Mrs G Miller v Manchester University NHS Foundation Trust: 2408973/2023

EMPLOYMENT TRIBUNALS

Case No 2408973/2023

Between

Mrs G MillerClaimant

Manchester University NHS Foundation TrustRespondent

Before

Employment Judge Humble

Date 17 July 2024

JUDGMENT

The Judgment of the Employment Tribunal is as follows:

[1]The respondent did not make unauthorised deductions from the claimant’s wages and was not in breach of the claimant’s contract of employment in relation to holiday pay. That claim is dismissed.

[2]The respondent did not make unauthorised deductions from the claimant’s wages and was not in breach of the claimant’s contract of employment in relation to sick pay. That claim is dismissed.

[3]The respondent was in breach of the claimant’s contract of employment in respect of a failure to pay the claimant his full statutory notice pay. An additional £2539.80 is owed to the claimant.

[4]The respondent is ordered to pay the claimant the sum of £2539.80.

REASONS

Findings of Fact

[1]The hearing took place on 15 and 16 July 2024 at Manchester Employment Tribunal. The claimant was represented by Mr Miller, her husband, and both the claimant and Mr Miller gave evidence. The respondent was represented by Mr Williams of Counsel and evidence was given by Ruth Williamson, the respondent’s deputy director of HR and Organisational Development. There was an agreed bundle of documents which extended to 319 pages.

[2]Evidence in chief was taken as read based on the witness statements provided by the parties. The claimant has a disability, an acquired brain injury, and as a consequence the main part of the claimant’s evidence was provided by Mr Miller who had been closely involved in the matters that led to the claim. The respondent took the view that it was not necessary to cross examine the claimant, but the tribunal asked the claimant whether she wished to take the stand and she chose to do so. In the event, she was able to answer questions from the tribunal with clarity. Case No. 2408973/2023 2

[3]The evidence and closing submissions were concluded on 15 July 2024 and an Oral Judgment was given on 16 July 2024. This took the form of the findings of fact which follow. Findings of Fact The Employment Tribunal made the following findings of fact on the balance of probabilities (the tribunal made findings of fact only on those matters which were material to the issues to be determined and not upon all the evidence placed before it):

[1]The claimant commenced work within the National Health Service in 1985. She had a break in service between 1997 and 2001 when she lived in Kuwait with her family. The claimant relocated to Cumbria in 2001 where she commenced work at West Cumberland Hospital in Whitehaven in an administrative role. She also worked as a medical secretary with the NHS Learning Disabilities Service in Cumbria. In 2015 the claimant moved to Manchester and commenced work with Manchester Mental Health Trust. In 2018 the claimant worked with NHS Warrington & Halton Hospital and, on 3 June 2019, she started work for Manchester University NHS Foundation Trust (“the respondent”). The claimant was employed by the respondent as a Team Secretary, initially working 22.5 hours a week which was increased to 25.5 hours a week from 1 April 2020 and was worked hours over three days.

[2]The Tribunal accepted the claimant's clear and cogent evidence that she did not have any break in service with the NHS for a 20 year period, she always obtained a new job before she moved to the next one. There was an error in the initial claim form, prepared by Mr Miller on the claimant's behalf, which incorrectly stated the start date as the date she commenced work for the respondent rather than the date she commenced her continuous service. The period of the claimant's continuous service was supported by an employment schedule, disclosed as an attachment to Mr Miller’s witness statement, which showed that the claimant had been employed by various NHS Trusts since 2009. The respondent did not dispute that the claimant had continuous service with various NHS employers for at least that period of time.

[3]On 10 January 2021 the claimant collapsed at home and was admitted to hospital. It transpired that she had suffered a subarachnoid haemorrhage for which she was required to undergo emergency surgery, and thereafter she was absent from work. In the event, she did not recover sufficiently to return to work and her employment was ultimately terminated due to incapability on 24 May 2023.

[4]The claims in this case arise from disputes in relation to payments made, or not made, during the claimant’s absence from work and upon the termination of her employment. In brief, the three heads of claim can be summarised as:• Accrued holiday pay, which was identified at the outset of the hearing as an unauthorised deduction from wages, breach of contract and a claim under the Working Time Regulations; Case No. 2408973/2023 3

• Sick pay, which was identified as an unauthorised deduction from wages and a breach of contract claim; and

• Notice pay in relation to alleged underpayment of notice, which was identified as a breach of contract claim. Holiday Pay Claim

[5]The holiday pay claim occupied much of the evidence. There were some rather complex calculations put before the tribunal, particularly from the claimant's side, although the sum at issue, based on an alleged shortfall of 56.5 hours, was only about £700 at its highest. During the course of the evidence and submissions the tribunal was able to distil the dispute down to the party’s different interpretations as to how holiday pay should be treated during the holiday year which ran from 1 April 2020 to 31 March 2021. The claimant was absent with long-term ill-health from partway through that leave year, 12 January 2021, onwards.

