Employment Judge Truscott KCIn person for claimantMr D Morrison director for respondentDate 17 October 2023
JUDGMENT
[1]The claim is amended to be directed against Member Benefits Limited.[2]The claimant was a worker in terms of section 230(3)(b) of the Employment Rights Act 1996. She was not an employee.[3]The claimant is owed £1214.50 being unpaid commission. The respondent is ordered to pay £1214.50 to the claimant in respect thereof.[4]The claim of unfair dismissal is dismissed as the claimant was not an employee and does not have the requisite length of service to make such a claim.[5]The claim for travel expenses is dismissed.
REASONS
This case was listed for a 1 day hearing commencing at 10am. Neither party had complied with the case management Orders so there were no witness statements and documentary evidence was provided by way of email attachments throughout the Case Number 2304945/2021 2 hearing. These are referred to where necessary. The claimant and Mr Morrison gave evidence in support of their respective cases.
Findings of fact
[1]The claimant had started a small online business and sought a means to earn additional funds. She saw an advertisement for a business development manager with the respondent and a job description on the “Indeed” jobs site [which was provided as a screenshot]. She applied for the position. She was aware that it was a commission-based role. The role was field-based signing up SME sized businesses to advertise their company in David Lloyds Clubs. In short, the claimant sold advertising space in a magazine which was distributed at the Club. She would seek either 100% of the payment from the customer in advance or 50% initially and 50% later. It was her responsibility to recover any later payments.[2]She trained with Derek Bowen on 18 May 2021 for four days at David Lloyds Clubs in Purley. On 24 May 2021, Mr Derek Bowen and the claimant signed the agreement which was similar in terms to the copy provided by email by the respondent. Payment to the claimant was addressed in Schedule 3 of the Agreement which provided: Schedule 3: Compensation and Billing Procedures I. Compensationa. A. Client will pay 25 % commission in consideration of approved adverts or agreed content paid weekly of fortnightly in arrears on receipt of agreed invoice.b. B. The Client will then pay the Agency an agreed additional 5% commission of the total revenue of each publication issue on completion of each David Lloyd Clubs Member Benefits Programme completed by the Agency after first deducting all agreed cost associated with the production of the programme (including but not limited to design, artwork, print, images, video, publication transportation,c. C. Billing procedure: Invoices are to be sent to admin@aspiredmarketing.co.uk The Client will from time to time pay reasonable travel expenses at its discretion to the Agency.[3]On 29 July 2021, the claimant contracted Covid 19 and said she would work from home. She did not contact her clients to collect any payments due thereafter.[4]The claimant invoiced the respondent in Invoices 1001-1005 Purley each of which was disputed to some extent, Invoice 1005 Kingston for £118.50 was not disputed. There is an invoice 1006 for travel expenses which was not in issue. The claimant received payments of £500 on 2 June 2021, £500 on 2 July 2021 and £481 on 12 July 2021. The claimant sought payment of Purley 2, 3 and 4 and Kingston.
Law
[5]Section 230 of the Employment Rights Act 1996 provides: (3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)— Case Number 2304945/2021 3(a) a contract of employment, or(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker's contract shall be construed accordingly. 6. Section 27 provides: (1) In this Part “wages” , in relation to a worker, means any sums payable to the worker in connection with his employment, including—… but excluding any payments within subsection (2). (2) Those payments are— (b) any payment in respect of expenses incurred by the worker in carrying out his employment,[7]Section 27(1)(a) refers to both bonuses and commission. In New Century Cleaning Co Ltd v. Church [2000] IRLR 27, the Court of Appeal held by a majority (Sedley LJ dissenting) that in order for a payment to fall within the statutory definition of wages, the worker had to show a legal entitlement to the payment (whether contractual or otherwise). Discussion and decision[8]The ET1 makes the claim against Derek Morrison Bowen whereas the contractual documentation identifies the other contracting party as Member Benefits Limited. The claim was amended accordingly.[9]The arrangement under which the claimant worked fell within the definition of a worker in section 230. She was not an employee and did not have the requisite length of service to claim unfair dismissal.[10]The claimant sought to recover what she claimed were outstanding travel expenses. The Tribunal did not entertain this claim as it was precluded by section 27(2)(b). The evidence in relation to travel expenses impacted on the evidence of what was outstanding on the invoices. The claimant texted Derek Bowen on 16 July 2021 for a reimbursement of £227.04 which is what she said she had spent on travel and entertainment from 1 July 2021. She said that on 19 July 2021, Derek Bowen agreed verbally in David Lloyds Club, Kingston that he would reimburse her travel money and pay what was remaining of her sales commission. However, he only agreed to pay her £200 for her expenses. On 26 July 2021, Mr Bowen sent a text message, “I have sent you some dosh which you will receive in your account tomorrow”. A stand off ensued whereby the claimant carried out no further work until her invoices were settled. Her outstanding invoices were not settled nor was she provided with a financial reconciliation of what was actually due to her.