Mrs H Matthews v Razors Edge Group Ltd and Mr Roberts (Manchester) Ltd: 2409756/2020
EMPLOYMENT TRIBUNALS
Case No 2409756/2020
Between
Mrs H MatthewsClaimantRazors Edge Group Ltd and Mr Roberts (Manchester) LtdRespondent
Before
Employment Judge SharkettMr A Marshall for claimantMr J Searle (instructed by Counsel) for respondentDate 1 November 2023
REASONS
[1]This was a Preliminary Hearing to determine the employment status of the claimant when her working relationship with the respondent ceased. It is the claimant’s case that notwithstanding the fact that there was an agreed change in her employment status in 2017 from that of an employee to a selfemployed contractor, the true relationship remained that of an employee and she is entitled to pursue the statutory claims of unfair dismissal, notice pay, unlawful deduction of wages in respect of pay and annual leave and a claim of unlawful discrimination by reason of her part time worker status and the protected characteristic of sex and disability. The disability relied on being that of the long-term effects of coronavirus.[2]The respondent disputes that the claimant was an employee or a worker at the time her relationship with the respondent terminated. It is the respondent’s case that the claimant actively pursued the change in her employment status. It was the respondent’s case and that she was a self-employed contractor who hired a chair in the respondent’s premises in order to undertake her role as a hairdresser on her own clients and was neither an employee or a worker at the time the relationship between them ended. In written submissions received following conclusion of the evidence in this matter the respondent conceded that the claimant was a limb (b) worker for the purposes of section s30 (3)(b) Employment Rights Act 1996 (ERA 1996), but not an employee.[3]The issues to be determined by the Tribunal were identified as:a. Was the claimant working under a contract of employment and therefore an employee of the respondent within the meaning of section 230 (1) of ERA 1996.b. If not an employee, was the claimant a worker for the respondent within the meaning of section 230(3)(b) ERA 1996, and/or Regulation 2(1) of the Working Time Regulations 1998, Regulation 1(2) of the Part-time Workers (prevention of Less Favourable Treatment) Regulations 2000 in that: i. they worked under a contract whereby the claimant undertook to do or to perform personally any work or services for the respondent, and ii. the respondent was not by virtue of that contract a client or customer of any profession or business undertaking carried on by the individual?c. Whether the claimant was ‘in employment’ for the purposes of s83(2) Equality Act 2010[4]Mr Marshall of Counsel appeared on behalf of the claimant and called claimant to give evidence.[5]Mr Searle of Counsel appeared on behalf of the respondent and called evidence from:a. Mr Stewart Black – owner and director of the respondent,b. Mr Tony Hefferman - General Manager of the respondent,c. Mr James Roberts – former manager with the respondent and now owner of James Roberts Salon.
The Issues
[6]All witnesses gave evidence in chief by way of written witness statements which had been exchanged and had been read by the Tribunal prior to hearing oral evidence. The Tribunal was also provided with a joint bundle of documents consisting of 302 pages. All references to page numbers within the body of this judgment are references to pages in the bundle provided unless otherwise stated.
FINDINGS OF FACT
[7]Having heard all the evidence, both oral and documentary, and having regard to the submissions of the parties, the Tribunal makes the following findings of fact on the balance of probabilities. This Judgment is not a rehearsal of all the evidence heard, but is based on the salient parts of the evidence on which the Tribunal has based its decision.[8]The claimant commenced work as a senior stylist for the respondent at one of its hair salons in Manchester City centre on 7 August 2007. Whilst the claimant does not recall receiving a written contract of employment at that time a signed copy of a statement and terms and conditions of employment, dated 2 November 2007, was produced and it was not disputed that it was her signature on the document (p44). It is not disputed that the claimant was an employee when she started to work for the respondent.[9]The claimant was initially employed to work 40 hours per week over five days, but following a return from maternity leave in July 2010 the respondent agreed that she would work 24 hours per week over three days.[10]In September 2015, the claimant moved to work at another of the respondent’s salons, ‘James Roberts Hair & Beauty’. She moved with the consent of the respondent and continued to work the same hours. The respondent had historically owned/operated a number of salons within its Group, one of which was ‘James Roberts Hair & Beauty’ (the Salon), which was managed by Mr James Roberts (Mr Roberts), on behalf of the respondent. Mr Roberts continued to manage the Salon on behalf of the respondent until 6 July 2020 when it transferred to Mr Roberts (Manchester) Limited. Whilst not relevant for the purposes of this preliminary hearing, it is not disputed that the TUPE Regulations applied to this transfer (p216). At the time of the transfer there were no hairstylists employed at the Salon. The only employees were trainees and receptionists.[11]Mr Roberts had encouraged the claimant to move to the Salon in 2015 and it is clear from text messages between him and the claimant that the two had previously enjoyed a friendly relationship. On her move to the Salon the claimant on the whole continued to work 24 hours per week over three days. In or around January 2017, during a conversation or ‘chat’ between the claimant and Mr Roberts the subject of the claimant’s earnings arose. The claimant who was by this time a senior stylist with ten years’ experience was still earning little over the national minimum wage. It is not disputed that Mr Roberts told her that she would be better off by about £600 per month if she was to become self-employed. It is not disputed that the claimant expressed an interest in doing this and accepted in oral evidence that she did ask to become self-employed and was eager to do so, solely because she thought she would be £600 per month better off.[12]Enquiries were made of senior management within the respondent to see if the claimant would be allowed to ‘go’ self-employed and on 16 July 2017 the claimant started to rent a chair in the Salon where she worked, paying a percentage of her takings as rent. The respondent issued a P45 to the claimant (p81) and the claimant employed the services of an accountant to assist her in setting up her self-employed status with HMRC. The claimant ceased to be a member of the auto-enrol pension scheme and was no longer eligible for paid holiday or sick leave. It is the claimant’s case that Mr Roberts manipulated the claimant into wanting to become self-employed. The Tribunal finds that there is no real evidence to support this assertion and the claimant was a willing party to the change for the reasons given above. However it is clear from communication from the claimant to Mr Roberts that this was something he was in favour of, as the text seeks his permission in delaying the transition slightly so that the claimant could secure a mortgage (p92). It is also the claimant’s case that although the manner in which she was remunerated by the respondent changed, nothing else about her employment did. She was still required to attend the Salon during the hours in which she had previously been contracted to work and remained under the control of Mr Roberts in respect of the same aspects of her work as had previously been the case. She continued to use the same tools owned by the respondent that she had previously used and continued to be expected to help out her colleagues and cover reception duties when she was not busy with a client. Unlike some of the junior staff in Salon she was not required to wear a uniform but was required to follow a dress code along with the other stylists and this continued to be the case post 16 July 2017.[13]Mr Stuart Black who is the owner/director of the respondent was most helpful in explaining how the salons operated. Whilst he left the day to day management and responsibility for staff to Mr Tony Heffeman, the general manager of the respondent, it was clear from his evidence that he had a full understanding of the operation having been in the industry and ‘owned’ the respondent for many years. Mr Black explained that within the respondent there are currently 8 staff that are employed and 5 who are self- employed. Of the self-employed staff 3 of them were previously employed before becoming self- employed. He confirmed that all trainees were employed and that no one was permitted to become self-employed immediately following qualification. This is somewhat different to the practice of many salons known to the Tribunal which require all staff to become self-employed on qualification. Mr Black explained that the decision on whether a stylist can change from being employed to self-employed is always made by him and that any decision would be based upon the economic viability for the respondent, having looked at the income generated by the particular stylist. He explained that he did not deal with the administrative aspect of the change himself but left this to his general manager, Mr Heffeman, who was responsible for HR matters. Mr Black also explained that once a stylist converted to self-employment they would continue to work at the particular salon but would no longer receive wages through payroll; instead they would ‘rent a chair’ in the salon and the takings earned from work they carried out personally would be allocated under their name, together with commission for any products they sold to clients. From those takings the stylist would be charged a rent for the chair which would be set at one of the two figures decided by Mr Black, (45% or 50% of their takings) with 45% being norm and the minimum. The stylist would also be required to pay VAT on the amount charged as required by HMRC. The balance would be a gross payment made to the stylist for which they would then have to account to HMRC as self-employed income. Mr Black confirmed that the claimant was charged rental for the chair at the rate of 45% of her takings plus VAT and that although he was of the view that stylists were in a position to negotiate the rent with him, a lower rate than 45% would not be agreed as it would not be economically viable for the respondent. Having heard this evidence and that of the claimant on this matter the Tribunal find that it is clear that the claimant was not in a position to negotiate the terms upon which she rented the chair as this was predetermined by the respondent.[14]Mr Heffeman told the Tribunal that it is left to the stylists to approach him if they wished to become self-employed, which is what the claimant had done. He explained that if the respondent did not allow people to work on a self - employed basis through chair rentals, they would lose stylists to other salons. The Tribunal accepts that the practice of chair rental is common within the hair and beauty industry and the terms under which they are offered is produced by the National Hairdressing Federation. A copy of an ‘Independent Contractor Chair Renting Licence Agreement’ (the Agreement), was produced to the Tribunal although it is a version which post-dated July 2017 (p51). It was not signed by the claimant and the claimant is adamant that she was never shown this or any similar document. Mr Black explained that it would have been Mr Hefferman who would have given this to the claimant and that it was his responsibility to make sure it was signed and returned to Mr Black. Mr Hefferman was unable to say with any certainty that he gave a copy of this document to the claimant and could not explain why, if he had given her a copy, he had not made sure it was signed and returned to Mr Black. The Tribunal notes that under the terms of the Agreement any variation of the Agreement can only be made with the written consent of both parties and that “If the Agreement is not signed it will not be enforceable” (p70). On the basis that the claimant is quite clear that she has neither seen nor signed this Agreement and the respondent can neither confirm that it was signed nor produce a signed copy of the same, the Tribunal finds that on the balance of probability a copy of this Agreement was not provided to the claimant and nor was the content of the same brought to her attention. The Tribunal makes this finding not only because of the lack of confirmation or production of the signed Agreement but also because, if the terms of the Agreement had been made known to the claimant and completed in accordance with the guidance provided, it is unlikely that she would have had the need to send the text messages to Mr Roberts expressing her confusion and lack of knowledge about payment of VAT.[15]Mr Black gave oral evidence that if an individual did not return the Agreement they would usually assume that they had accepted it. Given the content of the Agreement and in particular the fact that it specifically provides that if it is not signed, it is not enforceable, the Tribunal does accept that on the balance of probability this would have been the approach of a person of Mr Black’s experience of business and the industry. The fact that the manner in which she was paid changed and that she was made aware that she would be no longer entitled to holiday pay, sick pay and membership of the auto-enrolment pension scheme is not indicative of conduct accepting the terms of the Agreement unless the same can be shown on the balance of probabilities. to have been brought it her attention and the respondent has been unable to do this.[16]Notwithstanding that the Tribunal finds on the balance of probabilities that the Agreement was not entered into by the parties, the question of the claimant’s employment status remains to be determined and the content of the Agreement itself may be of some assistance in determining what the respondent’s intentions would have been had the same been concluded and whether the conduct of the relationship reflected those intentions.[17]The background clause to the Agreement sets out that it is not the intention of the parties to form an employer and employee relationship and that each party will have ultimate command and authority over all aspects of their respective business or enterprise and be readily identified as having such authority. That they shall each be responsible for the rewards and losses of their respective businesses and that neither party is solely obligated to, or rely or depend on the decisions of the other.[18]Prior to July 2017 the claimant worked 24 hours per week over three days. Whilst the claimant has complained about being pressured to work more hours is not relevant to the issue to be determined by this Tribunal. As set out above, the claimant’s evidence is that once she became self-employed for payment purposes nothing else changed, she continued to work the hours she had previously been contracted to do and was expected to stay at the Salon until ‘home time’ even if she did not have any clients booked in. She was however only paid for the clients she saw and did not receive any payment for hours she worked when she was not seeing a client. She also had to obtain permission from Mr Rogers before she was allowed to take holiday, and that although her holiday requests were never refused, this was no different to the position when she was an employee prior to 2017. The Tribunal note that as late as May 2019, the claimant was still referring to Mr Roberts as her boss on social media and thanking him for his support in a colour competition (p117 & 118)[19]It is the claimant’s evidence that the only thing that changed at work when she became self-employed was that she was notified of how much she would be paid by invoice as opposed to a payslip. Mr Black was unable to say what the claimant’s working hours were explaining that this would have been down to Mr Heffeman or Mr Roberts. He did however confirm that the claimant would have been required to have been in the salon at 10am because otherwise it would not have been possible to book clients in. He also explained that she would have been required to stay at the salon in between appointments and would not have been permitted to go home before 5.30 if she did not have any more appointments for the day. He explained that if someone was trying to build up regular clients they cannot do that if they are not there when someone rings up or walks in. Mr Black also explained that the claimant would be required to tidy up after herself or if she did not have a client in, sit on reception if the receptionist was on a break. He said however that he was not there but that this would be usual. The Tribunal finds that given Mr Blacks experience of the way in which the salons work and the fact that he ‘owns’ them it is more probable than not that the description he has given is correct especially as it is consistent on the whole, with the account given by the claimant.