Mr L Gabites and Miss M Tuite v Andron Contract Services Ltd: 2403659/2022 and 2403660/2022
JUDGMENT
[1]The correct name of the respondent is Andron Contract Services Limited.[2]The tribunal declares that each of the claimants’ complaints under section 23 of the Employment Rights Act 1996 is well-founded.[3]The respondent is ordered to pay to:a. the claimant Mr Gabites the sum of £1,442.12 (gross) deducted in contravention of section 13 of the Act;b. The claimant Miss Tuite the sum of £997.84 (gross) deducted in contravention of section 13 of the Act;REASONS
Issues to be determined
[1]At the outset it was confirmed that the issues had been agreed at a hearing before EJ Ord on 10 January 2023. This was a complaint of unlawful deduction from wages and the issues were agreed as being: 1.1. Did the respondent make unauthorised deductions from each of the claimant’s wages? 1.2. If so, how much was deducted in each case? Orders Case Nos: 2403659/22 and 2403660/22[2]A number of orders were made for the conduct and good management of the proceedings during the course of the Hearing. In making the orders the tribunal considered the overriding objective and the Employment Tribunals Rules of Procedure 2013. Orders included the following.[3]It was agreed and ordered that the correct name of the respondent was Andron Contract Services Limited.[4]A short break was given to allow the respondent the opportunity to obtain further instructions in relation to the information provided at pages 176 and 177. Submissions[5]The claimants made a number of detailed submissions which the tribunal has considered with care but does not rehearse in full here. In essence it was asserted that:-5.1 following the TUPE transfer they were entitled to be paid their annual salary together with any overtime and/or bonus payments;5.2 they were assured that they would receive regular payments of annual salary every four weeks rather than on a monthly basis;5.3 however, irregular payments were made every four weeks without a proper explanation;5.4 they were assured that they would be paid the correct amount of annual salary over a 12 month period;5.5 For the tax year 2021/2022 this did not happen. there was a shortfall in both of their wages but the respondent refused to accept this even after they had provided the full calculation having had legal advice;5.6 for the first time in preparation for this hearing the respondent has provided the breakdown of the payments to them up until August 2022. However, this document does not explain the basis on which it has been calculated or the basis on which payment was made. It gives a clear indication that the respondent pays wages on the basis of hours worked rather than on the basis of entitlement to an annual salary[6]Consultant for the respondent made a number of detailed submissions which the tribunal has considered with care but does not rehearse in full here. In essence it was asserted that:-6.1 following the TUPE transfer the employment status of the claimants did not change. The claimant Mr Gabites was entitled to an annual salary of £29,736.96 or £11.44 per hour. The claimant Miss Tuite was entitled to an annual salary of £21,715.20 or £10.44 per hour; Case Nos: 2403659/22 and 2403660/226.2 the documents at pages 176 and 177 show each of the payments made by the respondent to each of the claimants in the period June 2021 to August 2022. This shows that each of the claimants was in fact paid more than the amount due to them in that entire period. Any irregularities in the tax year 2021/2022 were corrected in future payments in the following tax year. There was a pay increase for both claimants in April 2022 which is shown in the documents as producing a new hourly rate of £10.84 for Miss Tuite and £11.84 for Mr Gabites. However, even taking into account that pay increase, each of the claimants was paid more than their annual entitlement;6.3 the fact that the pay slips and the documents at pages 176 and 177 refer to the number of hours worked, an hourly rate of pay and, where appropriate, rates of holiday pay, does not mean that the claimants were not paid their entitlement for an annual salary. This is just a feature of the way in which the payroll system works;6.4 there was no deduction from wages. Evidence 6. No oral evidence was heard. Neither party relied on any witness evidence. It was noted that at a previous hearing no order for the exchange of witness statements had been made. Both parties confirmed that it had been agreed that the parties would rely solely on representations and the documentary evidence.Evidence
[7]An agreed bundle of documents was presented. Additional documents were presented during the course of the Hearing, either in accordance with the Orders outlined above or with consent. References to page numbers in these Reasons are references to the page numbers in the agreed Bundle.Facts
