the Respondent reserved the right to make deductions from salary.[32]I considered the application of the law to this case. Specifically, I reflected on Mr Lumsden’s claim that the Claimant would generate approximately £3,000 in revenue per month, though no supporting evidence was provided. He also mentioned the challenge of covering staff absences on short notice, which required relocating staff from different sites. Again, no evidence was submitted to substantiate this claim. I also considered Mr Lumsden’s argument regarding the difficulty of replacing staff in the beauty industry, referring to various online articles (pages 59 to 68) and his statement that beauty therapists are skilled professionals with several years of training and formal qualifications.[33]I then weighed up Mr Lumsden’s submissions against the Claimant’s statement that staff frequently failed to show up for work and were regularly reassigned to cover shifts. The Claimant also argued that the articles presented by Mr Lumsden were of limited relevance, and if Miss Gigli had been a skilled employee, she would have been paid more than minimum wage for her services.[34]The circumstances of this case are very similar to the Giraud case. There is no evidence to support either(a) the losses incurred and(b) proper quantification of those losses after the Claimant resigned or whether those losses were greater or less than the sum calculated by the Respondent. Rather this clause appears to serve as a deterrent to an employee from leaving without giving notice.[35]Whilst I have no doubt that the Respondent had a commercial interest in enforcing the requirement for employees to work out their notice, and that any business may be exposed to a potential risk of loss where an employee leaves without notice in light of the difficulties with hiring staff, following the decision in Giraud, I find that the clause is a penalty clause and is therefore not enforceable. Failure to provide written pay statements[36]The Respondent did not dispute the failure to provide the Claimant with a payslip in April or P45 and could not offer any explanation for doing so. He was also unable to provide an explanation for why the May payslip was only provided in July once the Claimant had involved ACAS. Case No: 2223838/2024[37]Accordingly I find that the Respondent failed to provide the Claimant with written pay statements in April and May and P45 on termination of employment.Remedy
[38]During the hearing I advised the parties that depending on my decision in the case, it may be necessary to list a further hearing to determine remedy. However at the outset of the hearing the Claimant and the Respondent agreed that the May payslip (page 41) set out the relevant payments and deductions made. Accordingly, I find that I am able to give judgement on remedy and do so as follows. Unlawful deduction of wages[39]It was not disputed that the amount deducted in respect of hours not worked was £1,284.38. Consequently an award is made in favour of the Claimant in respect of this sum. Failure to provide written pay statements[40]Compensation for a failure to provide payslips is limited to the amount of any unnotified deductions within the previous 13 weeks.[41]The deduction in relation to unworked hours is dealt with in paragraph 39 above and consequently no further sum is due in this regard.[42]The deduction of £315.63 in relation to the training costs was not notified to the Claimant and accordingly I make an award in this amount in favour of the Claimant. _____________________________ Employment Judge Yardley Date: 9 October 2024The Law
[47]Accordingly, I recommend to Tribunals who consider such a clause in future that they may wish to think carefully, in the light of the evidence before them in the particular case, whether the parties actually intended a clause such as this to operate as a penalty clause, liquidated damages clause, or simply as a provision that entitled the employer to withhold pay for the period of time not worked during notice. All will, of course, depend upon the particular conclusions and the particular facts, contracts of employment being individual.34. The Supreme Court also considered the issue of penalty clauses in Cavendish Square Holding BV v Makdessi and another case (Consumers’ Association intervening) 2016 AC 1172, SC.35. Although not an employment case, the decision reconsidered the test in Dunlop and which has been followed in employment cases. The Supreme Court clarified that the factors distinguishing between a genuine pre-estimate of loss on the one hand, and a penalty on the other, are simply considerations that may not apply in every case and are not necessarily helpful in more complex cases where a broader test is justified — namely, those cases where the innocent party’s interest in performance extends beyond the prospect of financial compensation for the breach. Case No: 2223838/202436. However, it is notable that Lords Neuberger and Sumption, who together gave the leading judgment in Cavendish Square, considered the law as it applies to parties of ‘comparable bargaining power’. Such is not the case in most employment relationships, and it is therefore arguable that the Court’s reformulation of the test is not intended to apply to