[20]Mr Roberts disputes that the claimant was required to stay at work when she had no clients and says that she was free to come and go as she pleased as long as she did not have clients booked in. In support of his evidence he refers the Tribunal to a text message as evidence of the claimant deciding when she will come in (p112). Although this text is not dated, the Tribunal accepts the claimant’s evidence that the text refers to a time during the pandemic when rules required limited numbers of people in the salon at a time and that it was for this reason that she was indicating a time she would attend in order to accommodate this. The claimant explained that she would be required to attend work at 10am even if her first appointment was not until 12.15 (p235). She explained that during the periods when she did not have a client she would help the team in the salon by clearing up or perhaps helping with a colour. The claimant also explained that she was not paid for the hours when she was in the salon with no clients as she was only paid on the basis of the monies taken in respect of clients she had seen. Whilst the Tribunal accepts that the claimant may on occasion, have left the Salon during working hours if she did not have a client booked in, she could only do this if she remained contactable and available on her phone so that she could return to the Salon in the event of any walk in clients. In reality she was only able to pop out to the shops local to the Salon and would be expected to return at any time. On the balance of probabilities the Tribunal accepts that claimant’s account of being required to physically attend work at times she did not have clients and of carrying out unpaid work during that time. Mr Robert’s evidence was inconsistent with the evidence of Mr Black who was quite candid in his response to questions and explained that the claimant would have been expected to be in the salon during opening hours so that she would be able to take ‘walk ins’ or people that rang on chance for appointments. He explained that this would be normal for someone who was trying to build a bank of regular clients and was normal in the industry.[21]Whilst Mr Roberts sought to dispute the claimant’s evidence that she was required to ask his permission for many things, there is an abundance of documentary evidence in the form of text messages that supports the claimant’s position. For example her text (p108), thanking him for allowing her to go home early when she was not well and asking if ‘it would be ok with the salon if anything comes of it’ in respect of her considering entering an art event. There are also text messages from the claimant where it is clear that she seeks permission in respect of working practices for example p97, 99, 100, 102, 103, 113). Mr Roberts did accept that the claimant had to obtain his permission to take holidays and that the holiday request forms used were the ones used when she was an employee. There is also evidence of the claimant asking for holiday in the text messages provided and evidence of dissatisfaction of ‘staff’ about the change in duration of holidays imposed by the respondent. (p112). The Tribunal finds on the basis of the oral and documentary evidence before it, that post July 2017, the claimant was required to work the same hours that had previously been agreed and did not have the flexibility to decide her own hours or days of working. In addition the Tribunal further finds that the claimant remained under the control of Mr Roberts post July 2017 in the same way as she had done whilst working under a contract of employment. His permission was required not only to take holiday but also in respect of any matters relating to work including being allowed to leave work early if she did not have any clients booked in. The only aspect of the claimant’s work which was not controlled by Mr Roberts was the manner in which she exercised her skill of hairdressing, although even that was fettered to a degree by the obligation on the part of the claimant to use only the hair and styling products provided by the respondent.[22]In respect of the practical aspects of the claimant’s work the Tribunal accepts that the claimant was told how much she would have to pay for the rental of the chair (45%) For the reasons given above the Tribunal find that the claimant was not in a position to negotiate the rate she paid. The Tribunal find that the claimant’s desire to account for her own tax and national insurance and thus have more money in her pocket each month was the driving force of her decision to make the move and that there was little else she was interested in at that time. Consequently, this was the only matter she addressed her mind to until she realised that she would incur other charges as a result of her decision.[23]In respect of how the claimant got her work, the Tribunal finds that this did not change. The claimant’s regulars continued to book appointments through the salon reception using the salon’s software system. Although it is Mr Roberts’ evidence that the claimant’s regular clients would have become hers the Tribunal has not been referred to any documentary evidence that demonstrates this to be the case. Mr Roberts also gave evidence that the claimant would have been able to access their personal information on the system unlike those who were employed by the respondent, but it is clear that in order to do this she would have needed a change to her password to enable her to access anything other than the client’s hairdressing products and history. Mr Roberts accepted that he would have been responsible for making sure that the claimant was given a higher level of access and that if this had not happened, which was the claimant’s evidence, then that would have been a mistake The claimant explained that payments from all clients were taken through the respondent till and that as she was not given any additional access to the system she had to ask the receptionist to look to see how much her takings were as she was unable to access this information herself. It is clear from the Agreement that the claimant would have been expected to have access to information about her takings because she would have been required to produce this information to the respondent in order to receive payment. However, she did not do this and given that Mr Roberts was unable to show any evidence of the claimant’s enhanced access to the system following the change in the way in which she was paid, the Tribunal prefer the evidence of the claimant who has been clear and consistent in her account of her working conditions and practices. The Tribunal find on the balance of probability, the claimant’s regular clients remained just that, her regulars and there was nothing to suggest that they had become clients of the claimant instead of the respondent. If the claimant was not in work for any reason it would be the salon who would contact the client if needed, to cancel or offer an alternative stylist or appointment. Whilst the claimant may have been able to speak to clients by phone when she was in the salon to perhaps discuss their requirements she did not have access to a record of their personal information and it would be the receptionist who would deal with practicalities. The Tribunal finds that the claimant had her own regulars but they were clients of the respondent or the Salon not the claimant. She did not have access to their personal information and on Mr Black’s oral evidence it would not have been acceptable for the claimant to make appointments to see her regulars in any other venue than the Salon. Mr Roberts explained in oral evidence that if a new client wanted to book an appointment they would be booked in with whoever it was thought was best for the client. The Tribunal find that there was an expectation that the claimant would attend work on each of the days agreed during the agreed hours and that if a client was booked in to see her, or someone walked in looking for an appointment she would be expected to take the booking.[24]It is the claimant’s case that she did not have any control over the amount she charged the clients she attended upon and that it was not open to her to offer discounts on either her services or the products sold and upon which she would be paid commission. She was also not allowed to use products of her own choice or send someone else to do her work if she was unable to. She was also not permitted to work elsewhere[25]Mr Black explained that the price the claimant would be required to charge her clients would have to be within the senior stylist range of the respondent’s charges. He agreed that it would ‘of course’ not be permissible for her to undercut her colleagues or charge higher rates such as those charged by Mr Roberts as she would have to work within the parameters of the salon. It was Mr Roberts evidence that the claimant was free to offer discounts to her clients but it is clear from the text message from the receptionist to Mr Roberts that this was not the case because this text is clearly asking Mr Roberts, whether the claimant is permitted to offer a discount to entice clients in on a quiet day or whether she is to simply say she has got vacancies (p112). The Tribunal finds on the balance of probabilities that the claimant did not have any control over the amount she charged for her services as this was set by the respondent and any deviation from the same could only be applied with the permission of her ‘manager’ Mr Roberts. Mr Roberts accepted readily in oral evidence that it would not be permissible for the claimant to use alternative products on her clients as it would be ‘unorthodox’ to do so. Similarly he agreed that no one would offer discount on the products sold to clients as this would not be acceptable to the supplier.[26]The claimant also explained that although she used and continued to use the respondent’s equipment, she had, as is usual practice within the hairdressing industry, always purchased her own scissors. She had also more recently purchased a hairdryer which would also appear to be normal as it was Mr Robert’s oral evidence that they did not have spare hairdryers hanging around. Both these products were bought through the respondent via the Salon and it was not disputed that the respondent was invoiced for the same. The respondent did not invoice the claimant for the goods but simply took payment for them from the claimant. When questioned the claimant confirmed that she did not offset these purchases against her tax liability as she did not have any proof of purchase and did not know that she could. The respondent did not dispute the claimant’s evidence or offer any explanation as to why it did not provide an invoice to the claimant for the goods she purchased for her purported business through the respondent. The Tribunal find that given the respondent’s own experience of business, had the claimant been in business of her own account it would have been usual to invoice the claimant for the same as it would have been unable to offset the cost of that purchase to its own business expenses given that the respondent had not actually incurred that cost.[27]Mr Roberts agreed in oral evidence that although there was provision with the Agreement for the claimant to provide a substitute to cover her work if she was not in, in reality this had never happened with anyone and that he ‘honestly [didn’t] know how it would happen in practice’. This is consistent with the claimant’s evidence that she was not allowed to send someone else if she was unable to attend. For this reason the Tribunal find that the claimant was not permitted to send someone else in her place if she was unable to attend work and that it would have been something she would have welcomed had she been able to do it[28]In respect of further terms of the Agreement, the Tribunal note that the respondent continued to provide insurance cover for the claimant on its policy which is inconsistent with the terms the Agreement which requires the Independent Contractor to have in force a certificate of insurance at all times.[29]In addition, bearing in mind the general terms of the Agreement which would have given the claimant flexibility about the way in which she wanted to work following the opening of the Salon after lockdown, the Tribunal note that Mr Roberts would not have been a party to the Agreement and therefore would have had no authority to refuse to allow what the claimant asked. By contrast as her manager, it is likely that he would and this is what happened.[30]Whilst Mr Roberts denies asking the claimant to produce a fit note, it is clear that although the claimant knew she was self-employed for payment purposes she still felt she needed to produce both the fit note and the letter from her doctor explaining why a phased return to work was needed. It is also clear that she did this in order to obtain Mr Robert’s permission to return to work in the way her doctor proposed for a short period of time. The Tribunal find that as an independent contractor the claimant would have had control over the hours she worked and would have been able to tell Mr Roberts what she proposed to do as opposed to ask and be refused permission. The fact that this did not happen is another example of Mr Roberts exercising control over the claimant in respect of the working relationship. Submissions[31]For the respondent Mr Searle submits that, subject to the claimant not letting clients down she was free to come and go as she pleased and was also free to change her hours of work coming in late and leaving early as long as she made the respondent aware of what she was doing. In contrast to other employees she was not required to wear the uniform tea shirt or desist from wearing jeans to work. She was allowed to apply discounts to individual clients. unlike employees, and that although never exercised the claimant nonetheless had a contractual right to send someone else in her stead to carry out her work.[32]Mr Searle submits that the claimant was eager to become self-employed and asks the Tribunal to accept the respondent’s credible evidence that a ‘ new’ contract was given to her at that time. He accepts that although the respondent had provided training for the claimant this was not funded by the respondent. He submits that the claimant realised that she would earn more some months than others and was prepared to take that risk. She was he submits the author of her own destiny and stood to earn far more depending upon how hard she worked. In respect of working equipment Mr Searle accepts that the claimant continued to use the large equipment needed for some treatments but says it would be unrealistic to expect each self-employed stylist to provide their own.[33]Mr Searle referred the Tribunal to the cases of Pimlico Plumbers Ltd v Smith [2018]UKSC 29 [2018 IRLR 872; Bates Van Winklehof v Clyde & Co LLP [2014] UKSC 32 and Uber BV v Aslam [2018] IRLR 97, along with the relevant legislation on employment status. He submits that on the basis of these cases the claimant does not satisfy the definition of an employee because she had the right of substitution, was able to choose the hours she worked, accounted to HMRC for her own tax and insurance and paid 45% of her gross turnover to the respondent in return for the rental of a chair.[34]Mr Searle concedes on behalf of the respondent that the claimant was a worker working under a contract for services.[35]For the claimant Mr Marshall submits that although the claimant can be seen to be asking to become self-employed,, the reality of the situation is that after ten years of being an employee it is only after Mr Roberts has told her she could be better off by £600 per month if she became self-employed that she considers doing so. He submits that contrary to the respondent’s assertion that she was the driving force behind it, it was only when Mr Roberts dangled the carrot of more money that she began to entertain the idea.[36]Mr Marshall asks the Tribunal to find that the claimant was not given a copy of the Independent Contactors Agreement and that the reality of the situation, given the evidence presented to the Tribunal, is that the claimant remained an employee of the respondent notwithstanding the fact that she purportedly became self-employed. He submits that the claimant remained under the control of Mr Roberts and was not free to come and go as she pleased or pick and choose who she provided hairdressing services to. All appointments were booked through the salon and the claimant was given a list of appointments she was expected to undertake. She did not have access to the personal details of these clients which was only available to those with higher access to the system. He submits that there is no evidence to support the respondent’s contention that once the working arrangement changed in July 2017 the clients who had their hair done by the claimant became her clients and not clients of the respondent. On the contrary he submits that Mr Black conceded in oral evidence that in circumstances where another stylist may have seen one of the claimant’s regulars in her absence, there was nothing to stop them soliciting her regulars to book with them instead.[37]Mr Marshall reminded the Tribunal of the working arrangements of the claimant and Mr Black’s evidence of what would usually be expected of those who worked as independent contractors for the respondent. He referred the Tribunal to the inconsistent evidence of Mr Roberts who contrary to his written evidence confirmed that the claimant was required to obtain permission from him to take annual leave. In addition he reminded the Tribunal that contrary to Mr Robert’s evidence that the claimant was free to come and go as she pleased subject to not letting clients down, when she asked to vary her hours for a short time to allow her a phased return to work during her recovery from coronavirus, he refused her request.