[8]Having considered all the evidence the tribunal has made the following findings of fact. Where a conflict of evidence arose the tribunal has resolved the same, on the balance of probabilities, in accordance with the following findings.[9]The Respondent is a national provider of cleaning, security, and facilities management services throughout the UK.[10]At the beginning of the tax year 2021/2022 each of the claimants was employed by Mitie Limited. Mr Lee Gabites was entitled to an annual salary of £29,736.96 plus payments for overtime and bonuses. Miss Maria Tuite was entitled to an annual salary of £21,715.20 plus payments for overtime and bonuses. Both claimants were paid their salary in 12 equal monthly instalments on 27th of each calendar month. Case Nos: 2403659/22 and 2403660/22[11]Each of the Claimant’s employment transferred to the Respondent under the Transfer of Undertakings (Protection of Employment) Regulations 2006 on 1 June 2021.[12]In advance of the transfer discussions took place as to the effect of the TUPE transfer on the employment of the claimants. The respondent provided a Statement of Terms and Conditions for each of the claimants to sign. In Mr Gabites’ statement (p53-54), under the heading “Pay” the word “salary” was ringed and the figures £29,736.96 £11.44 ph were added in handwriting. In Miss Tuite’s statement (p55-56), under the heading “Pay” the word “salary” was ringed and the figures “£10.44ph (£21,715.20)” were added in handwriting. Both statements included the following “You will be paid 4 weekly…”[13]Both claimants objected to being paid 4 weekly and sought reassurance that they would remain as salaried employees, not hourly paid, following the transfer. Correspondence took place between the claimants, Mitie and the respondent in advance of the transfer. This included an email (page 156) from the respondent’s HR department which stated: Unfortunately it is not possible for Lee or Maria to continue being paid on 27th of each month once transferred over to Andron FM. We operate a 4 weekly payroll for all of our employees regardless of whether they are paid hourly or salaried and regardless of seniority, our Board of Directors receive their pay every 4 weeks. I can confirm that pay figures will be honoured in line with the TUPE regulations however as you will be well aware, pay date/ frequency is not a contractual element of terms and conditions of employment and therefore Andron FM are within their legal right to change this as part of the measures which has been suitably communicated. Ultimately the change from monthly paid to 4 weekly paid will reduce the total amount received on a given pay day however it will also mean that the employees will receive 13 pays in a calendar year opposed to 12 so this balances out. I have included for ease an example calculation to illustrate this. NOTE: the salary chosen is just for illustration purposes only and not in relation to an individual employee. Monthly pay: £25000 per annum salary / 12 months = £2083.33333 £2083.33333 X 12 = £25000 4 weekly £25000 per annum salary / 52 weeks (per year) x 4 weeks (pay period) = £1923.07692 £1923.07692 X 13 = £25000 Case Nos: 2403659/22 and 2403660/22[14]Following the TUPE transfer the respondent paid to each of the claimants irregular sums on a 4 weekly basis. The claimants had access to payslips on an intranet service but these did not contain a breakdown which the claimants could understand. However, the claimants believed that the payslips, and the irregular amounts paid each month, were calculated on the basis of the claimants being paid as hourly rate employees, and that the respondent was failing to pay to them their entitlement to annual salary. They raised an internal complaint in relation to the alleged failure to pay to each of them the total wages due to be paid to each of them for the period 1 June 2021 to the end of the tax year 2021/2022.[15]The respondent asserted that all correct payments had been made for the tax year. By email dated 8 April 2022 (p161) Peter Jones of the respondent stated: All I can do at this point is assure you that your pay from Andron is correct. All hours worked & time on leave have been paid correctly.[16]The claimants refused to accept this and these complaints were made to the tribunal.[17]The Grounds of Resistance includes the following: The First Claimant is employed by the Respondent as a Site Supervisor, contracted to work 50 per week for an hourly rate of £11.44. This increased to £11.84 on 1 April 2021. The Second Claimant is employed by the Respondent as a Receptionist, contracted to work 40 hours per week for an hourly rate of £10.44. This increased to £10.84 on 1 April 2021. The Respondent asserts that in the original Employee Liability Information sent to them by the transferor on 27 May 2021, it stated that the Claimants pay frequency was 4- weekly. Therefore, the Respondent continued to pay them as per the ELI when their employment transferred over.[18]The claimants provided a Summary of the monies owed, the shortfall in wages from 1 June 2021 to the end of the tax year (see Appendix 1). This Summary contains an accurate record of the wages paid to the claimants by the respondent in that period of time, based on records of payments obtained from HMRC ( pages 218-219). The respondent has not challenged the accuracy of that summary.[19]In preparation for this hearing the respondents prepared a document for each of the claimants (pages 176 and 177) setting out the payments of gross wages for the period 11 June 2021 to 5 August 2022. This includes a Case Nos: 2403659/22 and 2403660/22 column indicating number of hours worked, and under the heading “Notes” contains reference to number of hours worked, holiday pay, back pay, with no satisfactory explanation as to how the sums were calculated.The Law
