Mr T Pearson v Africa Professional Services Group Ltd (in voluntary liquidation) and ARAG Legal Expenses Insurance Company Ltd: 2303860/2024
EMPLOYMENT TRIBUNALS
Case No 2303860/2024
Between
Mr T PearsonClaimant(1) Africa Professional Services Group Limited (in voluntary liquidation) (2) ARAG Legal Expenses Insurance Company LimitedRespondent
Before
Employment Judge RamsdenDate 4 July 2025
JUDGMENT
Employment Tribunal Procedure Rules 2024 – Rule 22[1]The name of the Second Respondent is changed from “DAS Legal Expenses Insurance Company Limited” to “ARAG Legal Expenses Insurance Company Limited” in light of the change of name of that entity recorded on the electronic records of Companies House with effect from 15 January 2025.[2]The Second Respondent is the “insured”, the First Respondent is a “relevant person” and the Claimant is a “third party”, each for the purposes of the Third Parties (Rights Against Insurers) Act 2010 (the TPRAI Act).[3]The Claimant presented his claim to the London South Employment Tribunal by a Claim Form dated 29 April 2024.[4]Notice of that Claim was served on the First Respondent on 1 May 2024.[5]While that Claim Form only identified the First Respondent as a respondent to that matter, by Orders dated 10 December 2024, Employment Judge Cawthray added the Second Respondent as a respondent to these proceedings, in light of the context referred to in paragraph 2 above and the decision of the Court of Appeal in the case of Watson v Hemingway Design Ltd [2021] ICR 1034. Case Number: 2303860/2024 2 of 16[6]The Second Respondent was then served with a Notice of Claim on 18 December 2024.[7]Neither Respondent presented a Response to the Claim on the expiry of the time limit in Rule 17 of the Employment Tribunal Procedure Rules 2024 (the ET Rules).[8]The Employment Judge has decided that, pursuant to Rule 22(2) of the ET Rules, a determination can properly be made of the claim, or part of it, on the available material, and finds that: a) The Claimant’s complaint of constructive unfair dismissal, in breach of section 94 of the Employment Rights Act 1996 (the 1996 Act), is wellfounded, and he is awarded £3,715 by way of damages for that complaint, comprising:(i) A basic award of £3,215, calculated on the basis that the Claimant worked for the Respondent for five complete years, his age at the time his employment terminated was 35, and the weekly pay to be used in the statutory calculation was capped at £643 per week. Five weeks’ pay at that statutory cap amounts to £3,215; and(ii) A compensatory award of £500. The Claimant commenced new, more highly-remunerated, employment on 19 February 2024, and so the Tribunal awards him no compensation by way of compensation for lost earnings, but £500 by way of compensation for loss of statutory rights; b) The Claimant’s complaint that the First Respondent made unauthorised deductions from his wages, in breach of section 13 of the 1996 Act, in respect of: (i) Unpaid salary in respect of the period June 2022 to February 2024 is well-founded, and he is awarded damages in the sum of £28,134; (ii) Unpaid holiday, which was due to be paid to him in February 2024 or shortly afterwards is well-founded, and he is awarded damages in the sum of £1,108; and(iii) Unpaid commission is well-founded, and he is awarded damages in the sum of £36,583.33, which relates to commission not paid to him in the period February 2022 to December 2023 (no commission was earned by him in 2024), and the Claimant incurred costs of £6,534 in respect of the First Respondent’s failure to pay his salary, so the aggregate value of the damages awarded to the Claimant in respect of unauthorised deduction from his wages is £72,359.33; and c) The Claimant’s complaint that the First Respondent breached his contract by failing to reimburse him for work-related expenses is well-founded. Case Number: 2303860/2024 3 of 16 Those expenses amounted to £5,890.08 in aggregate, and he incurred costs of £2,030 in respect of the First Respondent’s failure to pay those amounts to him, so he is awarded aggregate damages of £7,920.08 in respect of the First Respondent’s breach of his contract of employment by failing to pay his expenses.[9]In aggregate, therefore, the First Respondent is Ordered to pay to the Claimant the sum of £83,994.41.[10]In light of section 2(3) of the TPRAI Act, and the failure of the Second Respondent to present a Response to the Claim, the Tribunal finds that the Second Respondent is potentially liable to the Claimant pursuant to the legal protection insurance policy taken out by the First Respondent with the Second Respondent, which insures the liabilities of the First Respondent for each of the complaints the Claimant brought against the First Respondent in the Claim, which the Tribunal has concluded are well-founded.[11]The Claimant is responsible for the payment of any income tax and employee’s National Insurance contributions due on any sums paid to him pursuant to this judgment.