contracts of employment. Failure to provide written pay statements37. All employees have a right to be given written payslips under section 8 ERA 1996. This states: “ A worker has the right to be given by his employer, at or before the time at which any payment of wages or salary is made to him, a written itemised pay statement.”38. Section 8(2) of the ERA provides what particulars must be included in that itemised pay statement.39. By section 11 of the ERA provides a worker may bring a claim to an Employment Tribunal if an employer has failed to comply with section 8 in providing an itemised wage statement and the worker may seek a determination of what particulars ought to have been given.40. Section 12(4) ERA 1998 provides that where the Tribunal finds that any unnotified deductions have been made from pay during the period of thirteen weeks immediately preceding the date of the application (whether or not the deductions were made in breach of the contract of employment), the Tribunal may order the employer to pay a sum not exceeding the aggregate of the unnotified deductions so made.41. In Cambiero v Aldo Zilli and Sheenwalk Ltd t/a Signor Zilli’s Bar (EAT 273/96), the Employment Appeal Tribunal (EAT) ruled that the employer had committed more than a mere "technical" breach despite eventually providing the necessary pay statements after the employee initiated tribunal proceedings. The EAT found the tribunal's earlier decision perverse and unsupported by evidence, noting that the employer failed to offer a satisfactory explanation for not informing the employee about the deductions. Additionally, the employer caused the employee undue effort to determine the amounts deducted. As a result, the EAT deemed it appropriate to impose the maximum penalty allowed under Section 12(4). Conclusion Unlawful deduction from wages42. There was no dispute about what was properly payable or that the Respondent had made a conscious deduction from what was payable. The issue was whether that deduction was authorised by a relevant provision of the Contract.43. The Respondent relied upon the No Notice Clause to show that the deduction was authorised. The Claimant did not dispute that she had not given the notice required. Such failure was among the list of things set out in the Case No: 2223838/2024 Contract for which the Respondent reserved the right to make deductions from salary.44. I considered the application of the law to this case.45. The burden of proof to establish that an arrangement constitutes a penalty clause rather than a valid liquidated damages clause rests with the party alleging that such an arrangement is unenforceable, in this case, the Claimant.46. As set out on pages 53 to 54 of the bundle, the Respondent sought to deduct the sum of £2,000 from the Claimant for her failure to work her one month notice period. This was calculated by the Respondent to be £2,000 (4 weeks x 40 hours x £12.50). 47. First, the Tribunal considered the wording of the Contract to establish to what breach of contract the deduction of wages applied.Conclusion
[48]It was common ground that the No Notice Clause provided that if the Claimant did not provide the Company with the required notice period that the Company had the right to deduct a day’s pay for each day that the Claimant failed to work. It was also common ground that the Claimant had not worked any of her contractual notice period.[49]It was the Claimant’s submission however that the Notice Clause was insufficiently clear and did not explain how a “day’s pay” would be calculated and that a “day’s pay” could not apply to the Claimant as she was paid on the basis of the number of hours worked rather than on a day rate.[50]The Claimant further submitted, relying on paragraph 13 of the original decision in Giraud, that the amount deducted by the Respondent bore no relation to the actual loss suffered by the Respondent because it was relatively easy for the Respondent to find an alternative therapist and therefore it could not be a genuine pre-estimate of loss and must be a penalty.[51]The Claimant evidenced this with reference to the number of hours worked each month as set out in the Claimant’s payslips from January to March 2024 and that the number of hours worked fluctuated each month. In oral evidence, Ms Gigli said that her actual utilisation varied and she was typically busier on weekends than during the week. From this, the Tribunal inferred that Ms Gigli was not fully utilised on every working day.[52]The Claimant also submitted that therapists were easy to replace. It said that therapists were not highly skilled and that this was reflected in their low wages. The Claimant said that it was not difficult to hire therapists, that it was free to place a job advert on a website and that the Claimant herself had been recruited very quickly by the Respondent following her response to such an advert.[53]The Respondent refuted the Claimant’s submissions that therapists were easily to replace and sought to distinguish Giraud on this point. He referenced the recruitment challenges faced by the beauty industry and Case No: 2223838/2024 explain ed that the hiring period was lengthy and that skilled beauty therapists with training and formal qualifications are in demand. This was different to the case of Giraud where the employee was a driver, unskilled and could be replaced easily.