[6]The claimant's calculation in relation to holiday pay for the 2020/2021 leave year was broken down into two parts. She sought accrued holiday pay for the period from 1 April 2020 to 11 January 2021, which she calculated as 164 hours, of which 119.5 hours were said to have been taken and therefore 44.5 hours remained payable in relation to the first part of that holiday year. In respect of the second part of the year, from 12 January to 31 March 2021, the claimant sought a reduced entitlement based, in essence, upon ‘ordinary leave’ (although it was not described in that manner by either the claimant or the respondent). Ordinary leave is identified under Regulation 13 of the Working Time Regulations and is payable irrespective of whether an employee is on long-term sick leave. There is, within the claimant’s terms and conditions of employment, a contractual equivalent to the statutory concept of ‘ordinary leave’ but we refer to ordinary leave for the purposes of this judgment. It should be noted that it was agreed between the parties that the claimant’s holiday entitlement was calculated based on hours rather than days, and it was agreed that her ordinary leave amounted to 102 hours per annum based her part-time hours of work. This meant that the claimant was, while absent due to ill health, entitled to 102 hours of accrued holiday pay each year. That much was agreed between the parties. The second part of the claimant’s calculation is based on the period from 12 January to the end of the holiday year, 31 March 2021. The claimant’s assessment of ordinary leave during this period amounted to 36.5 hours.

[7]The respondent on the other hand advanced the case that where an employee is absent with long-term ill health for part of the year then they are only entitled to payment of the ordinary leave at the year-end which has accrued across the full year. This was said by Ms Williamson to amount to custom and practice within the respondent’s organisation.

[8]The question for the Tribunal to address was simply how much accrued holiday was payable to the claimant on termination, and more specifically, how much holiday was the claimant entitled to carry forward from the holiday year ending in 2021? The Tribunal finds that this is limited to the ordinary Case No. 2408973/2023 4 leave under Regulation 13 and therefore 102 hours, being the sum which had been agreed between the parties as four weeks pay (ordinary leave) for the purposes of the holiday year. The claimant had, on her own case, taken 119.5 hours by the holiday year end and therefore the Tribunal find that there is no additional holiday pay due to her.

[9]Holiday pay cases carry with them some complexities and arguments can be advanced that ordinary leave, under Regulation 13, is a composite payment which should be apportioned throughout the leave year for carry forward purposes. No such argument was advanced here and the Tribunal finds that ordinary leave was taken first by the claimant such that her entitlement was exhausted by the year end and no carry forward is applicable.

[10]On the claimant’s calculation that means that the 81 hours she claimed for that holiday year is not payable. Those 81 hours can be offset against the total balance which the claimant said was owed of 56.5 hours. Accordingly, the effect is that there was no holiday pay due to the claimant upon termination.

[11]It follows that the holiday pay claim does not succeed. That claim is dismissed. Sick Pay Claim

[12]It was agreed between the parties that the claimant’s contractual entitlement for sick pay is six months’ full pay followed by six months of half pay. Her sick pay ended on 11 January 2022 and the claimant principal argument is that, under the terms of her contact, contractual sick pay should have been re-instated at half pay from 12 January 2022 up to the termination date on 24 May 2023. This is pursuant to a provision in the respondent’s terms and conditions of employment contained in the Agenda for Change Handbook (“AFC terms”). It was accepted by the parties that the AFC terms are incorporated into the claimant's contract of employment.

[13]There was a secondary point which arose at the start of the hearing. During the claimant’s period of absence she received 157 days of full pay rather than 182 days (or six months) followed by 182 days of half pay. The shortfall of days in this case is explained by another contractual provision of the respondent which requires that where an employee is absent in the 12 months preceding a period of long-term absence, any previously paid sickness absence shall be deducted from the six month period of full pay. The respondent’s case was that the claimant was paid for a period of absence of six days between 6 and 11 October 2020, and of twenty days during a period from 10 to 29 November 2020. This was the reason relied upon by the respondent for the deduction from the six months of full pay.