REASONS
[12]The Claimant began employment with the First Respondent as its Chief Commercial Officer on 14 October 2018.[13]He earned £80,000 per annum gross, and was entitled to be paid commission based on sales he made.[14]The First Respondent took out various insurance policies, including legal protection insurance with the Second Respondent. That legal protection insurance policy provided insurance coverage in respect of (among other things): “employment disputes: defending [the First Respondent’s] legal rights in respect of any dispute with an employee or an ex-employee relating to their contract of employment or their statutory rights…”; and “compensation awards: basic and compensatory awards, and/or damages arising from a breach of an employee’s or ex-employee’s statutory employment rights under employment legislation”, up to a capped value of £100,000.[15]The First Respondent began to make unauthorised deductions from the Claimant’s wages in June 2022, and while some wages were paid to the Claimant in the period that followed, there was never a three month or more gap between the unauthorised deductions made by the Respondent in the period continuing to Case Number: 2303860/2024 4 of 16 February 2024. These deductions formed a series that began, at the earliest, on June 2022, and ended in February 2024.[16]The First Respondent failed to pay the Claimant the full value of the commission to which he was entitled in respect of 2021, 2022 and 2023, in the aggregate sum of £58,795.[17]The Claimant gave notice to terminate his employment by email on 12 February 2024 so as to terminate that employment on 16 February 2024. In his email of resignation the Claimant made clear that he would be commencing new employment on 19 February 2024.[18]Upon the termination of his employment on 16 February 2024 by reason of his resignation (which the Claimant says was due to the First Respondent’s fundamental breach of the contract of employment between them, by failing to pay him), the Claimant had accrued but not taken 3.6 days of holiday.[19]The Claimant commenced new, more remunerative employment, on 19 February 2024.[20]After a period of ACAS Early Conciliation with the First Respondent which began on 15 March and ended on 26 April, both of 2024, the Claimant presented a Claim Form to the Tribunal on 29 April 2024.[21]The First Respondent was notified of the Claim by the Tribunal on 1 May 2024, and was given until 29 May 2024 to present a Response to it. The First Respondent did not present a Response by that time, and no such Response has been received by the Tribunal by the date of this judgment.[22]The First Respondent went into creditors’ voluntary liquidation on 4 June 2024.[23]On 19 July 2024, the Tribunal declined to issue default judgment against the First Respondent under what was then Rule 21 of the Employment Tribunals Rules of Procedure 2013, on the basis that evidence needed to be heard about the Claimant’s claim of constructive unfair dismissal in order for that claim to be made out.[24]On 20 November 2024, the liquidator of the First Respondent reported a claim under the legal protection insurance policy to the Second Respondent in respect of the Claimant.[25]On 22 November 2024, the Second Respondent wrote to the First Respondent acknowledging receipt of the claim, and saying that the Second Respondent would check whether the claim was covered by the insurance policy. The Tribunal has seen no further correspondence recording the Second Respondent’s conclusion on that question.[26]A Preliminary Hearing for Case Management in respect of the Claim was held before EJ Cawthray on 10 December 2024. The Claimant cited the TPRAI Act, and the Court of Appeal decision in Watson v Hemingway Design Ltd [2021] ICR Case Number: 2303860/2024 5 of 16 1034 in that hearing, seeking to add the Second Respondent as a second respondent to the Claim. EJ Cawthray granted that application.[27]On 18 December 2024, the Second Respondent was served with the Claim, and given 28 days in which to present its Response. It failed to present any Response in that time, and no such Response has been received by the Tribunal by the date of this judgment.[28]Also on 18 December 2024, the Tribunal sent the Second Respondent a copy of EJ Cawthray’s Orders, which included notification of this hearing.[29]On 10 January 2025, the Second Respondent changed its name, as described in paragraph 1 above, and it registered that change of name with Companies House on 15 January 2025.[30]In his Schedule of Loss dated 27 February 2025, the Claimant indicated that he was applying for a Preparation Time Order under Rule 73 of the ET Rules, in respect of 30 hours’ work, so in the amount of £1,320 (based on £44 per hour). The hearing[31]Neither Respondent attended the hearing, which was listed for two days, but in light of the lack of Response from either Respondent and their non-attendance, it only lasted one day. The Claimant presented his own case.[32]The Claimant had prepared a bundle of evidence, which included a written witness statement from him, and ran to 16 pages. Those documents included hyperlinks to other documents, a number of which the Claimant took the Employment Judge to in the course of giving his evidence.