[54]To support its submission, the Respondent referred to an online article from Spa Business which contained data from the UK Spa Association in June 2024 regarding the number of vacant therapist positions and how long the position had been vacant. It also provided an article from a website (https://mimx.co.uk/) which talked about the struggles of UK based beauty salons in 2024. In oral evidence, Mr Lumsden said that the Respondent had spent around £15,000 in the past year with Indeed (a recruitment agency) to help find staff.[55]Whilst the articles provided by the Respondent was helpful contextual background regarding the challenges in the recruitment industry, it did not evidence the position as it related to the Respondent itself. No evidence regarding the Respondent’s specific attempts to recruit a replacement for Ms Gigli were advanced and it was not clear when and if, Ms Gigli had been replaced.[56]The Tribunal also considered Mr Lumsden’s evidence regarding how the business operated in the event that a therapist is unavailable to work.[57]It was Mr Lumsden’s evidence that if an employee is unavailable on short notice, for example they are sick, then it is possible to move staff around to cover absences. He said that the business operates at more than one location and if required, he can move staff from one location to another to cover an absent employee, conceding that this can be inconvenient. The Claimant also confirmed that this is what happened in practice and that certain members of staff regularly didn’t turn up for work.[58]The Tribunal therefore concluded that where a therapist is not available, appointments could be covered by another employee. Alternatively if there was no-one available to cover, then the appointment could be rebooked with for a suitable alternative time when a therapist is available. However the Tribunal concedes that in some cases, where there is no alternative therapist available or the customer is unwilling to change their appointment, this may result in a lost sale. It was significant, in the Tribunal’s mind however, that this process would have been the same regardless of the reason why the employee had failed to turn up for work.[59]The Tribunal also considered the Respondent’s submissions regarding the quantum of the financial losses suffered. In oral evidence, the Respondent said that the Claimant generated approximately £2,000 to £3,000 in revenue per month. To support this, it advanced a summary of the number of hours worked and sales generated by the Claimant in the period from January to March 2024 as well as a document setting out the hours that the Claimant was scheduled to work during her notice period.[60]With reference to the figures provided by the Respondent at pages 55 to 57 of the bundle, the Claimant worked an average of 118 hours per month and generated £1,700.73 per month of sales over the period from January to Case No: 2223838/2024 March 2024. This works out as an average hourly sales figure of £14.65 per hour (£1,700.73 / 118) for the Claimant.[61]Assuming that the Claimant had worked all of the scheduled 120 hours that she was supposed to work between 18 March and 19 April 2024, the total sales generated would be estimated at £1,758.40 (£14.65 x 120). Then, deducting the Claimant’s estimated wages for this period of £1,500 (£12.50 x 120), the total sales generated by the Claimant for this period is estimated to be £258.40 (£1,758.40 - £1,500).[62]For these reasons, the Tribunal was not satisfied that the evidence demonstrated that the direct revenue loss was anywhere close to £2,000 per month as it does not factor in the Claimant’s fixed cost (being her hourly wage) which the Respondent would not be expected to pay for given that the Claimant did not work her notice period.[63]It also does not appear to recognise that the revenue generated by the Claimant is directly linked to the actual number of clients that the therapist provided treatments to during her shift and therefore that the actual loss may fluctuate on a daily basis.[64]The Tribunal then considered what the intention of the parties had been at the time they entered into the contract reminding itself that the calculation falls to be made at the date of signing, not at the date of breach (per Dunlop) and accordingly can only be an approximate calculation.[65]In the present case, the Tribunal finds that the Respondent was able to mitigate his loss by utilising other members of staff to cover appointments for the reasons set out above. The Respondent would also mitigate its loss as it would not need to cover the fixed cost of the Claimant’s wages during the unworked notice period.[66]The Tribunal therefore concluded that the estimated sum of £2,000 claimed by the Respondent was likely to be far greater than the actual loss suffered.[67]The fact that the actual loss may have been difficult to calculate as at the date of the contract may lead to a finding that there were good reasons for the parties to agree a ‘day rate’ for any day unworked during the notice period. However, applying the decision in Yorkshire Maintenance Company, contractual terms such as these should be subject “to a considerable deal of scrutiny” due to the possible disparity in economic power between employers and employees, and the potential for abuse by an employer of such power.