Miss B S S Azariah v Beardsells Ltd (in compulsory liquidation) and Secretary of State for Business and Trade: 2403654/2024

EMPLOYMENT TRIBUNALS

Case No 2403654/2024

Between

Miss B S S AzariahClaimant

Beardsells Ltd (in compulsory liquidation) and Secretary of State for Business and TradeRespondent

Before

Employment Judge KM Ross

In person for claimant

Date 18 December 2024

JUDGMENT

[1]I declare pursuant to Section 182 and Section 188(3) Employment Rights Act 1996 that the 2nd Respondent ought to make a payment to the claimant of a basic award of compensation for unfair dismissal in the sum of £7,263 pursuant to Section 182 and Section 184(d) Employment Rights Act 1996 .

[2]I declare pursuant to Section 182 and Section 184(b) Employment Rights Act 1996 that the 2nd Respondent ought to make a payment to the claimant of notice pay in the sum of £1,525.68.

REASONS

[1]The claimant brought a claim to Employment Tribunal and was successful before Employment Judge Mellor in a judgment of 24 May 2022 sent to the parties on 6 June 2022. She was awarded a basic award of £7,263 and notice pay of £1,525.68. The total compensation payable was a basic award of £7,263 and a compensatory award of £30,000 totalling £37,263, notice pay of three weeks and one day £1,525.68 and holiday pay of £4,203.42 plus an award for failure to provide written particulars of employment of £2,152.

[2]The claimant instructed Enforcement Agents after the respondents failed to satisfy the award. In a combination of seizing assets and periodic interim payments they recovered £31,818.40. (They also deducted enforcement fees of over £10,000).

[3]Therefore the balance owing to the claimant from the original judgment was £13,325.70. Case No. 2403654/2024 2

[4]On 15 November 2023 the first respondent entered liquidation.

[5]The claimant made an application to the Secretary of State from the National Insurance Fund. There was extensive communication between the claimant and the Insolvency Service. Eventually, the claimant was informed, pursuant to Section 187 Employment Rights Act 1996, the Secretary of State had required a statement from the Official Receiver who had declared they would not provide a statement of debt owed to the claimant as they deemed her statutory entitlements to have already been paid.

[6]This position was re-stated by the second respondent in these proceedings. There was no representative from the Secretary of State in attendance at the hearing but the ET3 stated with reference to Section 187(1) and (2) ERA 1996 “the Official Receiver of Nottingham confirmed they will not provide a statement of the debt owed to the claimant as they deemed the statutory entitlements under Section 166 and 184 of the act to have already been paid”.

The Law

[7]In order to recover from the Secretary of State the claimant is entitled to make an application under Section 188 ERA 1996. I have the power pursuant to that section to make a declaration to the effect that “the Secretary of State ought to make a payment under Section 182” and I should also “declare the amount of any such payment which the Tribunal finds the Secretary of State ought to make”. In her claim before me the claimant is seeking the basic award and notice pay from the Secretary of State. ( She is not pursuing her claim for holiday pay.)

[8]I reminded myself that Section 182 ERA 1996 states the employee’s rights on insolvency of the employer are “if on application made to him in writing by an employee the Secretary of State is satisfied that: -a. The employer has become insolvent.

b. The employee’s employment has been terminated; and

c. On the appropriate date the employee was entitled to be paid the whole or part of any debt to which this part applies the Secretary of State shall, subject to Section 186 pay the employee out of the National Insurance Fund the amount to which in the opinion of the Secretary of State, the employee is entitled in respect of the debt”.

[9]I reminded myself that in this case the employer was insolvent having become insolvent on 15 November 2023. Therefore (a) above is satisfied.

[10]The claimant’s employment had been terminated some considerable time prior to this Employment Tribunal claim and so (b) above is satisfied.

[11]On the “appropriate date” which in this case was the insolvency date (see Section 185) the employee, (the claimant) was entitled to be paid “the whole or any part of any debt to which this part applies”. I reminded myself that this part i.e. Section 182 is further clarified in Section 184 ERA 1996. The Case No. 2403654/2024 3 claimant is seeking a basic award of compensation for unfair dismissal as set out at Section 184(d) and an award of notice pay as set out at 184(b).

[12]I can find nothing in any Regulations or the Employment Rights Act 1996 to identify that where some of an award due to the claimant under an Employment Tribunal’s judgment has been paid, but some of the award is outstanding that there is an order of priority as to how the sums which have been paid are assigned, in terms of the different parts of the Tribunal award of basic award, compensatory award and notice pay.

[13]There appears to have been an assumption on the part of the Official Receiver that the basic award and notice pay (the claimant’s “statutory entitlements”) were included in the sums the claimant has already received as a result of the actions of the Enforcement Officer. I am not satisfied there is any authority either in statute or in case law for that approach. Certainly, none has been identified.

[14]What is true is that as of the date of insolvency as identified at Section 185 ERA 1996 the debts to which this part applies as set out in Section 184 ERA 1996 were owed to the claimant because for all intents and purposes, she had not been paid the basic award or notice pay and they were outstanding within the amounts still due to her.

[15]I had regard to Section 187 ERA 1996. There is no criticism of the Secretary of State for not making the payment. I reminded myself that the Secretary of State has discretion under Section 172 ERA 1996 to require a statement from the Official Receiver. Having received the notice from the Official Receiver, the Secretary of State acted upon it. However as stated above, I am not satisfied the Official Receiver or the Secretary of State has clarified any authority to assign the sums received by the claimant in the way the Official Receiver has done.

[16]Therefore, having had regard to Section 182, 184 and 185 ERA 1996 I am satisfied that the Secretary of State ought to make a payment under Section 182 to the claimant for the reasons I have identified. Approved by