[33]At the hearing, the Claimant was asked about the basis for his Preparation Time Order application under Rule 74(2), and after a short break to consider the matter, said that he was withdrawing that application. Facts[34]In light of the non-presentation of any Response from either Respondent, the Tribunal accepted the facts as relayed by the Claimant in: a) His Claim Form and Particulars of Claim; b) His subsequent correspondence with the Tribunal; and c) His oral evidence to the Tribunal in this hearing, and much of this is reflected in the Background section above.[35]The Tribunal also accepted the Claimant’s account that his resignation was a response to a fundamental breach of his contract of employment by the First Respondent in its failure to pay him substantial sums by way of salary. It is logical and credible that he could not continue to bear the non-payment of sums owed to him, and that there came a ‘tipping point’ when he could no longer do so and Case Number: 2303860/2024 6 of 16 he accepted the First Respondent’s breach upon gaining new employment. The fact that he resigned so as to take up new employment does not diminish the credibility of his position that his resignation was caused by the First Respondent’s failure to pay him the sums owed to him over a considerable period of time. The Tribunal accepts that his resignation was the result of that fundamental breach of contract by the First Respondent. Law Rule 22[36]Rule 22 of the ET Rules reads: “(1) This rule applies where-(a) the Tribunal has not received a response by the time specified in rule 17(1) (response), or by an extension of time granted under rule 21 (applications for extension of time for presenting response),(b) any response received has been rejected and no application for a reconsideration is yet to be determined, or(c) the respondent has stated that no part of the claim is contested. (2) The Tribunal must decide whether on the available material (which may include further information which the parties are required by the Tribunal to provide), a determination can properly be made of the claim, or part of it. To the extent that a determination can be made, the Tribunal must issue a judgment accordingly, otherwise, a hearing must be fixed. Where the Tribunal has directed that a preliminary issue should be determined at a hearing, a judgment may be issued by the Tribunal under this rule after that issue has been determined without a further hearing. (3) The Tribunal must provide the respondent with notice of any hearing or decision of the Tribunal but the respondent may only participate in any hearing on that claim to the extent permitted by the Tribunal.” Constructive unfair dismissal[37]The right not to be unfairly dismissed is set out in section 94 of the 1996 Act. For these purposes, an employee is dismissed by their employer if: “the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct” (section 95(1)(c) of the 1996 Act).[38]This treatment of the employee’s resignation as “constructive dismissal” predates the 1996 Act, and Lord Denning MR in the Court of Appeal decision in Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 described the nature of Case Number: 2303860/2024 7 of 16 the contractual breach which entitles the employee to accept that breach and treat the employer’s conduct as dismissing them: “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer’s conduct. He is constructively dismissed.”[39]Therefore there are three elements that an employee needs to prove to demonstrate that they have been constructively dismissed: a) A fundamental breach of the contract of employment between them on the part of the employer; b) A causal link between the employee’s resignation and that employer breach; and c) Evidence of the employee accepting that breach before any affirmation of the contract. Unauthorised deductions from wages[40]Section 13 of the 1996 Act provides: “(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… (3) 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” (emphasis added).[41]Section 27 of the 1996 Act defines wages as “any sums payable to the worker in connection with his employment”, and that includes, in subsection (a), “any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise”.[42]Section 27(2) sets out various items which are excluded from the concept of “wages”, and those excluded items include “any payment in respect of expenses incurred by the worker in carrying out his employment” (section 27(2)(b)).[43]Section 23 deals with treatment of complaints of unauthorised deductions brought before the Tribunal. On time limits it provides that complaints of unauthorised Case Number: 2303860/2024 8 of 16 deductions must be presented to the Tribunal within three months of the date of payment of the wages from which the deduction was made (subsection 2), but that time limit runs from the last deduction in the series where there have been a series of deductions (subsection 3).[44]Whether there has been a “series” of deductions for the purpose of section 23(3) is a question of fact, requiring a sufficient factual and temporal link between the underpayments (Bear Scotland Ltd v Fulton [2015] ICR 221; Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33). The word “series” is an ordinary English word, and in the context of section 23(3) it means “a number of things of a kind which follow each other in time” (Agnew).