[68]The Tribunal also had regard to Li v First Marine where the Respondent also sought to distinguish Giraud on the facts. In Li, Longstaff J recommended at paragraph 47, that Tribunals consider whether the parties actually intended a clause such as this to operate as a penalty clause, liquidated damages clause or simply a provision that entitles the employer to withhold pay for the period of time not worked during notice.[69]In particular, Longstaff J at paragraphs 43 to 45, also said that an employment contract should be construed with the reality of employment circumstances in mind. He used the following example: Case No: 2223838/202443. First, an employment contract should be construed with the reality of employment circumstances in mind. If a Tribunal has a contract such as this to construe in future, it should ask itself whether the parties, in enacting a clause such as this, really intended that, if an employee left not having worked the full amount of notice – irrespective of whether the notice was given by the company or the employee – there should be paid by the employee to the employer a sum equal to the amount of time which was not spent working during that notice period, but should have been.44. A different construction may better represent the realities of the workplace. Where salary is paid a month in arrears and the notice period is one month, it would normally be understood as fair between the parties that, if an employee were to leave early during that notice period, she would not be paid for the balance of the period. No work, no pay. Yet she would already be entitled to some payment at the end of the month. It is entirely conceivable in these days, when it is recognised that an employer may not make a deduction from sums otherwise due to an employee without there being express provision in the contract to that effect, that a contract should recognise the lack of entitlement to payment for that period by providing for a deduction from the salary cheque otherwise due at the end of the month, equivalent to the shortfall in the period of notice. Thus work two weeks, get paid for two weeks - but not the four weeks covered by the monthly salary cheque if the period of notice is four weeks.45. This construction would avoid some of the problems which can occur under the clause as this one stands. The clause permits the company only to deduct. It does not entitle the company to receive or demand a payment, nor oblige the Claimant to make one. When Mr Hughes was asked during the course of argument how it would work if, at the end of one salary period a claimant simply upped sticks and left, he acknowledged that, in the event there was no holiday or other payment due to the employee, there would be nothing to deduct the one month’s shortfall from. That, he acknowledged, would put the employer in some difficulty. Similarly, if the employee were summarily dismissed by the employer for proper reason, then there would be no recompense for the employer, although the employee by definition would be at fault in the employer’s eyes. This makes it unlikely that there would be a clause in the contract providing that, if she exercised contractual rights, the employee would have to pay, but if the employee simply did not give notice but instead simply failed to turn up to work, and was dismissed for that reason, the employee would have nothing to pay under this clause.46. Next, I note there is nothing in the language of this clause which suggests, on the face of it, that the company had in mind the additional expenses of recruitment and replacement such as might result from early termination. It is not drafted as if to indicate that the parties had in mind “penalty” or “genuine pre-estimate of loss” at all.[70]Applying this to the facts in the present case, the Claimant was due to be paid on or around 30 April 2024 for the 120 hours properly worked by the Claimant between 18 March 2024 and 19 April 2024 amounting to £1,500.[71]The Claimant was not paid this amount in April 2024 and no payslip was provided to the Claimant in April in respect of this period of work. On the date Case No: 2223838/2024 on which the payment was due, the Claimant (at that point in time) had failed to work for the first 11 days of her contractual notice period. It is not know how many actual working days this equated to as the Tribunal has not been provided with the Claimant’s scheduled working hours for this period. However, on the basis that the Claimant typically worked 5 out of 7 days in each week, taking the Respondent’s claim at its highest, this may have been the equivalent of 9 working days.[72]The Respondent did not provide any reason in evidence as to why the payslip had not been provided or why payment had not been made on 30 April 2024. Rather, the Claimant was only provided with a payslip for May 2024 from which the Respondent deducted as sum in respect of the full notice period.