Remedy
[38]Mr Marshall submits that there is sufficient evidence to show that the claimant was not able to negotiate the terms of the rental agreement for the chair, was required to remain at work for the hours she had been previously contracted to do and had no control over her working practices save for the way in which she practiced her skill. She was not permitted to work elsewhere or provide someone else to attend to her regulars in her absence, and there is no evidence to support the respondent’s contention that the client’s she attended upon became or were her clients. He also reminded the Tribunal that the claimant had always provided her own scissors, brushes and combs etc and that this did not change after July 2017. Neither did the position in relation to the manner in which she was required to dress at work or the provision of indemnity insurance which continued to be provided by the respondent.
The Law
[39]S.230 ERA, so far as relevant, provides:(1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.(2) In this Act "contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.(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) - (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. Reg 2(1) WTR 1998 adopts the same definition of worker as the ERA.[40]There are thus three categories of relationship, conveniently summarised in Bates van Winkelhof v Clyde & Co. LLP [2014] ICR 730 (per Baroness Hale at [24] and [25]): ‘24. First, the natural and ordinary meaning of “employed by” is employed under a contract of service. Our law draws a clear distinction between those who are so employed and those who are self-employed but enter into contracts to perform work or services for others. 25. Second, within the latter class, the law now draws a distinction between two different kinds of self-employed people. One kind are people who carry on a profession or a business undertaking on their own account and enter into contracts with clients or customers to provide work or services for them. The arbitrators in Hashwani v Jivraj (London Court of International Arbitration intervening) [2011] ICR 1004 were people of that kind. The other kind are selfemployed people who provide their services as part of a profession or business undertaking carried on by someone else. The general medical practitioner in Hospital Medical Group Ltd v Westwood [2013] ICR 415, who also provided his services as a hair restoration surgeon to a company offering hair restoration services to the public, was a person of that kind and thus a “worker” within the meaning of section 230(3)(b) of the 1996 Act.’[41]A worker who meets the definition in s.230(3)(b) ERA is now commonly referred to as a ‘limb (b) worker’ or ‘an employee under the extended definition’.[42]The definition of employee in s.230(1) ERA turns on the meaning of the phrase ‘contract of service’ in s.230(2) which, impliedly, is to be contrasted with a ‘contract for services’. The usual starting-point is the passage in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2QB 497 at 515, in which MacKenna J. said: ‘A contract of service exists if these three conditions are fulfilled.(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.(ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master.(iii) The other provisions of the contract are consistent with its being a contract of service. I need say little about (i) and (ii). As to (i). There must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind. The servant must be obliged to provide his own work and skill. Freedom to do a job either by one's own hands or by another's is inconsistent with a contract of service, though a limited or occasional power of delegation may not be: see Atiyah's Vicarious Liability in the Law of Torts (1967) pp. 59 to 61 and the cases cited by him. As to (ii). Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted.’ …….. I can put the point which I am making in other words. An obligation to do work subject to the other party's control is a necessary, though not always a sufficient, condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract, and the person doing the work will not be a servant. The judge's task is to classify the contract (a task like that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control.’[43]In respect of the need for personal performance, the Supreme Court in Pimlico Plumbers v Smith [2018] ICR 1511 endorsed the principles set out by Sir Terence Etherton MR in his judgment in the same case in the Court of Appeal ([2017] ICR 657 at [84]: ‘84. In the light of the cases and the language and objects of the relevant legislation, I would summarise as follows the applicable principles as to the requirement for personal performance. Firstly, an unfettered right to substitute another person to do the work or perform the services is inconsistent with an undertaking to do so personally. Secondly, a conditional right to substitute another person may or may not be inconsistent with personal performance depending upon the conditionality. It will depend on the precise contractual arrangements and, in particular, the nature and degree of any fetter on a right of substitution or, using different language, the extent to which the right of substitution is limited or occasional. Thirdly, by way of example, a right of substitution only when the contractor is unable to carry out the work will, subject to any exceptional facts, be consistent with personal performance. Fourthly, again by way of example, a right of substitution limited only by the need to show that the substitute is as qualified as the contractor to do the work, whether or not that entails a particular procedure, will, subject to any exceptional facts, be inconsistent with personal performance. Fifthly, again by way of example, a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent will be consistent with personal performance.’[44]No contract of employment can exist in the absence of 'mutual obligations subsisting over the entire duration of the relevant period': Clark v Oxfordshire Health Authority [1998] IRLR 125 at [22]. In Carmichael v National Power plc [1999] ICR 1226 (at 1230) Lord Irvine cited this passage with approval, in support of the proposition that, if there were no obligation on the employer to provide work, and none on the putative employee to undertake it, there would be 'an absence of that irreducible minimum of mutual obligation necessary to create a contract of service.'