[45]The case law indicates that the following factors may be relevant to whether deductions are part of a “series”: a) The deductions’ similarities and differences; b) Their frequency, size and impact; c) How they came to be made and applied; and d) What links them together.[46]An Employment Tribunal cannot consider that part of a complaint of unauthorised deductions from wages that relates to a deduction where the date of payment of the wages from which the deduction was made was before the period of two years ending with the date on which the claim was presented (subsection 4A).[47]Section 24(1) of the 1996 Act provides that, where a tribunal finds a complaint of unauthorised deduction from wages well-founded, it shall make a declaration to that effect and order the employer to pay to the worker the value of the deduction.[48]Section 24(2) further provides that: “Where a tribunal makes a declaration under subsection (1), it may order the employer to pay to the worker (in addition to any amount ordered to be paid under that subsection) such amount as the tribunal considers appropriate in all the circumstances to compensate the worker for any financial loss sustained by him which is attributable to the matter complained of” (emphasis added). Compensation related to entitlement to leave[49]Regulation 14 of the Working Time Regulations 1998 applies where: “(a) a worker’s employment is terminated during the course of his leave year, and (b) on the date on which the termination takes effect (“the termination date”), the proportion he has taken of the leave to which he is entitled in the leave year under regulation 13 and regulation 13A differs from the proportion of the leave year which has expired.” Case Number: 2303860/2024 9 of 16 In other words, Regulation 14 applies if the worker has taken more or less annual leave than their pro rata entitlement for the portion of the leave year they have worked.[50]It requires that: “(2) Where the proportion of leave taken by the worker is less than the proportion of the leave year which has expired, his employer shall make him a payment in lieu of leave in accordance with paragraph (3).” The Third Parties (Rights Against Insurers) Act 2010[51]The TPRAI Act operates to assign the rights of an insured person under an insurance policy to a third party to whom the insured person has incurred a liability covered by the insurance policy (section 1(2) of the TPRAI Act).[52]The conditions on which this statutory assignment occurs are prescribed in the TPRAI Act, and include where the insured person is a company which is the subject of a voluntary liquidation procedure (pursuant to section 6(2)(d) of the TPRAI Act).[53]The third party may bring proceedings against the insurer for: a) A declaration of the insured person’s liability to that third party; b) A declaration of the insurer’s potential liability to that third party; or c) Both (section 2(2) of the TPRAI Act), and is entitled to be awarded such declaration/s if the proceedings succeed (section 2(3)).[54]Section 2(4) of the TPRAI Act provides that, where proceedings are brought for a declaration of the insured person’s liability to the third party, the insurer may: “rely on any defence on which the insured [person] could rely if those proceedings were proceedings brought against the insured [person] in respect of the insured’s liability to [the third party]”.[55]The purpose of the TPRAI Act, to give a third party who is owed a liability covered by an insurance policy taken out by an insolvent person the ability to enforce that policy directly against the insurer in a single legal action, is achieved by section 2(6), which states: “Where the court makes a declaration under this section, the effect of which is that the insurer is liable to [the third party], the court may give the appropriate judgment against the insurer”.[56]This avoids the need for the third party to bring separate proceedings against each of the (insolvent) insured party and the insurer. Case Number: 2303860/2024 10 of 16[57]Section 9 concerns the situation where the terms of the insurance policy attach conditions to the insurer’s liability to the insured, and (amongst other things) states that: a) “Anything done by the third party which, if done by the insured, would have amounted to or contributed to fulfilment of the condition is to be treated as if done by the insured” (section 9(2)); b) “A condition requiring the insured to provide information or assistance to the insurer does not include a condition requiring the insured to notify the insurer of the existence of a claim under the contract of insurance” (section 9(3)); and c) “A condition requiring the insured to provide information or assistance to the insurer does not include a condition requiring the insured to notify the insurer of the existence of a claim under the contract of insurance” (section 9(4)).