[73]The failure to provide a payslip in April and only provide a payslip in May 2024 is compelling evidence that the Respondent had deliberately withheld the payment due in April 2024 in order to deduct as large an amount as possible from the Claimant’s pay and only when the Claimant had failed to work the full notice period.[74]The Tribunal finds that the decision to withhold sums properly due to the Claimant in April 2024 was deliberately withheld in order that the Respondent could deduct that the maximum amount under the No Notice Clause. Had the Respondent paid the amount due in April 2024, less the days not worked during the notice period, the Claimant would have been entitled to at least some of the compensation owed for the period from 18 March 2024 to 19 April 2024. Further, given the date on which the Claimant left, it would have meant that there would have been nothing to deduct the remaining shortfall from, putting the Respondent in some difficulty as identified by Longstaff J in Li.[75]Taking all of the evidence in the round, the Tribunal finds as follows:a. The Contract specifically refers to the No Notice Clause as a ‘penalty’;b. There are factual similarities between the case of Giraud and the present matter in that the Claimant was easily replaceable for the reasons set out above, thus pointing to a penalty clause rather than a genuine pre-estimate of loss.c. Unlike in Giraud, the clause in this case did seek to limit the Respondent’s loss to a day’s pay for each day not worked by the Claimant during her notice period, it was however still the case that if the actual loss turned out to be nil.d. The loss that the Respondent recovered of £2,000, far exceeded the estimated loss of £258.40 based on the figures provided by the Respondent for the preceding 3 month period.e. The failure to pay the Claimant in April 2024 for any of the work carried out from 18 March 2024 to 19 April 2024 was a deliberate attempt by the Respondent to maximise the amount of the deduction from the Claimant’s wages. Case No: 2223838/2024[76]Whilst I have no doubt that the Respondent had a commercial interest in enforcing the requirement for employees to work out their notice, and that any business may be exposed to a potential risk of loss where an employee leaves without notice in light of the difficulties with hiring staff, For these reasons, the Tribunal concludes that, the No Notice Clause amounted to a penalty rather than a genuine pre-estimate of loss and therefore is unenforceable. Failure to provide written pay statements[77]The Respondent did not dispute the failure to provide the Claimant with a payslip in April or P45 and could not offer any explanation for doing so. He was also unable to provide an explanation for why the May payslip was only provided in July once the Claimant had involved ACAS.[78]The Respondent also only provided the necessary pay statements after the Claimant had notified ACAS regarding her potential claim.[79]Accordingly I find that the Respondent failed to provide the Claimant with written pay statements in April and May and P45 on termination of employment.Remedy
[80]During the hearing I advised the parties that depending on my decision in the case, it may be necessary to list a further hearing to determine remedy. However at the outset of the hearing the Claimant and the Respondent agreed that the May payslip (page 41) set out the relevant payments and deductions made. Accordingly, I find that I am able to give judgement on remedy and do so as follows. Unlawful deduction of wages[81]It was not disputed that the amount deducted in respect of hours not worked was £1,284.38. Consequently an award is made in favour of the Claimant in respect of this sum. Failure to provide written pay statements[82]Compensation for a failure to provide payslips is limited to the amount of any unnotified deductions within the previous 13 weeks.[83]The deduction in relation to unworked hours is dealt with in paragraph 39 above and consequently no further sum is due in this regard.[84]The deduction of £315.63 in relation to the training costs was not notified to the Claimant and copies of the payslips were only provided after the Claimant initiated contact with ACAS, accordingly I make the maximum award allowed under Section 12(4) in this amount in favour of the Claimant. _____________________________ Employment Judge Yardley Case No: 2223838/2024 Date: 28 December 2024Introduction
[85]Accordingly, reconsideration on the ground that the Tribunal discounted oral evidence regarding sales is refused. It would not be in the interests of justice to reconsider the claim on this ground because there is no reasonable prospect of the original judgment being varied or revoked on this ground. Further Grounds A. Strike out of claim regarding failure to provide payslips[86]The Respondent says that the Claimant’s ET1 contains no claim with respect to compensation for failure to provide payslips. It says that it was not given an opportunity to prepare a defence for such a claim and the claim should be struck out.[87]The Tribunal does not agree that the ET1 did not contain a claim with respect to the provision of payslips. The Claimant submitted further and better particulars (F&BP) by way of a separate document with its ET1 form filed on 31 July 2024. At paragraph 2 of the F&BP, it states: Case No: 2223838/2024 “On the 30th April, the date she would usually have received her pay, Miss Gigli did not receive her final pay. No P45 was issued and Miss Gigli did not receive a final payslip.”