Introduction
[45]In Quashie v Stringfellow Restaurants Ltd. [2013] IRLR 99 at [12] Elias LJ held: ‘In order for the contract to remain in force, it is necessary to show that there is at least what has been termed 'an irreducible minimum of obligation', either express or implied, which continues during the breaks in work engagements: see the judgment of Stephenson LJ in Nethermere (St Neots) v Gardiner [1984] IRLR 240, 245, approved by Lord Irvine of Lairg in Carmichael v National Power plc [2000] IRLR 43, 45. Where this occurs, these contracts are often referred to as 'global' or 'umbrella' contracts because they are overarching contracts punctuated by periods of work. However, whilst the fact that there is no umbrella contract does not preclude the worker being employed under a contract of employment when actually carrying out an engagement, the fact that a worker only works casually and intermittently for an employer may, depending on the facts, justify an inference that when he or she does work it is to provide services as an independent contractor rather than as an employee[46]A mere expectation that an individual will undertake a certain amount of work is not the same as an obligation to do so. In Hafal Ltd v Lane-Angell, UKEAT/0107/17 Choudhury P. held at [29] that: ‘The Tribunal's findings indicate that the Claimant was expected to provide dates of availability to the Respondent. The Claimant would then be placed on the rota. There was an expectation that the Claimant would be able to provide work should she be contacted whilst on the rota. However, there is no finding that the Claimant was obliged to provide any or any minimum number of dates of availability, certainly not for the period before 1 May 2015. It is a trite observation that an expectation that the Claimant would provide work is not the same as an obligation to do so. I recognise that there may be cases where, as a result of a commercial imperative or market forces, the practice is that work is usually offered and usually accepted and that such commercial imperatives or forces may crystallise over time into legal obligations. That was the case in Haggerty. However, in that case, there were no express terms negating such obligations. I consider that to be a significant distinguishing feature. On the facts, this case is closer to the situation in Stevedoring and Carmichael than that in Haggerty.’[47]If there is sufficient mutuality of obligation that the contract might be one of employment/service, the next question which falls to be determined is control. Although not the sole means of identifying a contract of employment, control remains an essential element of the test. The question is not whether the employer controls the way the putative employee does the work, rather whether the employer can, under the terms of the contract, direct him/her in what s/he did (Wright v Aegis Defence Services (BVI) Ltd, UKEAT/0173/17/DM at [35]). That is distinct from showing that the employer controls the way that the employee does the work. Even an absence of day to day control may not be relevant, if the employer retains the ultimate contractual power to direct what work should be done (White v Troutbeck SA [2013] IRLR 949, CA).[48]As for the third element of the test in Ready-Mixed Concrete, there is no definitive list of the features of any agreement which point towards, or away from, its being a contract of employment. In Hall (Inspector of Taxes) v Lorimer [1994] ICR 218, the Court of Appeal upheld Mummery J, who in the High Court ([1992] ICR 739) held that it was necessary to consider many different aspects of the person's work activity, and that this was not to be done by way of a mechanical exercise of running through items on a check list to see whether they were present in, or absent from, a given situation. Not all details are of equal weight or importance in any given situation.[49]As to the requirement for personal performance, the principles referred to in the summary of Sir Terence Etherton MR in Pimlico Plumbers v Smith (above at para 168) apply equally to worker status.[50]The individual will not be a limb (b) worker if the status of the party for whom s/he works is ‘that of a client or customer of any profession or business undertaking carried on by the individual’. In Bates van Winkelhof, at [34] onwards, Baroness Hale summarised a number of the authorities which have considered that provision:[51]In Cotswold Developments Construction Ltd v Williams [2006] IRLR 181, para[53]Langstaff J suggested: “a focus on whether the purported worker actively markets his services as an independent person to the world in general (a person who will thus have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principal's operations, will in most cases demonstrate on which side of the line a given person falls.”35. In James v Redcats (Brands) Ltd [2007] ICR 1006, para 50 Elias J agreed that this would “often assist in providing the answer” but the difficult cases were those where the putative worker did not market her services at all. He also accepted, at para 48: “in a general sense the degree of dependence is in large part what one is seeking to identify—if employees are integrated into the business, workers may be described as semi-detached and those conducting a business undertaking as detached—but that must be assessed by a careful analysis of the contract itself. The fact that the individual may be in a subordinate position, both economically and substantively, is of itself of little assistance in defining the relevant boundary because a small business operation may be as economically dependent on the other contracting party, as is the self-employed worker, particularly if it is a key or the only customer.”36. After looking at how the distinction had been introduced into the sex discrimination legislation, which contained a similarly wide definition of worker but without the reference to clients and customers, by reference to a “dominant purpose” test in Mirror Group Newspapers Ltd v Gunning [1986] ICR 145, he concluded, at para 59: “the dominant purpose test is really an attempt to identify the essential nature of the contract. Is it in essence to be located in the field of dependent work relationships, or is it in essence a contract between two independent business undertakings? ... Its purpose is to distinguish between the concept of worker and the independent contractor who is in business in his own account, even if only in a small way.”37. The issue came before the Court of Appeal in Hospital Medical Group Ltd v Westwood [2013] ICR 415, a case which was understandably not referred to in the Court of Appeal in this case; it was argued shortly before the hearing in this case, but judgment was delivered a few days afterwards. Hospital Medical Group Ltd (“HMG”) argued that Dr Westwood was in business on his own account as a doctor, in which he had three customers: the NHS for his services as a general practitioner, the Albany Clinic for whom he did transgender work, and HMG for whom he performed hair restoration surgery. The Court of Appeal considered that these were three separate businesses, quite unrelated to one another, and that he was a class (b) worker in relation to HMG.38. Maurice Kay LJ pointed out, at para 18, that neither the Cotswold “integration” test nor the Redcats “dominant purpose” test purported to lay down a test of general application. In his view they were wise “to eschew a more prescriptive approach which would gloss the words of the statute”. Judge Peter Clark in the appeal tribunal had taken the view that Dr Westwood was a limb (b) worker because he had agreed to provide his services as a hair restoration surgeon exclusively to HMG, he did not offer that service to the world in general, and he was recruited by HMG to work as an integral part of its operations. That was the right approach. The fact that Dr Westwood was in business on his own account was not conclusive because the definition also required that the other party to the contract was not his client or customer and HMG was neither. Maurice Kay LJ concluded, at para 19, by declining the suggestion that the court might give some guidance as to a more uniform approach: “I do not consider that there is a single key with which to unlock the words of the statute in every case. On the other hand, I agree with Langstaff J that his ‘integration’ test will often be appropriate as it is here.” For what it is worth, the Supreme Court refused permission to appeal in that case: [2013] ICR 415, 427. 39. I agree with Maurice Kay LJ that there is not “a single key to unlock the words of the statute in every case”. There can be no substitute for applying the words of the statute to the facts of the individual case. There will be cases where that is not easy to do. But in my view they are not solved by adding some mystery ingredient of “subordination” to the concept of employee and worker. The experienced employment judges who have considered this problem have all recognised that there is no magic test other than the words of the statute themselves. As Elias J recognised in the Redcats case [2007] ICR 1006, a small business may be genuinely an independent business but be completely dependent on and subordinate to the demands of a key customer (the position of those small factories making goods exclusively for the “St Michael” brand in the past comes to mind). Equally, as Maurice Kay LJ recognised in Westwood's case [2013] ICR 415, one may be a professional person with a high degree of autonomy as to how the work is performed and more than one string to one's bow, and still be so closely integrated into the other party's operation as to fall within the definition. As the case of the controlling shareholder in a company who is also employed as chief executive shows, one can effectively be one's own boss and still be a “worker”. While subordination may sometimes be an aid to distinguishing workers from other selfemployed people, it is not a freestanding and universal characteristic of being a worker.’ 52. Whether the terms of the contract reflect the true agreement was considered in Consistent Group Ltd v Kalwak [2007] IRLR 560, and cited with approval by Lord Clarke JSC in Autoclenz v Belcher [2011] ICR 1157 in the Supreme Court, Elias J. said this: ‘57. The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work, in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship. Peter Gibson LJ was alive to the problem. He said this (p 697 g ) ‘Of course, it is important that the industrial tribunal should be alert in this area of the law to look at the reality of any obligations. If the obligation is a sham it will want to say so.’[58]In other words, if the reality of the situation is that no one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless. 59. ... Tribunals should take a sensible and robust view of these matters in order to prevent form undermining substance ...’53. In Uber BV v Aslam [2019] ICR 845, the majority of the Court of Appeal held (at para 66): ‘The effect of Autoclenz Ltd v Belcher [2011] ICR 1157 in our view is that, in determining for the purposes of section 230 of the ERA 1996 what is the true nature of the relationship between the employer and the individual who alleges he is a worker or an employee, the court may disregard the terms of any documents generated by the employer which do not reflect the reality of what is occurring on the ground. and at para 73: [...] ‘The parties’ actual agreement must be determined by examining all the circumstances, of which the written agreement is only a part. This is particularly so where the issue is the insertion of clauses which are subsequently relied on by the inserting party to avoid statutory protection which would otherwise apply. In deciding whether someone comes within either limb of section 230(3) of the ERA 1996 , the fact that he or she signed a document will be relevant evidence, but it is not conclusive where the terms are standard and non- negotiable and where the parties are in an unequal bargaining position. Tribunals should take a “realistic and worldly-wise”, “sensible and robust” approach to the determination of what the true position is.’ Secondary findings of Fact and Application of Law54. The only issue to be determined by this Tribunal is the employment status of the claimant. It is the claimant’s case that although once she had been told by Mr Roberts of the financial benefit of becoming self-employed she asked to do so, nothing else about her working relationship changed once that took effect from July 2017. It is her case that the true relationship was not that she started in business of her own account but that she remained an employee, notwithstanding her part in changing the way in which she received payment for her work. In submissions Mr Searle on behalf of the respondent has conceded that the claimant was a ‘limb b’ worker for the purposes of s230 ERA 1996 but disputes that she was an employee. Mr Marshall submits that the claimant was an employee.55. The matter of determining the employment status of the claimant is not a tick box exercise or indeed one where more ticks on one side of the argument will result in success for the claimant, as not all ticks carry the same weight in determining employment status; the case law that has developed over time is clear in its direction that Tribunals are required to look at all the circumstances surrounding the relationship, including the documentary evidence and what the actual working circumstances were in any given case.56. For the reasons set out in the findings of fact above the Tribunal found that the claimant had not been made aware of the contents of the Agreement however in applying the facts of this matter to the law, the Tribunal may refer to the imputed intention of the terms of the same by way of example, where appropriate, in reaching determination on certain aspects of the claimant’s employment status.57. It is true that the claimant agreed to become ‘self -employed’ and that she actively pursued this change. However, the manner in which someone is paid may not reflect the true agreement between the parties. Whilst the claimant gave up her right to holiday and sick pay in return for the right to become self - employed, and she also gave up her right to be a member of the respondent pension scheme, it is clear for the reasons set out in the findings of fact above that her incentive for taking this course of action was her understanding that she would be better off by approximately £600 per month if her payments did not go through PAYE. 58. It is quite clear from the evidence that the claimant was not in the business of building up a client base so that she could delegate appointments to others. It was she personally who saw her regular clients and any others who had been booked in for appointments with her by the Salon. Although the Agreement provided for the claimant to provide a substitute, it is clear that even if the claimant had agreed to the terms of that Agreement she would have not been allowed to substitute with anyone other than someone approved entirely at the discretion of the Salon owner. In addition Mr Roberts was quite clear in his oral evidence that he had never had experience of anyone sending someone in their stead to carry out the work and. that he didn’t know how it would happen in practice. It is quite clear therefore that the reality of the situation, was that there was no right of substitution and nor would there have been any real right even if the claimant had entered into the Agreement before the Tribunal. There is no doubt, nor is it disputed that the claimant was required to provide a personal service.