[14]At the outset of the hearing the claimant sought leave to bring claim in relation to the 26 days which were deducted from the claimant's full sick pay. The claimant's case in relation to the six days in October 2020 was that this was not sick leave but a period during which the claimant was required to isolate due to having come into contact with a relative who had Covid. In relation to the 20 days in November 2020, this was said to be a period of bereavement leave following the death of the claimant’s mother rather than a period of paid Case No. 2408973/2023 5 sick leave. The Tribunal explained at the outset of the hearing that th is additional claim for unpaid days of full pay would require an amendment to the particulars of claim since it did not form part of the pleaded case. The Tribunal said that it would hear evidence on the point and noted that there was a potential time element to consider and so would, after taking evidence, make a decision on whether to allow the amendment and, if so, determine the matter including the timing issue.

[15]Returning to the claimant's principal argument, the provisions relied upon in the AFC terms are at clauses 14.10-14.13 (pages 55-56 of the bundle) which, in so far as relevant for our purposes, provide: “14.10 Sick pay for those who have exhausted sick pay entitlements should be reinstated at half pay, after 12 months of continuous sickness, in the following circumstances:• staff with more than five years’ reckonable service:- sick pay will be reinstated if sick pay entitlement is exhausted before a final review meeting for long-term absences taking place”. The respondent accepted that the claimant had more than five years’ ‘reckonable’ service, a concept which it distinguishes from continuous service and is defined in the AFC terms (something which we will deal with later in the Judgment). “14.11 Reinstatement of sick pay should continue until the final review meeting has taken place... 14.12 These arrangements…will only apply where the failure to undertake the final review meeting is due to delay by the employer. This provision will not apply where review is delayed due to reasons other than those caused by the employer”. 14.13 Employers will also have discretion to extend the period of sick pay on full or half pay beyond [twelve months in the claimant’s case]:

• where there is the expectation of a return to work in the short-term…[an expectation which did not apply in this case];

• in any other circumstances that the employer deems to be reasonable”.

[16]The respondent’s case was that the wording in section 14.13 gave the respondent a discretion as to whether or not to exercise the re-instatement of sick pay under clause 14.12. The Tribunal did not share that interpretation of those clauses. The word “also” at 14.13 was taken by this Tribunal to introduce additional circumstances in which an employee might receive extended sick pay and not to mean that the discretion also applied to the preceding clause. If it was the respondent’s intention to exercise a discretion over clause 14.12 it could have stated that in clear and unambiguous terms, for example, either by stating at 14.10 “At the discretion of the employer, sick pay for those who have exhausted sick pay entitlements should be reinstated at half pay..” or, at 14.12, by stating that “These arrangements are at the Case No. 2408973/2023 6 discretion of the employer and …will only apply where the failure to undertake the final review meeting is due to delay by the employer, [etc.]”. The discretion under clause 14.13 was therefore an additional circumstance in which the respondent could decide to make a payment and did not confer enable the respondent to exercise a discretion not to make payment where clauses 14.10 to 14.12 applied.

[17]Although the tribunal found that the respondent did not have a general discretion to withhold pay under clause 14.12, there remains a requirement upon the claimant to show that the final review meeting was delayed due to the respondent or, in other words, that the delay was caused by the employer.

[18]After one year of absence, and shortly after expiry of the claimant's sick pay, a stage 3 sickness review took place on 26 January 2022 (pages 165-166). Among other things, the letter from the respondent to the claimant which followed that review stated: “You explained that you have seen an improvement in your mobility and speech had improved but when you are anxious your speech is affected. You also explained that you are tired and this is a side effect from the aneurism and further treatment.” It was stated that the claimant was receiving physio, and went on to state: “We discussed timescales for your recovery, and it is expected to be roughly around two years. You explained that you would really like to return to work in some capacity but felt this would not be possible at this point in your recovery. We discussed the likelihood of returning to some form of work and agreed that unfortunately this is unlikely in the foreseeable future. [It was] explained that it therefore looked likely that the case may progress to a final stage sickness hearing where your contract of employment may be terminated.” There was a substantial delay thereafter, from 26 January 2022 until the stage 4 meeting of 24 May 2023 at which the claimant's employment was terminated.

[19]The challenge for the Tribunal was determining to what extent that delay can be said to have been caused by the respondent and that required examining the documentation in some detail. There was an Employee Health and Wellbeing Service Report, essentially an occupational health report, on 1 February 2022 (page 168) which stated that the claimant “remains unfit to return to work…she was advised that it could take 18 months - 2 years for her to make an optimal recovery.” It also referred to her having a repeat scan in May/June 2022, and briefly concluded: “For now, we will await the above assessments and rehabilitation to continue, and I will also request reports from her treating professionals after a period of further rehabilitation to offer clearer guidance on likely prognosis of prospects of returning to work in some capacity.”