[88]Paragraph 4 of the F&BP further states: “Unable to obtain any more information or clarity on the reasons why she had not received her pay, a payslip or her P45, Miss Gigli raised a formal grievance with the respondent on 12th May to request an explanation.”[89]At the outset of the hearing, the Tribunal clarified the issues to be determined at the hearing and it was agreed that the Tribunal would consider the issue of whether the Respondent had failed to provide written payslips.[90]In cross-examination, the Tribunal specifically asked the Respondent about the failure to provide the payslips. The Respondent admitted that it did not provide the Claimant with the payslips and was unable to provide an explanation for this.[91]Accordingly, the Respondent, having been unsuccessful in its defence of the claim, has now sought to argue that the claim should be struck out despite being aware of its introduction at the original hearing. Further, or in the alternative, the Respondent has attempted to introduce a justification for why the payslips were not provided. These are new submissions and/or evidence which could have been made at the hearing. By raising these arguments now, the Respondent is attempting to have a “second bite of the cherry”.[92]Accordingly, reconsideration on the ground that the Tribunal should not have considered this claim at the original hearing is refused. It would not be in the interests of justice to reconsider the claim on this ground because there is no reasonable prospect of the original judgment being varied or revoked on this ground. B. Withdrawal of Claims by Claimant[93]In its reconsideration application, the Respondent asserts that, before the hearing, the Claimant sought to amend their claim to exclude allegations regarding unlawful deductions for training costs, holiday pay, and commission, without the Tribunal’s permission.[94]Neither the Tribunal nor the Respondent’s consent is required for the withdrawal of claims. This decision rests solely with the Claimant, who was reminded that withdrawn claims cannot be reinstated, as outlined in paragraph 3 of the Original Judgment.[95]In the reconsideration application, the Respondent also argues that withdrawing the claims related to training costs and commission adversely affected the Respondent. The Respondent has also questioned whether the Tribunal reviewed the original claim form or the revised version.[96]The Respondent further asserts that the Tribunal did not fully assess the original claim and that statements regarding training costs, holiday pay, and commission may conflict with the Claimant's arguments concerning the Case No: 2223838/2024 lawfulness of deductions related to the lack of notice.[97]The Tribunal reviewed the original, unamended ET1 found at pages 2–18 of the bundle. Since the claims for unlawful deductions concerning holiday pay, training costs, and commission were withdrawn, those amounts and matters relevant solely to those claims were disregarded by the Tribunal when determining liability and remedy.[98]The Tribunal does not agree that the withdrawal of claims disadvantaged the Respondent and this is not a ground for reconsideration. If the claims had proceeded, the resulting damages could have been substantially higher. Therefore, the Respondent was not negatively impacted by the withdrawal.[99]Finally, the Respondent contends in its reconsideration application that the Tribunal offered to reschedule the hearing due to the proposed changes in the claim. This is incorrect. The Tribunal offered both parties the option to adjourn the hearing because neither appeared to have received standard directions on submitting witness statements or disclosure. The Tribunal was also concerned regarding the time available for the hearing. Nevertheless, both parties expressed a clear preference to proceed with the hearing, relying on the ET1 and ET3 as their evidence in chief and the Tribunal proceeded on the basis that judgment would be reserved.[100]Therefore, the request for reconsideration on the basis that the Tribunal’s consent was required to withdraw claims is refused. It would not be in the interests of justice to reconsider the claim on this ground because there is no reasonable prospect of the original judgment being varied or revoked on this ground. C. Failure to mention the Claimant’s new job in the decision[101]The Respondent submits that the Claimant began working with a new employer withing 2 days of leaving her job with the Respondent. The Respondent said this point was noted but is not mentioned in the decision.[102]It is not clear on what grounds the Respondent is requesting reconsideration. However the fact that the Claimant began working for a new employer on 21 April 2024 is now stated in the Amended Judgment.[103]Accordingly, reconsideration on this ground is refused. It would not be in the interests of justice to reconsider the claim on this ground because there is no reasonable prospect of the original judgment being varied or revoked on this ground.Conclusion
[104]For the reasons set out above, the Respondent’s application for reconsideration is refused in its entirety.