[11]The witnesses were in agreement about very little. The claimant gave evidence consistent with the narrative of her ET1. She had been paid for Invoice 1001 by two sums £500 on 5 July and £481 on 12 July 2021. She received £500 on 2 June 2021 which she said was for travel expenses. The respondent disputed this. The Tribunal Case Number 2304945/2021 4 considered it unlikely that such a sum would be for that amount. No invoice was produced. To pay travel invoices without travel receipts seemed an unusual practice for an employer to adopt but it did at least so far as Invoice 1006 was concerned for July travel expenses totalling £200. The claimant lodged a copy of her Lloyds bank statement which seemed to support that invoice.[12]Invoice 1002 was issued to recover the 5% due when the magazine was produced. This amounted to £292.25. Invoice 1003 was issued to recover the second part of the commission due on certain identified sales totalling £235..50.[13]Invoice 1004 Purley is for the commission claimed for certain sales at 30% amounting to £1336.50 about which there was much dispute. Invoice 1005 Purley is a duplicate of Invoice 1004.[14]Certain of the transactions relied upon by the claimant were either cancelled or not paid. The respondent identified the following entries in this category: Invoice 1001 Twizzlers £595, Invoice 1002 Casa Lola Tapas £347.50, Aycorn Ltd £795 and Tranceformations £395. The Tribunal decided that no deduction should be made to the calculation of the amount of the claim in 1002 as 5% was being claimed for completion. If completion had not taken place, the claimant should have been told as indeed if the clients had cancelled. Similar reasoning applies to invoice 1003.[15]Invoice 1004 falls to be treated differently. Whilst the Tribunal did not understand the system whereby the respondent identified when clients cancelled or did not pay and if or how it adjusted the amounts due to persons such as the claimant, it accepted that not only did the claimant not collect the amounts due and this work was done by others, she was also contacting the clients to get them to cancel their orders as she was in dispute with the respondent. She also included the 5% additional commission for completion which was unlikely in the event of cancellation. The following clients cancelled, El Shams £595, The nail collection £495, Crystal Cusine Persian £595 and Cash and Carry £495.. It seemed to the Tribunal that the claimant was trying to approbate and reprobate the contact in that she was claiming under it whilst acting against its terms.[16]On 9 September 2021, Alex of the respondent’s administration texted the claimant and said that the details for her invoice would be provided once they have tracked down the total payable commission. It is not known whether this relates to some form of internal financial reconciliation or payment of the invoices. The Tribunal really did not understand why a reconciliation had never been provided to the claimant and was even more concerned that a reconciliation had not been provided to the Tribunal.[17]The finding of the Tribunal is as follows: Invoice 1002 £292.25 due. Invoice 1003 £235 due. Invoice Kingston £118.50 due. Invoice 1004 undisputed items total £2275 of which 25% amounts to £568.75. The Tribunal declined to award the additional 5% as it was unlikely these clients were included in the magazine. These total £1214.50. The Tribunal considered whether to deduct the £500 paid on 2 June 2021 but decided it had not been provided with a basis for so doing by the respondent. Case Number 2304945/2021 5[18]The respondent sought to make an employer’s counterclaim in the ET3 under art 4 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994 SI 1994/1623 but was not permitted to do so as the ET3 contained a denial that the claimant was an employee. The claim must be one to which section 3(2) of the Employment Tribunals Act 1996 applies. This refers to the breach of (or a sum due under) 'a contract of employment or any other contract connected with employment'. The meaning of the latter part of this phrase is, to say the least, unclear. It does not include a self-employed person's contract because 'employment' is defined by section 42 of the ETA 1996 as 'employment under a contract of employment', and that section does not adopt the wider definition including certain self employment where the work is done personally in section 230 of the Employment Rights Act. This might have had unfortunate consequences for the respondent in the present case.[19]Mr Morrison said he had only received notification of this hearing the evening before and was unable to present all the material in support of his case. He only found the other relevant emails from the Tribunal when he checked another email address. He blamed the Tribunal administration. The Tribunal noted that at one stage the respondent had instructed a solicitor and that a hearing on 19 July 2023 had been postponed on 17 July 2023. The Tribunal was unwilling to delay matters further and sought to determine the issues on the material before it. ......................................................... Employment Judge Truscott KC Date: 17 October 2023 Case Number: 2304945/2021 1 EMPLOYMENT TRIBUNALS Claimant Respondent Ms M Kumar v Member Benefits Limited