[20]There was a manager update report produced by the Employee Health and Wellbeing Service on 30 May 2022 (page 180-181). This stated that the claimant was “continuing to face delays in rehab treatment which was further delaying her progress”, and: “She is unfit in any capacity and I am unable to predict the timescale of recovery based on the assessment undertaken on 3rd May 2022.” It further stated: “I have requested consent from [the claimant] to gain a report from her treating specialist to determine her prognosis and treatment plan.” Case No. 2408973/2023 7

[21]There was a further such report (pages 185-187) dated 18 October 2022 which stated, “[The claimant’s] recovery continues at home with the support of the OT and Psychology Services. She will be having physio as part of the regime plan”. It stated that, “in my clinical opinion, [the claimant] is not fit for work in any capacity for the foreseeable future due to reported health symptoms”, and concluded “Providing clarity around what could now be considered, i.e. retirement, or other options, will provide much needed reassurance and help in achieving informed decisions”.

[22]There was a sickness review meeting on 22 November 2022. The letter which followed from that meeting (pages 190-192) stated, among other things, “[Mr Miller] confirmed that it is hard to say if they think [the claimant] will be able to return to work in the future. The neurologist, EHW and psychologist are saying that [she] is not fit for work, however you and [the claimant] are optimistic”. The letter also stated, “We all agreed that we would hold off with the stage 4 meeting until the New year after you have the results of the brain scan”. It was disputed by the claimant as to whether there was any agreement in those terms. Mr Miller, in his evidence, indicated that they were simply informed that the respondent would hold off the stage 4 meeting until after the brain scan, but he did accept that he did not challenge or dispute that assertion at the meeting. There was also no response to that letter from the claimant seeking an earlier termination, or indeed a reinstatement of her sick pay. There was also a reference in that letter to the possibility of ill health retirement and it was not clear from the evidence before us to what extent that matter may have affected the timing of the subsequent dismissal. There was no other evidence presented on that matter, aside from an assertion from Mr Miller that the pension was not received until June 2023.

[23]The claimant underwent a brain scan on 26 March 2023. On 28 March 2023 a further Occupational Health appointment took place. It was said by the respondent that the claimant did not attend that appointment, but it was more accurate to say that the claimant missed the telephone call when the appointment was scheduled to take place, it being a telephone based appointment. The claimant attempted to call back but was unable to partake in the review, and it was subsequently rearranged to 25 April 2023. Thereafter things moved more quickly. There was a stage 3 review meeting on 11 May 2023 and the stage 4 meeting was convened on 24 May 2023 at which the claimant's employment was terminated.

[24]There were undoubtedly significant delays in the process. The extent to which these can be said to have been caused by the respondent is difficult to assess. Some delays were no doubt unavoidable in terms of awaiting medical appointments and updates, and there appears to be an element, particularly during the early part of that period, when the claimant still wished to return to work at some stage in the future. It is a difficult balancing act for employers when considering employee capability where the prognosis is not good, and requires balancing the option of accelerating a capability process against waiting for a period of recovery and further medical assessment. While this was a finely balanced decision, the tribunal was required to remind itself that the onus is on the claimant to prove her case, and on the evidence before us the tribunal find that it could not be said that the delay was caused by the Case No. 2408973/2023 8 respondent such that occupational sick pay was payable under section 14.12. Other factors were at play, including delays in awaiting medical assessments, which cannot be said to have been caused by the respondent, and the claimant’s desire to recover and return to work.

[25]There is an additional discretion, which the Tribunal finds applies under 14.13, and it is not an unfettered discretion. It is one which is required to meet a perversity test in the manner set out in, among other cases, in Cantor Fitzgerald International v Horkulak

2005 ICR 402

, CA, a case to which we were referred by the respondent. However, the perversity argument was not before us and, further, in the circumstances of this case there was no evidence that the decision not to exercise a discretion to pay additional sick pay was, or could be said to be, perverse given the circumstances described above.