[59]In respect of whether there was any mutuality of obligation between the parties, Carmicheal v National Power plc [1999] ICR 1226, established that a contract of employment cannot exist in the absence of mutual obligations subsisting over the duration of the relevant period. If there is no obligation on the employer to provide work and none on the putative employee to undertake it, there would be ‘an absence of the irreducible minimum of mutual obligation necessary to create a contract of service’. It is quite clear from the evidence that the claimant was expected to attend work on the days and during the hours that she had previously been contracted to work. Whilst there may be evidence of some occasions when hours might have been varied these were always only with the permission of Mr Roberts, evidence of these requests having been produced to the Tribunal. The claimant was required to attend work on her agreed days irrespective of whether she had clients booked in or not and there was also an expectation that she would accept all appointments booked in on those days by the respondent irrespective of whether they were her regular clients or not. She was also expected to take any walk-in clients or clients that might want appointments if their regular hairdresser was not available for any reason. Whilst walk in clients may well have been few and far between, although there was no supporting evidence that this was the case, the claimant would non the less have been expected to take any appointments or opportunity of appointments made available to her however they arose. By the same token there was an expectation of the part of the claimant that the receptionist would book in new clients for her in the same way as they would be booked in for all other staff. That she was expected to attend work in the manner prescribed by the respondent is perhaps most telling when she asked for a phased return to work following lockdown. It was clear on this occasion that there was no equality of bargaining power or flexibility in the hours in which the respondent would allow the claimant to work and her request was refused. It is clear from the facts of this case as set out above that there was a mutuality of obligations between the parties to provide and undertake work.[60]The Tribunal has also considered the control exercised over the claimant Control is an important but not determinative element of the test for determining whether or not the claimant is an employee of the respondent. The question in respect of control is whether the employer can direct her in what she did. That is distinct from showing that the employer controls the way in which the employee does the work. This will be the case even where there is an absence of day to day control by the employer if they retain the ultimate contractual power to direct what work should be done (White v Troutbeck SA [2013] IRLR 949 CA).[61]For the reasons set out in the findings of fact the Tribunal is in no doubt that the respondent controlled the claimant in what she did. In reality following her transition to self-employment in July 2019 nothing changed save for the way in which she received her money and the fact that she now had to pay a defined percentage of the money she earned to the respondent, for the rental of her chair. The claimant was still required to attend work on her designated days and stay there for her designated hours even if she had no clients booked in. If she did leave early this was only with the permission of Mr Roberts, as is evidenced by the text thanking him for allowing her to go home when she was unwell. She was also required to be contactable if she left the Salon during the day to go to the shops or for lunch, so that she would be available in the event that a walk-in client attended the Salon or someone rang for a late appointment. She was required to comply with the respondent dress code and help other colleagues with cleaning and tidying the premises and helping out on reception. If she wanted to take annual leave she had to make a written application on the forms provided to all staff by the respondent and, she had to wait for approval from Mr Roberts before committing to any bookings. The fact that she never had a holiday request refused was no different to the position pre-July 2017. There is also evidence that the respondent provided training for the claimant both on and off the premises (p100 & 109), and that she was required to work an extra day per week to make up for her training attendance at the external course. On the basis of the evidence before it and for the reasons given above, the Tribunal is satisfied that save for the manner in which the claimant cut and styled a client’s hair, the respondent had full control over the hours she worked and directed her in what she did in the same manner it did prior to July 2017 when she was an employee of the respondent.[62]Finally before reaching a determination on the employment status of the claimant, the Tribunal has considered if, and to what extent the claimant may have been in business of her own account. The Tribunal has considered this aspect despite the claimant’s requirement to provide a personal service with no right of substation, the mutuality of obligation that the Tribunal has found between the parties and the level of control exercised over the claimant by the respondent.[63]The claimant’s oral evidence was not disputed that post July 2017 she was still required to comply with the respondent dress code at work, in that staff were not allowed to wear jeans and should wear black in order to give a consistent look. Nor was the fact that she had always both pre and post July 2017, provided her own scissors and brushes etc and more latterly her own hairdryer. Some of these products had been purchased through the respondent, as had always been the practice, and she had accounted for the money for them directly to the respondent without being provided with any proof of her purchases to use to offset the costs as expenses in her annual self-assessment tax return. She also continued to use the large equipment provided by the respondent as she had always done and was required to use only the hairdressing products used by the Salon. She was told of her charge out rate and was not permitted to apply discounts to clients without the permission of Mr Roberts, which is evidenced in text messages before the Tribunal. She was required to attend work during the hours that had been agreed pre-July 2017, and was still required to assist others and cover reception on occasions when she was not seeing a client. To all intents and purposes she was an integral part of the Salon and there was nothing that would have differentiated her from any other members of staff either to her own regular clients or those of other members of staff.[64]Contrary to the respondent’s evidence the claimant’s regular clients did not become hers post July 2017. Post July 2017 clients continued to book appointments through the respondent reception and were entered on the respondent software. Unlike the respondent’s other self-employed stylists, the claimant was not given enhanced access to the personal details of her regular clients. Payments from all clients were taken through the respondent till and the claimant was not given enhanced access to details of the monies taken through the till that related to her ‘clients’. In order to find out how much money had been taken she had to ask the receptionists to access the information for her. She could not therefore, as would have been required under the terms of the Agreement, provide these details to the respondent, on the contrary it was the respondent who told her how much money she was entitled to. The respondent also continued to provide insurance cover for the claimant, whereas under the terms of the Agreement she would have been required to provide her own cover.[65]Whilst there was a small degree of financial risk to the claimant if she lost her regular clients and was unable to build up more, the reality of the situation was that the claimant, through ceasing to be paid subject to PAYE, was led to believe by Mr Roberts that she would be in a better financial position and there is no evidence that the risk of anything other was discussed with her. She was not required to buy into the respondent and continued to attend the Salon for work and use all the same products and equipment as she had previously without any additional charge other than the agreed rental. It has not been suggested that the claimant was required to pay a minimal or nominal amount each month to the respondent in the event that her earnings did not reach a certain figure or she earned no money at all. The cost of the rental was predicated on takings from clients attending the Salon and if there were no takings attributed to the claimant no monies would be payable by her. In the circumstances it cannot be said that the claimant took any real financial risk in changing the manner in which she was paid. Nor can it be said that post July 2017 she started in business of her own account with her own clients. This is further supported by Mr Black’s oral evidence that it would not have been acceptable for the claimant to see her regular clients in any other salon other than one within the respondent.[66]Having had regard to all the evidence in the round, it is clear that although agreement was reached for the claimant to receive payment for her work on a self-employed basis and that as a result of that agreement she paid a percentage of the takings generated from the clients she saw as a payment for rental of a chair to work from in the salon, the reality of the situation was that nothing else about the working relationship changed at all. The claimant was not in business of her own account either as an independent contractor or a limb (b) worker. She had no control over the hours or manner in which she worked needing permission to vary any part of her working agreement including needing permission to leave early or take annual leave. She was unable to negotiate the rate at which clients were charged or to offer discounts without the permission of Mr Roberts. If any client, whether known to her or not, was booked in for an appointment with her during the days on which she was expected to attend she was required to take that appointment and similarly she would expect new client appointments to be booked in with her in the same way as they would be for all other staff.[67]The Tribunal acknowledges that the practice of chair rentals by hairdressers is a common and accepted practice. Had the terms of the Agreement been properly concluded, and performed it may well have resulted in a contract with the claimant as an independent contractor. However, the true working practice that existed in these particular circumstances bears no resemblance to the terms set out in that Agreement or one that would find the claimant to be a limb (b) worker for the purposes of s230(3)(b) ERA 1996. The Tribunal is satisfied that the claimant is able to satisfy the definition of employee under s230 ERA 1996.[68]In conclusion, the claimant was an employee of the respondent under s230 (1) ERA.[1]The claimant presented a claim to the Tribunal on 12 August 2020 following a period of early conciliation from 7 August 2020 to 1 July 2020. She brought complaints of unfair dismissal, disability discrimination, sex discrimination, breach of contract, holiday pay, unpaid wages and other payments. The claim was initially brought against the Razors Edge Group Limited (first respondent),[2]The respondents resisted the claim, and a preliminary hearing was listed to determine the question of the claimant’s employment status. This was heard by Employment Judge (‘EJ’) Sharkett on 13 May 2021, and it was determined that the claimant was an employee.[3]A further preliminary hearing took place before Employment Judge Batten on 13 May 2021, and she dealt with matters of case management, including the addition of Mr Roberts (Manchester) Limited (second respondent). A final hearing was listed for 21 to 25 November 2021. It was also decided to list the case for a preliminary hearing to deal with preliminary issues.[4]Employment Judge Johnson sitting alone heard the further preliminary issues on 8 November 2021 and found that the claimant was disabled within the meaning of section 6 Equality Act 2010 and also that her employment terminated with the first respondent before its business was transferred to the second respondent. The question of whether the claimant’s resignation was prompted by the transfer from the first to the second respondent and any application of TUPE as a result, was a matter to be determined at the final hearing.[5]Further case management orders were also made in order that the case would be ready for the final hearing. The Issues[6]These were prepared by the respondent in accordance with EJ Johnson’s case management order made following PH on 8 November 2021 and they were agreed at beginning of final hearing on day 2. They are as follows, (see below). Part-time Workers (Prevention of Less Favourable Treatment Regulations 2000[7]The ET is referred to: a) para 20(c) of the Particulars of Claim (p28); and, b) para 10 the Particulars of Claim (p22)[8]On the basis of those elements of the Particulars of Claim, the first respondent would summarise the alleged less favourable treatment pursued by the claimant as: a) The claimant alleges that, in June 2018, she was not permitted to attend a course. b) The claimant alleges that, during the Christmas 2018 period, she was required to attend work for extra days/hours unpaid. c) The claimant alleges that, for the period from May 2019 onwards (up until lockdown in March 2020), she was required to attend work for an extra day each week unpaid. d) The claimant alleges that, on 25 October 2019, she was ridiculed by Mr James Roberts.[9]The issues for determination will be: a) Who is the allegedly comparable full-time worker? The claimant has indicated that she relies on JP and DS. b) Are those persons comparable full-time workers for the purposes of the Parttime Workers Regulations? c) In respect of each of the above items of alleged less favourable treatment: i) Did the alleged matter occur? ii) Did it constitute an act, or deliberate failure, of the first respondent? iii) Was the claimant thereby subjected to detriment? iv) Was the claimant thereby treated less favourably than the comparable full-time worker? v) Was the less favourable treatment done on the grounds that claimant was a part-time worker? vi) Was the treatment justified on objective grounds? vii) Was the claim presented in time? If not, should time be extended? Direct discrimination (s.13 Equality Act 2010)[10]The claim is pleaded in the ET1 at para 20(d) of the Particulars of Claim (p28).[11]This claim appears to be pursued based on the same alleged less favourable treatment covered above (in paragraph 8 under the Part-time Workers Regulations claim).[12]As such, the alleged less favourable treatment appears again to be: a) The claimant alleges that, in June 2018, she was not permitted to attend a course. b) The claimant alleges that, during the Christmas 2018 period, she was required to attend work for extra days/hours unpaid. c) The claimant alleges that, for the period from May 2019 onwards (up until lockdown in March 2020), she was required to attend work for an extra day each week unpaid. d) The claimant alleges that, on 25 October 2019, she was ridiculed by Mr James Roberts.