Law
[1]In a judgment dated 17 October 2023, the Employment Tribunal determined that the name of the respondent be amended, that the claimant was a worker and that she was entitled to payment of £1214.50.[2]In a letter to the Tribunal dated 27 November 2023, the respondent seeks a reconsideration of the judgment. Any application for the reconsideration of a judgment must be determined in accordance rules 70 to 74 of the Employment Tribunal Rules of Procedure 2013. Rules[3]The relevant employment tribunal rules for this application read as follows: RECONSIDERATION OF JUDGMENTS Principles 70. A Tribunal may, either on its own initiative (which may reflect a request from the Employment Appeal Tribunal) or on the application of a party, reconsider any judgment where it is necessary in the interests of justice to do so. On reconsideration, the decision (“the original decision”) may be confirmed, varied or revoked. If it is revoked it may be taken again. Application 71. Except where it is made in the course of a hearing, an application for reconsideration shall be presented in writing (and copied to all the other parties) within 14 days of the date on which the written record, or other written communication, of the original decision was sent to the parties or within 14 days of the date that the written reasons were sent (if later) and shall set out why reconsideration of the original decision is necessary. Case Number: 2304945/2021 2 Process 72.—(1) An Employment Judge shall consider any application made under rule 71. If the Judge considers that there is no reasonable prospect of the original decision being varied or revoked (including, unless there are special reasons, where substantially the same application has already been made and refused), the application shall be refused and the Tribunal shall inform the parties of the refusal. Otherwise, the Tribunal shall send a notice to the parties setting a time limit for any response to the application by the other parties and seeking the views of the parties on whether the application can be determined without a hearing. The notice may set out the Judge’s provisional views on the application.(2) If the application has not been refused under paragraph (1), the original decision shall be reconsidered at a hearing unless the Employment Judge considers, having regard to any response to the notice provided under paragraph (1), that a hearing is not necessary in the interests of justice. If the reconsideration proceeds without a hearing the parties shall be given a reasonable opportunity to make further written representations.(3) Where practicable, the consideration under paragraph (1) shall be by the Employment Judge who made the original decision or, as the case may be, chaired the full tribunal which made it; and any reconsideration under paragraph (2) shall be made by the Judge or, as the case may be, the full tribunal which made the original decision. Where that is not practicable, the President, Vice President or a Regional Employment Judge shall appoint another Employment Judge to deal with the application or, in the case of a decision of a full tribunal, shall either direct that the reconsideration be by such members of the original Tribunal as remain available or reconstitute the Tribunal in whole or in part.[4]In accordance with rule 70, a tribunal may reconsider any judgment “where it is necessary in the interests of justice to do so”. On reconsideration, the decision may be confirmed, varied or revoked. If it is revoked it may be taken again.[5]The case authorities remind Tribunals that there is no automatic entitlement to reconsideration for any unsuccessful party. On the contrary, there is an underlying public policy principle in all proceedings of a judicial nature that there should be finality in litigation. Reconsideration of a judgment should be regarded as the exception to the general rule that Tribunal decisions should not be reopened and relitigated. In reference to the antecedent review provisions, in Stevenson v. Golden Wonder Ltd [1977] IRLR 474 EAT, Lord McDonald said that the (exceptional) process was ‘not intended to provide parties with the opportunity of a rehearing at which the same evidence can be rehearsed with different emphasis, or further evidence adduced which was available before’.[6]When dealing with the question of reconsideration a Tribunal must seek to give effect to the overriding objective to deal with cases ‘fairly and justly’. The Tribunal should also be guided by the common law principles of natural justice and fairness. Her Honour Judge Eady QC (as she then was) gave guidance as to the approach to be taken in Outasight VB Ltd v. Brown [2015] ICR D11 EAT. Although a tribunal’s discretion can be broad, it must be exercised judicially “which means having regard not only to the interests of the party seeking the review or reconsideration, but also to the interests of the other party to the litigation and to the public interest requirement that there should, so far as possible, be finality of litigation”. Case Number: 2304945/2021 3[7]TheThe requrequirementirement to consider the interests of justice to both sides is neither new nor novel. By way of illustration, in Redding v. EMI Leisure Ltd UKEAT/262/81, the claimant argued that it was in the interests of justice to undertake a [reconsideration] because sshehe had not understood the case against her and had failed to do herself justice when presenting her claim. When rejecting the claimant’s appeal, the EAT observed that: ‘When you boil down what is said on [the claimant’s] behalf, it really comes down to thithis:s: that she did not do herself justice at the hearing, so justice requires that there should be a second hearing so that she may. Now, justice means justice to both parties. It is not said, and, as we see it, cannot be said that any conduct of the case by the employers here caused [the claimant] not to do herself justice. It was, we are afraid, her own inexperience in the situation.situation.’’