[26]In relation to the 26 days, the second part of the sick pay claim, this required an amendment which the tribunal was not minded to allow given the substantial delay in the presentation of the application to amend. Even if the tribunal did allow the amendment, given our findings above, there was no series of deductions in relation to sick pay which could be relied to bring the additional 26 days shortfall from January and February 2021 within time. The tribunal does not accept that it was not reasonably practicable for the claimant to present the claim within three months of the date of the underpayment, which is the appropriate legal test in an unauthorised deduction from wages and a breach of contract claim. Even if it was not reasonably practicable to present the claim in time for the reasons which the claimant provided, in essence that she did not have access to the relevant payment information during her employment, the claimant and Mr Miller had that information upon termination and could have presented that claim at the same time as the particulars of claim were submitted, or at the very latest upon disclosure of all relevant documents. They did not do so until the morning of the hearing and the tribunal therefore finds that it was not presented within such further period as the tribunal deems to be reasonable for the purposes of the statutory test.

[27]It follows that the sick pay claim is not made out and is dismissed. Notice Pay Claim

[28]The claimant’s contract of employment provides, at clause 7 (page 67 of the bundle): “For the purposes of statutory employment rights your continuous employment started from the date of commencement with the Trust as set out in Part 1”, which states the date the claimant commenced in that particular post as 17 June 2019, and “Your contractual continuous NHS service will be determined under the terms of the Agenda for Change handbook as amended from time to time for entitlements including redundancy, maternity, sick pay and annual leave”. Clause 19 of the contract provides, in essence, that the minimum periods of notice which apply are one week for each complete year of service up to a maximum of 12 weeks where service is 12 years or more.

[29]Prior to taking evidence the tribunal drew the respondent’s attention to section 218 of the Employment Rights Act 1996, specifically subsection 8: Case No. 2408973/2023 9 “(8) If a person employed in relevant employment by a health service employer is taken into relevant employment by another such employer his period of service at the time of the change of employer counts as a period of employment with the second employer and the change does not break the continuity of the period of employment.” Subsection 10 then sets out various health service providers which fall within the NHS, which includes NHS Trusts and NHS Foundation Trusts. The respondent is an NHS Foundation Trust.

[30]The respondent did not dispute that the claimant was continuously employment by NHS Trusts, or NHS Foundation Trusts, for 12 years or more. While the evidence before us focussed upon the AFC terms, it is the statutory provision which is of more significance in determining this case. The respondent’s position was that the AFC terms did not take account of previous employment with other Trusts for the purpose of calculating notice pay since it is not regarded as reckonable service, the term used in the AFC terms to determine an employee’s length of service for the purpose of qualifying for certain employment rights, clauses 12.1 to 12.3 refer (page 50).

[31]It was said in submissions that notice pay is a creature of contract and the contract provides only for notice to be calculated based on service with this specific Trust or “reckonable service”. It was also said that notice “cuts both ways” and suggested the claimant would not want to be bound by a requirement to give 12 weeks’ notice to her employer. That, however, is not a requirement of the Employment Rights Act 1996. The relevant provisions are at section 86 subsection (1), which state: “The notice required to be given by an employer to terminate the contract of employment of a person who has been continuously employed for one month or more –(a) is not less than one weeks’ notice if his period of continuous employment is less than two years; and

(b) is not less than one week’s notice for each year of continuous employment if his period of continuous employment is two years or more but less than 12 years” Sub-section (c) puts a 12 week cap on the notice the employer is required to give an employee irrespective of any additional continuous service they might have, while section (2) provides: “The notice required to be given by an employee who has been continuously employed for one month or more to terminate his contract of employment is not less than one week.” An employee is therefore only required, by statute, to provide a maximum of one weeks notice.

[32]The respondent accepted that the claimant had continuous service in excess of 12 years. It cannot contract out of the statutory minimum period of notice Case No. 2408973/2023 10 which it is legally required to give under the terms of the Employment Rights Act 1996. The definition of “continuous employment” which is set out in section 86 is covered under Part 15 Chapter 1 of the Act and the provisions to which we have referred, sections 218 (8) and (10), specifically provide that there is no break of continuity where there is a change of employer within NHS Trusts. The respondent is therefore in breach of the claimant's contract of employment and is ordered to pay the claimant eight weeks’ pay.

[33]The Tribunal accepts the claimant's calculation, 204 hours at £12.45 which gives a figure of £2,539.80.

[34]The Judgment of the Employment Tribunal is therefore that:(1) The respondent has not made unauthorised deductions from the claimant’s pay and is not in breach of contract in relation to holiday pay. The holiday pay claim is dismissed.

(2) The respondent has not made unauthorised deductions from wages and was not in breach of contract in relation to the contractual sick pay. That claim is dismissed.

(3) The respondent is in breach of contract in relation to its failure to pay the claimant her full statutory notice pay. The respondent is ordered to pay the claimant £2,539.80.