[13]The issues for determination will be: a) Who is the comparator (actual or hypothetical)? C has indicated that she relies on JP and DS. b) Is that person an appropriate comparator? c) In respect of each of the above items of alleged less favourable treatment: i) Did the alleged matter occur? ii) Was it done by the first respondent? iii) Was the claimant thereby subjected to detriment by first respondent? iv) Was the claimant thereby treated less favourably than her comparator? v) Was it done because of sex? vi) Was the claim presented in time? If not, should time be extended? Indirect sex discrimination[14]The claimant has provided further and better particulars on this claim (see p98 of the bundle)[15]The alleged PCP set out by the claimant is: a) “The respondent’s practice required the claimant to attend the salon for an additional working date every week for a period of 12 months over and above the claimant’s previously agreed working hours.”[16]The alleged disadvantage set out by the claimant is: a) “as a woman she had primary responsibility for the care of her two children (age 10 and six at the relevant time) and consequently have to pay for additional childcare on the extra days that she was required to attend the salon, thereby putting her at a financial disadvantage when compared to her male colleagues”[17]The issues for determination are: a) Did the first respondent (or the second respondent) have the alleged PCP? b) What is/are the correct pool/s for comparison? c) Did the first respondent (or second respondent) apply it, or would the first respondent (or second respondent) apply it, to men in the relevant pool? d) Did it, or would it, put women in the relevant pool at a particular disadvantage when compared with men in the relevant pool? e) Did it put claimant at that particular disadvantage? f) Can Did the first respondent (or second respondent) show it to be a proportionate means of achieving a legitimate aim? g) Was the claim presented in time? If not, should time be extended? Alleged failure to make reasonable adjustments[18]The claimant has provided further and better particulars on this claim (see p99 of the bundle).[19]The alleged PCP, as set out in the FBPs, is: a) “the respondents practise required the claimant to comply with their instructions that she attend the salon on four days per week following the lifting of the first lockdown restrictions”[20]The alleged substantial disadvantage is: a) “this was contrary to the claimants doctors advice that the claimant was unfit to do so and should return only return to work on two days per week”[21]The alleged reasonable step relied on by the claimant is: a) “to allow her to return to work on two days per wee[22]The issues for determination by the ET are: a) Did the first respondent (or second respondent) have knowledge, or ought the relevant respondent to have had knowledge, of the claimant’s disability at the relevant time? b) Did first respondent (or second respondent) have the alleged PCP at all? c) Did the PCP put the claimant at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled? The alleged substantial disadvantage on which the claimant relies is set out above. d) Did first respondent (or the second respondent) have knowledge of that substantial disadvantage? e) Did the first respondent (or the second respondent) take such steps as it is reasonable to have to take to avoid the disadvantage? f) Was the claim presented time? If not, should time be extended? Unfair dismissal[23]The claim is pleaded in the Particulars of Claim at para 20(b) (p28 of the bundle).[24]The alleged conduct on which the claimant relies is a) “the continual bad treatment received by her over a 24 month period”. b) “her manager….. acting completely unreasonably in rejecting the recommendations from the claimant’s doctor for a controlled and safe return to her work after being treated for contracting COVID-19 during the furlough period and suffering medical and psychological after effects that needed careful monitoring”.[25]The issues for determination are: a) Did the first respondent (or second respondent) act as alleged above? b) Did that constitute a repudiatory breach of contract by the first respondent? c) Did the claimant resign in response to any of the alleged conduct by the first respondent found to have been a repudiatory breach by the first respondent? d) Did the claimant affirm the contract and/or waive the breach before resigning? e) Was the dismissal fair? Notice pay/wrongful dismissal[26]The issues mirror those in the unfair dismissal claim, other than that referring to fairness.[27]An additional significant issue (arguably as to liability) is whether the claimant has in fact suffered any damages, bearing in mind her new role. Accrued holiday pay on termination[28]The claimant has presented some calculations in respect of this claim (at p15 of the bundle), in the Particulars of Claim.[29]The first respondent asked the claimant to explain the basis of this claim in more detail, including the basis of the calculations thereby set out. No further information has been forthcoming, however. “Arrears of pay”[30]The claimant has ticked this box (in section 8.1) on p9 of the ET1.[31]The first respondent asked the claimant to spell out what the claim is for, if it is not covered above.[32]No information has been forthcoming. The first respondent assumes there is no further claim being pursued. “Other payments”[33]The claimant has ticked this box on p9 of the ET1.[34]The first respondent asked the claimant to spell out what the claim is for, if it is not covered above.[35]No information has been forthcoming. The first respondent assumes there is no further claim being pursued. Transfer of any liability (in accordance with the Transfer of Undertakings (Protection of Employment) Regulations 2006)[36]If any claims are upheld against the first respondent, an issue arises as to whether that liability passed to the second respondent.[37]The issues for determination are as follows: a) Was there a constructive dismissal? [This point is addressed in any event in respect of the unfair dismissal claim above] b) If there was a constructive dismissal, what was the conduct in repudiatory breach? [The ET will be considering this point in any event in respect of the unfair dismissal claim] c) Was the reason for that conduct the transfer itself or a reason connected with the transfer that was not an ETO reason entailing changes in the workforce? d) If so, any liability arising in respect of any of the claimant’s claims passed as a matter of law from first respondent to the second respondent (by virtue of regulations 4(1)-(3) TUPE 2006). Remedy To be confirmed, (if relevant) Evidence Used[39]The claimant gave witness evidence during days 2 and 3 of the hearing.[40]The first respondent called the following witnesses who gave evidence on days 4 and 5: a) Amy Cross (assistant manager in the first respondent’s salon until her transfer to the second respondent on 6 July 2020); b) Tony Heffernan (former owner of the first respondent’s business and from 25 December 2010 a general manager until 24 May 2022); c) Stewart Black (owner/director of the first respondent)[41]The second respondent did not attend with representation and no witnesses were called. Mr James Roberts was conspicuous by his absence and his failure to attend to give witness evidence was surprising as he had managed the claimant while working for the first respondent and was the owner of the second respondent business. Whatever his reasons for non-attendance, there were occasions where his absence effectively meant that the claimant’s evidence was unchallenged by the first respondent’s witnesses. As the Tribunal found the claimant to be largely credible in how she gave her witness evidence (and willing to concede where her memory was not reliable on a matter), there were occasions where her evidence could be accepted in the absence of any rebuttal evidence from witnesses or within the documents that the Tribunal was taken to.[42]The hearing bundle was produced in pdf form and consisted of some 407 pages. This included the claim form and response, further particulars and earlier preliminary judgments and case management orders. It also enclosed contractual information relating to the claimant, email/SMS/WhatsApp correspondence for a variety of dates, GP letters, rotas and the transfer agreement between the first and second respondents.[43]During the hearing, it became clear that there had been diary sheets showing the dates when employees were working and how each working day was occupied. They had been available at the preliminary hearing before EJ Sharkett and added to the hearing bundle on day 3, so they could be used in the cross examination of all of the witnesses. Unfortunately, the reproductive quality of these documents was poor, and it was difficult to magnify them while retaining their clarity. It was possible to work out the contents of most pages with a bit of discussion as each witness was taken to relevant pages. However, while we found them to be of some use during the hearing, it was difficult to revisit them clearly during our discussions in chambers. Nonetheless, we felt that they did not play an integral role in our deliberation, although the answers given by witnesses in relation to these documents was recorded and used where appropriate from the Tribunal panel’s notes. Accordingly, it was possible to reach a decision without returning to the parties for further assistance.[44]The hearing took place remotely using the Tribunal’s Cloud Video Platform (‘CVP’) and as the hearing of witness evidence was not concluded until late on day 5, the Tribunal was willing to sit slightly later than usual to enable both parties to give appropriate oral submissions and thereby avoiding a need for written submissions to be provided at a later date. Findings of Fact
Introduction
[45]The first respondent company (‘Razors Edge’) is owned by Stewart Black and he is a director of the company. It previously owned 4 hair salons in Manchester City Centre and 3 of these traded as Razors Edge and one traded as James Roberts Limited. The 3 Razors Edge salons were franchised from 2006 with each salon being run by a separate owner and Mr Black retaining the ownership of James Roberts.[46]Two of the three franchised salons were then brought back into Mr Black’s ownership in 2010 and the remaining franchised business left the group and then operated independently from the franchise. Tony Heffernan had owned the franchise of the Royal Exchange branch and resigned as a director when the business was insourced back to the first respondent in 2010. He then became the general manager of Razors Edge until his resignation on 24 May 2022.[47]It is understood that the claimant (Mrs Matthews), started working for Razors Edge Royal Exchange from 7 August 2007 as a hair stylist. She transferred to the first respondent as an employee in accordance with the provisions of TUPE in 2010. She subsequently moved to the James Roberts salon which appeared to take place during July 2017. This salon continued to be owned by the first respondent until its transfer of ownership to the second respondent on 6 July 2020. Once Mrs Matthews started working at this new salon, her line manager became James Roberts who at this stage was an employee of the first respondent.[48]Mrs Matthews appeared to have an uneventful working relationship with the first respondent until 2018, when issues arose relating to her employment status and then from March 2020 when the Covid pandemic reached the UK and lockdown began.[49]It is no longer necessary to consider Mrs Matthews’ employment status as the decision of Employment Judge Sharkett following the preliminary hearing on 10 May 2021 found that she remained an employee and was not selfemployed. However, the factual basis behind the allegations made in relation to each of the complaints referred to in the Issues section above need discussing further and each one is now dealt with in turn. Treatment as a part time worker[50]Mrs Matthews alleges that she was not permitted to attend a course by the first respondent prior to lockdown in 2020. It was noted from the agreed list of issues above, suggested this took place in June 2018. However, during the hearing it became clear that there was some uncertainty on the part of Mrs Matthews as to what this allegation related to and upon reflection, she conceded that it involved a matter which arose on a slightly earlier date.[51]On balance, having considered the witness evidence of Mrs Matthews (and in the absence of Mr Roberts or indeed other respondent witnesses being able to give contrary evidence), we find that her concession that it related to a course taking place in the summer of 2017 and that the subject matter was bleach/colour course. We also accept that her request of the first respondent for her to attend this course was refused, but insufficient evidence was given as to the reason for this refusal. It appeared to be accepted by Mr Black and Mr Heffernan however, that the first respondent did have a training budget and that suppliers of hair products such as L’Oreal (and which is considered in more detail below), provided training of a value based upon the custom hair salons gave them. In any event, Mrs Matthews accepted that she did not raise any grievance or complaint and the first time this matter was raised, was within the claim form presented in these proceedings, some 3 years later.[52]Mrs Matthews said that during the Christmas 2018 period she was required to work extra days and hours on an unpaid basis. She accepted that on 3 December 2018, the first respondent’s attendance sheet (p276 of the bundle) correctly recorded her standard working pattern of 3 days on Tuesday, Friday and Saturday. These work rotas included in the bundle (pp276 to 280) were not the subject of any challenge by Mrs Matthews and on the whole, accurately reflected the staff working patterns during December 2018.[53]The Christmas period was inevitably a busy time for hairdressers and there was typically an increased demand from customers. During the weeks commencing 10 and 17 December 2018, Mrs Matthews worked an additional day on Thursdays, albeit with an earlier finish time than her colleagues of 6pm rather than 8pm. During the week commencing 24 December 2018 (p.279), the salon was closed for Christmas from Monday 24 December to Thursday 27 December 2018. Mrs Matthews worked on Friday 28 December as usual but was absent through sickness on Saturday 29 December 2018.[54]Mrs Matthews argued that she didn’t need to come into work during this period because she did not have many (or any) customers from whom she would earn money and as her mother had taken ill, she was struggling with childcare. We accept her evidence that this was the case and that it is also consistent with EJ Sharkett’s decision at paragraph 66 of her judgment on the preliminary issue of employment status, that she was effectively being expected to work as an employee with management deciding when she should be available to work. It was certainly not the case that she could decide when she felt she should come into work.[55]Mrs Matthew’s underlying issues concerning the expectation that she works between Christmas and New Year gave rise to an argument between her and Mr Roberts on 28 December 2018. Although it was not clear as to precisely when this took place, (we only heard evidence from Mrs Matthews and Mr Roberts did not of course give evidence), we accept that a heated discussion took place between them and he stormed out of the room where the meeting was taking place, slamming the door as he left. She was then ill on the next day, (29 December 2018) and did not attend work. It was at this point she called her former manager Mr Heffernan who agreed to act as a mediator between Roberts and her with this meeting taking place on 4 January 2019.