[20]Section 13(1) Employment Rights Act 1996 (ERA 1996) provides that an employer shall not make a deduction from wages of a worker employed by him.[21]s13(3) ERA 1996 provides : “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… as a deduction made by the employer from the worker’s wages on that occasion”. Determination of the Issues[22]This includes, where appropriate, any additional findings of fact not expressly contained within the findings above but made in the same manner after considering all the evidence.[23]The claimants were entitled to payments of an annual salary. The respondent was obliged to carry on paying that annual salary following the TUPE transfer, together with any additional payments for overtime and/or bonuses.[24]The respondent confirmed that there would be no change to the claimants’ terms and conditions of employment following the TUPE transfer. The only change following the TUPE transfer was that they would be paid on a four weekly basis, instead of a monthly basis. The e-mail at page 156 shows that the intention was that the claimants should continue to receive their annual salary but in 13 equal 4 weekly payments, not 12 equal monthly payments. The e-mail shows that the claimants could expect what they had previously enjoyed with Mitie - the same figure every 4 weeks on 13 occasions throughout the calendar year, together with any additional payments for overtime/ bonuses. For the tax year 2021-2022 Mr Gabites’ annual salary of £29,736.96 could be expected to be paid by 13 equal four weekly payments of £2287.49. For Miss Tuite, her annual salary of £21,715.20 could be expected to be paid by 13 equal 4 weekly payments of £1670.40. However, the respondent paid irregular sums for each four week period following the transfer, without proper explanation, but appeared to be making payments in accordance with the number of hours worked rather than in accordance with the claimants’ entitlement to an annual salary. The documents prepared by the respondents for this hearing at pages 176 and 177 contain a detailed breakdown of pay. The calculations have not been fully explained but the notes indicate number of hours worked and the appropriate rate of hourly pay. The pay slips available to the Case Nos: 2403659/22 and 2403660/22 claimants on the Internet service did not show a breakdown of pay for each four weekly payments which was easy for them to understand. The claimants were not told and did not agree to any shortfall in pay for one calendar year being carried forward and paid the next calendar year. There was a clear indication from the respondent prior to commencement of this hearing that all payments due for the tax year 2021/ 2022 had been paid during that tax year. Until the claimants received the documents at pages 176 and 177 in preparation for this hearing, it had not been explained to them that any shortfalls in four weekly payments for the tax year 2021/2022 had been paid in later four weekly payments in the tax year 2022/2023. The documents provided by the respondent at pages 176 and 177 fail to identify any shortfall in the tax year 2021/2022 and how it was made-up in the following tax year. The respondent has failed to provide a satisfactory explanation of documents 176 and 177. It does not provide a satisfactory explanation of any repayments or making up of any previous shortfall or how that was calculated. The claimants were not told how and in what manner there had been a shortfall and how this had been calculated.[25]In all the circumstances the tribunal accepts the calculation of each of the claimants’ shortfall in wages as appears in Appendix 1.[26]In relation to Mr Gabites by the end of the tax year 2021/2022 there was a shortfall in his wages of £1442.12. This amounts to a deduction from wages within the meaning of s13 ERA 1996. The respondent is ordered to pay that gross sum to the claimant after deduction of the appropriate rates of tax and National Insurance.[27]In relation to Miss Tuite by the end of the tax year 2012/2022 there was a shortfall in her wages of £997.84. This amounts to a deduction from wages within the meaning of s13 ERA 1996. The respondent is ordered to pay that gross sum to the claimant after deduction of the appropriate rates of tax and National Insurance.