[8]Earlier guidance as to the approapproachach of Tribunals to the matter of reconsideration remains equally pertinent. In Trimble v. Supertravel Ltd [1982] ICR 440, the EAT made the following observations:a. a. it is irrelevant whether a tribunal’s alleged error is major or minor;b. b. what is relevant is whether or not a decision has been reached after a procedural mishap;c. c. since, in that case, tthehe tribunal had reached its decision on the point in issue without hearing representations, it would have been appropriate for it to hear argument and to grant the review if satisfied that it had gone wrong;d. d. if a matter has been ventilated and properly argargued,ued, then any error of law falls to be corrected on appeal and not by review.[9]The Tribunal considered the contents of the email chain attached to the application for reconsideration but other than repeat that there had been communication issues before the hearing which prejudiced the respondent, no reason is provided as to why the determination of the Tribunal is incorrect.[10]Notwithstanding the lack of any basis for reconsideration put forward by the respondent, the Tribunal reviewed its judgment. The issue of the correct contact details for the respondent seems to have started with the ET1 which was received on 21 September 2021 but served on the wrong address provided by the claimant. The ET3 provided the correct address for the respondent and there is subsequent correspondence about contact with the respondent’s representative. The ET3 narrates: “..The respondent has a counter claim of 1090 for customers where the Claimant did not follow up and owes commission of £98.75 leading to a balance owed by the Claimant of £191.25…”[11]Some form of financial reconciliation had to have been carried out by the respondent to substantiate the figures in the ET3, indeed the respondent must have been able to calculate the amount due to the claimant and other workers under the operation of the contracts at around the time payment was due to them.[12]The hearing was listed on 19 January 2023. Case management orders were made. The employer’s contract claim was disallowed and the Tribunal wrote to the respondent on 24 February 2023 in relation to reconsideration of that decision: Case Number: 2304945/2021 4 “…If no such application is received the matter will proceed as a claim only and remains listed for hearing on 19 July 2023 and the orders made dated 19 January 2023 remain in force…”[13]The orders were not complied with. On 7 June 2023, the Tribunal legal officer wrote to the parties with a pre-hearing checklist. It noted that a final hearing had been listed for 19 July 2023 and was postponed. The intimation of a postponement said that the case would be “relisted in the near future.” The respondent should have made some preparation for the forthcoming hearing. The hearing was listed for 14 September 2023.[14]For the purpose of the original judgment, the Tribunal reviewed the evidence provided during the course of the hearing. It is correct that Mr Morrison of the respondent complained he had not had proper notice of the hearing. The claimant wanted the hearing to proceed. The Tribunal decided to proceed with the hearing because of the passage of time since the claim was made and as the matter should have been relatively straightforward. There was more than ample time in the intervening period for a proper reconciliation of payments due to or by the claimant to be made if there was some inadequacy in the original figures and there was time provided during the hearing for any such documents to be provided by the respondent. The Tribunal found itself in a very unsatisfactory position but proceeded to hear from the parties and made a judgment on the material before it.[15]The Tribunal still does not understand why a financial reconciliation was not prepared for the final hearing if one was not available before then. If there was a difference between the current position when compared with the calculation by the respondent in the ET3, such a calculation could have been made available to the Tribunal. If there was no difference, an explanation of the figures in the ET3 could have been provided but was not.[16]The respondent is dissatisfied with the outcome but the facts and the relevant issues were explored and the legal tests applied. There is nothing in what is now said which indicates that it is in the interests of justice to re-open matters. The Tribunal considers that there are no grounds for revisiting the judgment within the scope of its powers of reconsideration under Rule 70 of the Employment Tribunal Rules of Procedure 2013.[17]The respondent’s application for reconsideration of the judgment dated 17 October 2023 is refused because there is no reasonable prospect of the original decision of the Tribunal being varied or revoked.