[56]In terms of whether Mrs Matthews was asked to work for extra days unpaid during Christmas 2018, we find that she was expected by the first respondent to work her normal hours as normal. The issue here was she did not have any clients booked in on those days and her domestic situation meant that she really needed to be at home because her mother was ill, and childcare was problematic. Because there was a mutual belief at the time that she was self-employed, she did not get paid for simply coming into work but had to have customers in the diary or the likely prospect of walk-in customers to make it worth her while coming into work.[57]While both parties believed she was self-employed, the first respondent expected to control her hours of work and require her to attend the salon. It was not the case that she was expected to work extra days or hours on an unpaid basis, but a consequence of being expected to work her normal hours when her customer base was reduced and thereby diminishing her earning capacity. But ultimately, this was not a case of Mrs Matthews being instructed to come into work on one of her usual non-working days, but not being allowed to take a day off on a usual working day.[58]It should also be noted that although the rota for the week commencing 24 December 2018 suggested that Mrs Matthews may have been expected to work Sunday 30 December 2018. Mrs Matthews did not suggest during her evidence she was compelled to work on that day, and we did not hear any other evidence which persuaded the Tribunal that this entry was anything other than an error as it fell outside her normal working pattern.[59]Mrs Matthews alleged that from May 2019 until lockdown in March 2020, she was required to attend work for an extra day each week unpaid. The additional working day arose from an agreement with Mr Roberts on behalf of Razors Edge that Mrs Matthews could undertake a L’Oreal colour course which began on 28 January 2019 and which continued every Monday (usually) until a date in or around April 2019. Although Mrs Matthews appeared to have been given the impression that this course was a cost to first respondent, Mr Heffernan’s gave credible evidence that the course was provided by L’Oreal who allocated a training budget to its salon customers based upon the value of the products they ordered from L’Oreal. Mr Black accepted the course came out of a budget and did not dispute that this was provided by L’Oreal. He argued however, that by offering this course to Mrs Matthews, she would be able to increase her earning potential by becoming more skilled in the use of hair colouring and thereby provide more expensive colouring treatments. The Tribunal found that this course was not a cost as such to Razors Edge and accepted that potentially Mrs Matthews could increase her earnings by offering these additional skills.[60]The issue behind this matter, however, was that Mrs Matthews felt that the offer of the L’Oreal course was contingent upon her committing to working 4 rather than 3 days once she had completed it in April 2019. The reasons behind this were not clearly expressed during the hearing, but we accept that from 3 June 2019, the rota (p295) demonstrated that Mrs Matthews worked Tuesday, Thursday, Friday and Saturday and that continued working pattern until 16 March 2020 which was the final rota in the bundle before lockdown began as a result of Covid, (p.322).[61]There were some weeks where she was away on holiday or days when she was ill, but a working pattern of 4 days began in June 2019 and continued until March 2020. On balance, we accept that there was an expectation that she would increase her work from 3 to 4 days and that this reflected this commitment would be for a year as asserted by Mrs Matthews and was in return for being allowed to do the L’Oreal course. Again, the situation was confused to some extent by the belief she was self-employed, and she would be able to increase her earning capacity, but Razors Edge clearly believed they could require her to work these additional hours/day and Mrs Matthews felt she had no alternative to accept them. Had she been treated as employed at this time she would of course been paid an additional day’s pay. However, the time sheets revealed that while some weeks she would have additional customers, her argument was correct that she would typically be left to spread her existing customer base over 4 days instead of 3 days as was previously the case. There was an absence of convincing evidence from the available respondent witnesses that this was a voluntary arrangement or that it resulted in significant increased earnings for Mrs Matthews.[62]Mrs Matthews says that she was ridiculed on 25 October 2018 by Mr Roberts in a meeting with her colleagues JP and Daniel when they were informed that the salon was entering a L’Oreal Colour Specialist competition. It was understood that the salon would nominate a team of stylists, one doing colour, one doing cutting and one doing styling (which we understood to be styling the models in terms of fashion and accessories as opposed to their hair). Mrs Matthews’ two full time male colleagues (JP and Daniel) were nominated as the stylists who would be responsible for the colour and cutting of the model’s hair and she nominated as the fashion stylist. Mrs Matthews felt that this amounted to a demotion and expressed her unhappiness with Mr Roberts.[63]Mr Roberts was manager in charge and the Tribunal accepted that he was responsible for selecting those stylists whom he felt were best for the relevant tasks. Mrs Mathews said that he told her that in relation to JP and Daniel, ‘they are stronger’ but did not suggest that he made any reference specifically to their sex or that they worked full time. The Tribunal understood that all 3 stylists were trained by L’Oreal to provide the specialist colour treatment and that JP and Daniel were also described as being engaged on a self-employed basis.[64]Mrs Matthews said she felt humiliated and singled out for criticism but did not take any further action following this decision. Covid and claimant’s return to work The claimant’s health in 2020[65]As was discussed in the judgment on the preliminary issue by EJ Johnson dated 8 November 2021 Mrs Matthews developed Covid related symptoms from late March 2020 and these symptoms increased in their severity from mid-April 2020. This resulted in her being admitted to hospital on two occasions because of breathing difficulties. She was diagnosed as suffering from Covid when she tested positive.[66]It was accepted by EJ Johnson dated 9 March 2022 that Mrs Matthews was disabled within the meaning of section 6 EQA at the relevant times in these proceedings relating to the complaints of disability discrimination which have been alleged. The claimant’s termination of employment[67]Following the relaxation of the government’s initial Covid restrictions in the summer of 2020, the first respondent planned to reopen its business from 7 July 2020. Because the first respondent had believed Mrs Matthews to be self-employed, they assumed that she would sort out her own furlough payments.[68]Mrs Matthews messaged Mr Roberts on 22 June 2020, (p.207). She explained that she had contacted her GP who advised her that she was only fit to return to work on a part time basis, working 2 days per week for the initial 4 weeks of reopening of the business. Mr Roberts did not reply immediately and instead confirmed on 23 June 2020, that he would telephone her the next day. The call did not appear to go well because subsequent discussions suggested that while the first respondent might agree to 3 days per week, Mrs Matthews maintained that her GP advised her to only work 2 days per week as part of what was effectively a phased return to work.[69]As a consequence, Mrs Matthews send the following email to Mr Roberts on 26 June 2020: ‘Hi james I’m writing this email because you asked me to get a fit to work note from my doctor I did this it stated I will be well enough to come back to your salon on 2 days a week for the next 4 weeks to keep an eye on my recovery from covid 19 and pneumonia, you have said on the phone and messages that 2 days a week isn’t suitable for your company. You have suggested financially, 3 days a week is too much at the moment as I can’t commit and I wouldn’t want to let people down. In a text message you have told me I could come back week 1 do 1 day week 3 do 3 days week 4 do 4 days, this is impossible for me to do with my recovery so their for I have no choice to tell you I will not be coming back, please could you give one of the girls my hair dryer. Thanks Hayley’ [sic].[70]A series of messages then following concerning Mrs Matthews’ hairdryer and her decision not to return to work. Mr Roberts sent a further message to Mrs Matthews on 30 June 2020 which confirmed to her that she could have her hairdryer back. It does not provide the reader with any indication that he was seeking to persuade Mrs Matthews to return to work and suggested a degree of acquiescence on his part concerning her notice to terminate her employment. However, at no stage during the period following 22 June 2020 did Mr Roberts confirm that Mrs Matthews had resigned, nor did he expressly ask her to reconsider the decision to resign.[71]Mrs Matthews sent a further email to Mr Roberts on 2 July 2020 expressing her concern about the way in which she believed Mr Roberts had treated her during her ill health. She reminded him that her doctor had recommended that she should initially only work 2 days a week and why she believed Mr Roberts suggested alternative options would not be practicable for her. She also said: ‘As you didn’t even have courtesy to respond to my email of last week, I feel that I have had no alternative other than to resign with immediate effect and pursue appropriately paid work to look after my future in line with my doctor’s orders. I am therefore recording my leave date as yesterday 1st July 2020’.[72]The claimant stated in her claim form that she resigned on 1 July 2021 when she sent an email on that date. Whereas her evidence she said that she actually resigned on 26 June 2021 when she sent an earlier email to Mr Roberts. While EJ Johnson found in his judgment on the preliminary issues that Mrs Matthews evidence was ‘somewhat confused’, he was persuaded that ‘she did give sufficiently convincing evidence that on one of those days, she had no choice to continue working with first respondent and that she wished to resign. She did not receive a response to either of these emails and it is really not necessary to identify the precise date of termination by way of resignation for the purposes of the preliminary issues and the dates which appear to be in issue.’[73]EJ Johnson’s conclusion in paragraph 31 of that judgment was that: ‘On balance and having considered the evidence, it appeared to me that from 26 June 2021, the claimant had reached a point where she felt an impasse had been reached between Mr Roberts and her concerning the manner of her return to work. She did communicate at this point her intention to resign but recognised that this might be considered as an ‘ultimatum’, which could reinvigorate their discussions. Mr Roberts failure to reply suggested that he was not sure of what to do regarding that email and the claimant expected a reply before she would consider her resignation to take effect. This resulted in the email being sent on 1 July 2020 which was unequivocal in her intention to resign and gave the impression that she felt her earlier email had not resulted in her resignation on 22 June 2020.[74]He went on to say that: ‘It is telling that she chose to present her claim relying upon the termination date on 1 July 2020 and while upon reflection as the case progressed, she has readdressed this belief, I am satisfied that the date of termination for the purposes of considering the preliminary issues before me was 1 July 2020.’[75]The Tribunal at the final hearing saw no reason based upon the evidence that it heard to contradict these findings and would agree that on balance this was the way in which Mrs Matthews expressed her decision to resign and reflected her frustration at the failure of Mr Roberts to effectively engage with her finding a solution to this ongoing problem of how she could return to work while recovering from what was a particularly nasty attack of Covid and which had placed her in a position that she faced a lengthy recovery from its after effects and the ongoing impairments that it caused her. The transfer from the first respondent to the second respondent[76]It was clear from the pre-resignation correspondence and the return-to-work correspondence sent by Mr Roberts and/or the first respondent to Mrs Matthews that no mention was made of a proposed or imminent transfer to the second respondent. Mrs Matthews gave evidence that for a number of years, Mr Roberts had talked to her about buying the business. However, while this was an example of Mrs Matthews giving credible and reliable evidence during the hearing, the Tribunal does not conclude that this was enough to demonstrate notice of transfer of the business to him. This was simply Mr Roberts sharing with a colleague detail of an aspiration that he had for the future and while it was a quite reasonable one to hold, it could not be construed as any clear notice being given and as Mrs Matthews was seeking to return to work in the summer of 2020, an imminent transfer was not a matter that was within her knowledge.[77]Ms Cross mentioned that a staff meeting took place on 22 June 2020 to discuss the issue of the proposed transfer from the first respondent to the second respondent, but we accept based upon the evidence before us, that Mrs Matthews was not present and nor were we persuaded that she was made aware of what was discussed through other forms of communication.[78]The Tribunal noted that the first respondent’s management saw Mrs Matthews in 2020 as being self-employed. The transfer agreement (from p226), although dated 17 August 2020 provided an effective date of transfer (described as ‘effective time’) at close of business on 6 July 2020. This date was after Mrs Matthews’ date of resignation. Schedule 3 of the transfer agreement (p247) does not record Mrs Matthews as being a relevant employee transferring rom the first hearing bundle included a copy of the Business Sale Agreement between the first respondent to the second respondent.[79]While we acknowledge that the respondents would have considered Mrs Matthews to be a self employed person, there is insufficient evidence available to persuade us that she was considered as being subject to the transfer, but more importantly, that she was aware of the transfer when she resigned and that this decision was in any way motivated by the prospect of such a transfer. The Law Constructive Unfair Dismissal
The Law