[58]The Court of Appeal in the case of Watson v Hemingway Design Ltd [2021] ICR 1034 made it clear that, for the purposes of the TPRAI Act, the references it contains to a “court” having the power to make such declarations include references to an employment tribunal. Application to the claims here Constructive unfair dismissal[59]The Tribunal finds that: a) The First Respondent committed a fundamental breach of its contract of employment with the Claimant when it failed to pay him substantial sums of money from June 2022 onwards until the termination of his employment. That breach was continuing at the time when the Claimant resigned, on 12 February 2024; b) That breach was the cause of the Claimant’s resignation from his employment on 12 February 2024. In his words, “Having previously been able to show a great degree of flexibility and tolerance in the face of unpaid wages, the period October 2023 – February 2024 represents a ‘straw which broke the camel’s back’ moment”. The Claimant explained in oral evidence that the things that changed in this period from the prior period were(i) there were no “catch-up” payments made (previously, there had been some), and(ii) it became apparent that he was being viewed as a creditor, and discussions began to be had by the owners of the business about how to close the business and transfer it to another corporate entity in order to avoid paying monies to creditors, which included him. As neither Respondent presented a Response nor attended this hearing, this evidence is unchallenged by them. Moreover, it is credible, given the sums outstanding were a significant portion of the Claimant’s annual salary by Case Number: 2303860/2024 11 of 16 the time of his resignation, that there would be a limit to his tolerance of late and non-payment, and his reasons for why it was reached in this period were accepted by the Tribunal; and c) There is no indication that the Claimant affirmed the contract ahead of accepting the First Respondent’s fundamental breach.[60]As for remedy, the Tribunal notes that the Claimant does not want reinstatement or re-engagement, and nor is either such remedy appropriate in the circumstances of the First Respondent’s liquidation.[61]The Tribunal agrees with the Claimant’s calculation of the value of the basic award applicable to him.[62]The Claimant seeks a compensatory award, but has not specified the value sought, simply stating that it should be at the Tribunal’s discretion.[63]While the Tribunal acknowledges the significant distress that the fundamental breach caused the Claimant, injury to feelings is not a basis for compensation in respect of a finding of unfair dismissal. Any compensatory award is to compensate the Claimant for any financial loss caused to him by his unfair dismissal, and he commenced more remunerative employment (both in terms of the value of his base salary and because his new employer did, in fact, pay him the sums it owed him) three days after his employment with the First Respondent ended. No compensatory award should therefore be made in respect of financial losses to the Claimant from his dismissal. (The financial losses flowing from the reason for his dismissal are compensated by the remedy attaching to other complaints.)[64]The Claimant had accrued various time-based statutory employment rights, including the right not to be unfairly dismissed by his employer by the time his employment terminated, and £500 is awarded by way of compensation for loss of those rights. Unauthorised deduction from wages: salary[65]The Tribunal accepts the Claimant’s account that he was not paid wages to the aggregate value of £28,134 in the period June 2022 to February 2024.[66]The Tribunal finds that these sums were deducted from the wages paid to the Claimant as part of a series of deductions – they represented fairly consistent non-payment of his salary (with never more than a two month gap between nonpayments), with sporadic overpayments of salary to partially ‘make good’ some past non-payments. Most of those deductions were of his full salary amount. The evidence from the Claimant was that they had a consistent and significant impact on him, causing him to take on board debt to support himself and his family, and eventually contributed to his having to enter into a debt management plan.[67]Overpayments in some months should arguably be taken to compensate the earliest months of non-payment, beginning in June 2022, rather than the thenCase Number: 2303860/2024 12 of 16 most recent non-payment. Even if overpayments are treated as compensating for most recent non-payment(s), a series of deductions beginning in June 2022 does not offend the requirement in section 23(4A) that no deduction which occurred more than two years before the date on which a claimant presents their complaint to the Employment Tribunal will be considered. In this case, a deduction in June 2022 was within that two year period given the Claimant presented his Claim on 29 April 2024.[68]As for remedy, the Tribunal is required to: a) Make a declaration that the Claimant’s complaint of unauthorised deductions from his wages is well-founded, which it has; and b) Make an order that the employer pay the worker the value of the deduction, pursuant to section 24(1) of the 1996 Act.[69]The Tribunal may order the First Respondent to pay to the Claimant, in addition to the (aggregate) principal sum deducted from his salary, “such amount as the tribunal considers appropriate in all the circumstances to compensate the [Claimant] for any financial loss sustained by him which is attributable to the matter complained of” (section 24(2)), i.e., to the unauthorised deductions.[70]The Tribunal heard evidence from the Claimant that he accumulated debts in consequence of the unauthorised deductions from his salary, in the form of interest on his American Express credit card and an overdraft held with NatWest. The Claimant no longer has records of the amounts he incurred under these facilities given the accounts were closed in connection with his debt management plan, but he has looked up the relevant interest rates applicable in those periods and applied an average of the interest rates for the American Express credit card and the NatWest overdraft to the cumulative balance for these non-payments. This is a reasonable approach in light of the lack of documentary evidence as to those costs, and again, the Tribunal notes this is unchallenged by either Respondent.[71]The Tribunal therefore finds that the cost of servicing that debt was, for the period June 2022 to April 2024 (when he presented his Claim Form to the Tribunal), to be £6,534. The Tribunal considers it appropriate to Order the First Respondent to compensate the Claimant for that financial loss. Unauthorised deduction from wages: holiday[72]As set out in the Law section above, Regulation 14 of the Working Time Regulations 1998 obliged the First Respondent to pay the Claimant compensation on the termination of his employment for holiday leave which he had accrued but not taken by that time.[73]The Claimant’s position, that he had accrued but not taken 3.6 days’ leave, has not been challenged by the First Respondent. Case Number: 2303860/2024 13 of 16[74]The Claimant earned £80,000 gross per annum for a full-time role. His calculation of the compensatory value of this leave as £1,108 is therefore correct.[75]The Claimant is not seeking any further sum attributable to financial loss due to non-payment of this amount. Unauthorised deduction from wages: commission[76]The Claimant’s written contract of employment dated 15 August 2018 contains a clause entitled “Commission/Bonus”. That clause (which begins at sub-paragraph 7.2, there is no sub-paragraph 7.1) reads: “7.2 The Company may pay you commission in accordance with the Company’s Commission Scheme/Bonus Scheme as issued by the Company from time to time. 7.3 The Company reserves the right to alter the commission targets or the Commission Scheme at any time without prior notice to you. 7.4 Notwithstanding clause 13.3 [which relates to sickness absence] you shall in any event, have no right to a commission payment or a time-apportioned commission payment if:(a) your employment terminates for any reason or you are under notice of termination (whether given by you or the Company) at or prior to the date when a commission payment might otherwise have been payable; or(b) you are absent from work due to Incapacity and have exhausted your entitlement to Company sick pay under clause 13.3.”[77]The Claimant says that there was no separate documentation about the commission scheme that applied to him, but that it was orally agreed by him and the First Respondent management (and referred to extensively in correspondence between them) that he would receive commission based on 10% of the net revenue of sales for which he was responsible.[78]The Claimant has taken to the Tribunal to one payslip where commission was in fact paid in March 2019, but the Claimant says that the accumulation of outstanding commission payments was flexibility shown by him that was appropriate given the First Respondent’s nature as a “start-up” business – that he was assured that the payments would be ‘made good’ in the future, and he accepted that assurance. At one point he says that he was allocated additional share capital in the First Respondent in return for his forbearance in this regard, but that award did not diminish his entitlement to his accrued commission.[79]The Tribunal accepted that the Claimant was entitled to participate in a commission scheme – as shown by his contract of employment and the payslip from March 2019. The terms of the Claimant’s written contract do not set out the details of that commission scheme, and so the only evidence available to the Tribunal is from the Claimant. He struck the Employment Judge as a credible and Case Number: 2303860/2024 14 of 16 careful witness. He explained that he did not have access to all of his email correspondence with the First Respondent, so could not provide evidence of his correspondence with the First Respondent management team about his outstanding commission, save for some correspondence about a possible settlement agreement, which is inadmissible in these proceedings as without prejudice discussions, and so was not taken into account by the Tribunal. The Claimant explained that, in a start-up environment, it was reasonable for him to show forbearance as regards the late payment of his commission, but that he was entitled to the sums sought. There is no challenge to this credible position, and the Claimant’s contention that he was entitled to commission and that much of it had not been paid was accepted by the Tribunal.[80]Although it is a distinct series, the Tribunal finds for similar reasons to those in respect of the deductions from salary, that the deductions from his wages by the First Respondent in respect of the commission payments formed part of a series of deductions – they represented an entirely consistent non-payment of commission (while he was paid some commission in March 2019, that is outside of the period of non-payment to which his claim relates). Those deductions were of the entire commission amount. The evidence from the Claimant was that the First Respondent’s non-payment of all the sums owed to him had a significant impact on him, causing him to take on board debt to support himself and his family, and eventually contributed to his having to enter into a debt management plan.[81]As for the value of his outstanding commission, the Claimant says that he has sought copies of the relevant records from the First Respondent which would show the value of the commission he was entitled to from 2021 onwards (when he says he ceased to receive commission payments), however those records have not been provided to him.[82]He says, and the Tribunal accepts, that he has instead been left to rely on the email records he has of the value of the deals he closed and the net revenue they generated. He believes those figures to be accurate. On that basis he says that the value of outstanding commission owed to him by the First Respondent is: a) £15,678 in respect of 2021; b) £19,598 in respect of 2022; and c) £23,518 in respect of 2023, coming to an aggregate figure of £58,795.[83]The Tribunal is satisfied that the failure to pay him these commission payments represents a series of deductions for the purposes of section 23(3), being sums with a sufficient factual and temporal link (being the same kind of deduction – consistent non-payment of commission – over a protracted period) to reach that conclusion. Case Number: 2303860/2024 15 of 16[84]However, some of those deductions occurred outside of the two-year lookback period prescribed by section 23(4A) – the commission payments not paid in 2021, and those not paid in the period 1 January to 29 April 2022.[85]The Claimant’s evidence is that the net revenue he brought in was generally fairly consistent throughout the financial and calendar year, and so it would be reasonable to reduce the 2022 commission payment by one third to reflect the fact that section 23(4A) prevents the Tribunal considering deductions from his wages in respect of commission payable in the period 1 January to 29 April 2022.[86]The aggregate deductions made by the First Respondent in respect of commission within the two-year lookback period was therefore £36,583.33.[87]The Claimant does not seek compensation in respect of the cost of debt relating to this amount. Breach of contract[88]The Claimant also says that he was not reimbursed for work-related expenses in breach of his contract of employment. This, as with all his other complaints, is unchallenged by either Respondent.[89]The Claimant is awarded £5,890.08 by way of damages for those failures to pay, and £2,030 in respect of the cost to him in servicing debt of that value, so £7,920.08 in aggregate. The Second Respondent and the application of the TPRAI Act[90]It is regrettable that the Tribunal was not furnished with any evidence from either the First Respondent or the Second Respondent to confirm or correct the Claimant’s understanding of the legal protection insurance policy taken out by the First Respondent.[91]However, the information available to the Tribunal, with both the First Respondent and the Second Respondent having had ample time and notice to present their positions on these matters, indicates that: a) The First Respondent is an insured person, and a “relevant person” (being an insured person who is the subject of one of the insolvency proceedings specified, in this case, creditors’ voluntary liquidation which is specified in section 6(2)(d)), for the purposes of the TPRAI Act; b) The Second Respondent is the insurer for that purpose; and c) The Claimant is a third party (in relation to that insurance contract) for the purposes of the TPRAI Act, and one to whom the First Respondent has incurred a liability (for the complaints of unfair dismissal, unauthorised deductions from the Claimant’s wages, and breach of contract upheld by the Tribunal). Case Number: 2303860/2024 16 of 16[92]While there are likely to be conditions to which provision of insurance coverage is subject under the contract between the First Respondent and the Second Respondent, the limited information available to the Tribunal indicates that the statutory assignment of the First Respondent’s rights under that insurance contract to the Claimant renders the Second Respondent potentially liable for the value of compensation which the Tribunal has Ordered the First Respondent to pay to the Claimant pursuant to this judgment. The Second Respondent has presented no Response to the Claim, and so there is no basis for thinking anything other than: a) The TPRAI Act applies; and b) It operates to assign the benefit of that insurance contract to the Claimant in relation to the liabilities of the First Respondent to the Claimant in respect of this case (for unfair dismissal, unauthorised deductions from wages and breach of contract). Conclusions[93]For all of the above reasons: a) The First Respondent is Ordered to pay to the Claimant the sum of £83,994.41 gross in respect of the Claimant’s well-founded complaint of constructive unfair dismissal, unauthorised deduction from wages and breach of contract; and b) The Tribunal finds that the Second Respondent is potentially liable to the Claimant in respect of the First Respondent’s liabilities under this claim.