[80]Section 95(1)(c) of the Employment Rights Act 1996 provides that an employee is dismissed by his 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.[81]In Western Excavating (ECC) Ltd v Sharp 1978 ICR 221 it was held that in order to claim constructive dismissal an employee must establish:(i) that there was a fundamental breach of contract on the part of the employer or a course of conduct on the employer’s part that cumulatively amounted to a fundamental breach entitling the employee to resign, (whether or not one of the events in the course of conduct was serious enough in itself to amount to a repudiatory breach);(ii) that the breach caused the employee to resign – or the last in a series of events which was the last straw; (an employee may have multiple reasons which play a part in the decision to resign from their position. The fact they do so will not prevent them from being able to plead constructive unfair dismissal, as long as it can be shown that they at least partially resigned in response to conduct which was a material breach of contract;(iii) that the employee did not delay too long before resigning, thus affirming the contract and losing the right to claim constructive dismissal.[82]All contracts of employment contain an implied term that an employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.[83]In Croft v Consignia plc [2002] IRLR 851, the Employment Appeal Tribunal held that the implied term of trust and confidence is only breached by acts and omissions which seriously damage or destroy the necessary trust and confidence. Both sides are expected to absorb lesser blows. The gravity of a suggested breach of the implied term is very much left to the assessment of the Tribunal as the industrial jury. Breach of contract[84]The Employment Tribunals Extension of Jurisdiction Order 1994 provides that proceedings for breach of contract may be brought before a Tribunal in respect of a claim for damages or any other sum (other than a claim for personal injuries and other excluded claims) where the claim arises or is outstanding on the termination of the employee’s employment. Part-time Workers (Protection of less favourable treatment) Regulations 2000[85]The 2000 regulations under regulation 5 state that a part-time worker has the right not to be treated by his employer less favourably than the employer treats a comparable full-time worker as regards the terms of their contract or being subject to any detriments by an act or deliberate failure to act by their employer.[86]Regulation 5(2) qualifies this right by making clear that the treatment complained of will only contravene these regulations if the treatment is on the ground that the worker was a part-time worker, and it is not justified on objective grounds.[87]When bringing a complaint, the worker should rely upon a full-time comparable worker and at the time of the alleged treatment, regulation 2(4) both workers should be employed by the same employer under the same type of contract and engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience. Additionally, the full-time worker should work or be based at the same establishment as the claimant, or if none available, a worker based at a different establishment but who satisfies the other requirements of regulation 2(4).[88]These regulations are subject to a time limit for presenting a complaint to the Tribunal. Regulation 8(2) states that a Tribunal shall not consider a complaint unless it is presented before the end of the period of 3 months of the less favourable treatment or detriment to which the complaint relates, or if part of a series of similar acts, the last of them. A Tribunal may consider a complaint that is out of time, if in all the circumstances, it believes it is just and equitable to do so. Direct discrimination (section 13 EQA)[89]Under section 13 EQA, a person will discriminate against another if because of a protected characteristic (sex in this case), that person treats the other less favourably than they would treat others.[90]Section 39 EQA, provides that an employer must not discriminate against an employee of theirs by, amongst other things, subjecting them to a detriment. Indirect discrimination (section 19 EQA)[91]Section 19 EQA provides that a person discriminates against another if they apply a provision, criterion or practice (known as a ‘PCP’) which is discriminatory in relation to the relevant protected characteristic of the other person.[92]The PCP is discriminatory if a person applies it to persons who do not share the claimant’s protected characteristic, it puts persons with the claimant’s protected characteristic at a particular disadvantage when compared with those who do not share that protected characteristic and, it would put the claimant at that disadvantage. Finally, the person discriminating, may succeed in defending such a claim of discrimination if they can show that the PCP complained of, is a proportionate means of meeting a legitimate aim. Reasonable adjustments (ss20 &21 EQA)[93]Sections 20 and 21 provide that when an employer applies a PCP which puts a disabled employee at a substantial disadvantage in relation to a relevant matter in comparison to persons who are not disabled, the employer is under a duty to take such steps as it is reasonable to have to take to avoid the disadvantage.[94]Paragraph 20 of Schedule 8 of the EQA provides that an employer is not expected to make reasonable adjustments if they do not know and could not reasonably have been expected to know that the employee had a disability and was likely to be placed at the disadvantage in question. Time limits (s123 EQA)[95]A complaint relating to discrimination at work will not be accepted by the Tribunal if it is presented after the period of 3 months starting with the date of the act to which the complaint relates, or such other period as the Tribunal thinks just and equitable.[96]Section 123(3) provides that conduct extending over a period is being treated as done at the end of that period and a failure to do something is the person in question decided on it. Burden of proof (s136 EQA)[97]Section 136 provides that when where there are facts from which the Tribunal could decide, in the absence of any other explanation, that a person contravened the relevant provision of the EQA, the Tribunal must hold that the contravention occurred. This will not be the case if the person concerned can show that they did not contravene the relevant provision. Holiday pay[98]Regulations 13, 13A and 16 of the Working Time Regulations 1998 (as amended), when read together provide that a worker is entitled to 5.6 weeks (up to a maximum of 28 days) paid leave in any leave year. A worker’s contract may provide an entitlement in excess of this statutory minimum. Regulation 14 provides that a worker is entitled to be compensated for accrued but untaken leave upon the termination of their employment. The leave entitlement may only be taken in the leave year in which is due, subject to any relevant workforce agreement. Unlawful deduction from wages[99]Section 13 ERA provides that an employer must not make a deduction from a worker’s wages employed by him unless the deduction is required by statute, under a relevant provision in a worker’s contract, or the worker has previously signed their written agreement or consent to the making of the deduction in question. Transfer of Undertakings (Protection of Less Favourable Treatment) Regulations 2006 (TUPE)[100]Regulation 4 of TUPE provides the effect of a relevant transfer upon a contract of employment. Regulation 4(1) a relevant transfer operates so that a contract of employment is not terminated by the transferor (first respondent in this case), but instead transfers to the transferee (second respondent in this case).[101]Under regulation 4(2) (amongst other things), all transferors’ rights, powers, duties and liabilities under or in connection with an employee’s contract transfer to the transferee.[102]Regulation 4(3) says (amongst other things), that the provisions of regulation 4(1) applies to an employee employed immediately before the transfer, but who is dismissed before that transfer and for reasons connected with the transfer, read in conjunction with regulation 7. Discussion
Preliminary matters
[103]Firstly, and for the avoidance of doubt, it is worth reminding ourselves of the previous decision in the preliminary hearings which took place on 10 May 2021 and 8 November 2021.[104]Mrs Matthews was at all material times an employee of the first respondent.[105]Mrs Matthews was disabled within the meaning of section 6 EQA by reason of impairments connected with Covid 19.[106]Mrs Matthews’ employment did not transfer to the second respondent on 6 July 2020 or thereafter. However, in relation to this, the first respondent reserved the argument that her resignation on 1 July 2020 was connected with her knowledge that she would transfer to the second respondent. Part-time worker detriments[107]The Tribunal noted that one allegation related to a course in 2017 and concluded that Mrs Matthews was probably refused attendance. However, it noted that no grievance was raised at the time, and it appeared unrelated to other matters.[108]The detriment complained of clearly took place more than 3 months before the claim form was presented on 12 August 2020 (and when early conciliation began on 7 August 2020). Based upon the information before it, the Tribunal did not consider it just and equitable to extend time to allow the complaint in relation to this allegation because the proceedings arose from the events of 2020 which led to Mrs Matthews’ resignation and it would not be in the interests of justice to expect the first respondent to answer to allegations which happened a number of years previously and which did not result in a grievance or ongoing challenge at the time which indicated how significant Mrs Matthews found the refusal which she complained of at the time it arose.[109]In relation to the Christmas 2018, Mrs Matthews was expected to work normal hours over Christmas 2018 period. But given that there was a mutual belief that she was self-employed meant that her attendance was dependent upon her having customers coming into the salon so that she could earn. As it happened, she did not work the so called ‘normal hours’ and Mrs Matthews did not suggest that she was compelled to work on 30 December 2018 and we found that the recorded entry was an error as it fell outside of her normal working pattern. In terms of less favourable treatment, we were unable to conclude that these events amounted to her being treated less favourably because of her part time status given that Mrs Matthews was compelled to work more hours than she was contractually expected to work. For these reasons we do not consider this allegation proven. In addition, we noted for similar reasons given in relation to the previous 2017 allegations (above), this complaint was presented out of time, and it is not just and equitable to extend time and accept the complaint for those reasons given.[110]There was an agreement between Mrs Matthews and the first respondent that from June 2019 to March 2020 she would work 4 days instead of her usual 3 days. We found that this was effectively an agreed extension to her part time working days in return for her being allowed to attend the L’Oreal colour course which ran from January 2019 to April 2019. There did appear to be a disingenuous behaviour on part of Mr Roberts in relation to this proposal but were unable to find that it was connected with Mrs Matthews’ part time status. Rather, it was simply a means of the first respondent seeking to acquire additional availability in colour qualified stylists once she had completed her training. This may have been with a view to increase capacity in the salon with her new skills, but we also accept that by being self-employed for 4 days instead of 3, Mrs Matthews could potentially find that her existing work was spread over more days with no additional new business being acquired. That said, she would have been available to provide these services if the work arose on the additional day worked. Her unpaid status only arose when she was in work and she did not with a paying a client, but it was not the case she was being made to come in with no possibility of earning. We were unable to find this allegation proven that she was treated less favourably by reason of her part time status because of the perceived nature of her self-employed status at that time and balancing of a salon investing in training balanced against ensuring there was a return to the salon in Mrs Matthews being available to provide the additional skills once trained.[111]However, in any event, we found that these additional hours ended by March 2020 and the complaint was not made to the Tribunal until more than 3 months following the end of that period. It did not appear to be connected with her decision to resign later in the year and for the reasons already provided above, it is not just and equitable to extend time to allow this complaint.[112]Mrs Matthews also alleged that she was ridiculed on 25 October 2019 by Mr Roberts in relation to the L’Oreal Colour Specialist competition. While we found on balance of probabilities that Mr Roberts said that her two male colleagues (JP and DS) were the stronger members of the team which justified their being placed in the colour and cutting roles, we were unable to accept that his reason for making this decision and the statement when challenged was motivated by sex and/or part time status. It was simply an expression of opinion and while the comparators were two men, who the first respondent said were engaged on a self-employed basis and we understood worked longer hours, that was not enough to persuade us that this should shift the burden of proof.[113]On the face of it, the comments made were a simple statement of opinion and inevitably there was only one job available for each skillset required in the exercise and the team leader, (who doubtless would want to win the event on behalf of the event), would make decisions based on his perception of ability. As it was, it did not connect with other findings of fact that we have made which might suggest an underlying discriminatory motive and nobody likes to be described as not being the strongest candidates, it appeared to be an honest answer to an expression of disappointment, although in the competitive environment of the salon, it perhaps might have been said in less delicate way than might be encountered with larger employers.[114]However, this again is an allegation which we must find as being out of time for the reasons given above and cannot be accepted even if it was well founded in terms of the substance of the allegations made.[115]Mr Marshall argued in final submissions that this complaint ‘fell at the first hurdle’ as she relied upon comparators who were both self-employed and who could not be considered as lawful comparators in which to bring this complaint. Having considered this submission and regulation 2(4) of the part time worker regulations, the Tribunal must agree with Mr Marshall. The claimant relies upon two comparators JP and DS and although both of these male comparators were understood to work full time and at the same establishment as Mrs Matthews. However, there was no dispute that they were both engaged on a self-employed and we did not see any evidence to the contrary. The difficulty for Mrs Matthews, therefore, is that she is relying upon comparators who are not employed (as either employees or workers) under the same type of contract. It has been determined that despite a misunderstanding between the first claimant and first respondent, Mrs Matthews remained an employee. However, the same analysis has not taken place in relation to the comparators and as a consequence, the asserted selfemployed status for JP and DS is understood to be the correct employment status. As a consequence, we must conclude that Mrs Matthews has failed to satisfy the necessary requirement of the part time worker regulations that the comparators relied upon are employed by the employer under the same type of contract. JP and DS and not comparable full-time workers and regardless of the findings above, this complaint must fail. Direct sex discrimination (s.13 EQA)[116]It should be noted that Mrs Matthews repeats the allegations made in relation to the complaint of less favourable treatment by reason of her part time status.[117]In broad terms, the alleged treatment occurred, and it was largely done by Mr Roberts on behalf of the first respondent. Mrs Matthews compares herself with JP and DS, who were both male and therefore did not share her protected characteristic of sex, i.e. being female. She does not rely upon hypothetical comparators. Section 23 EQA requires no material difference in the circumstances between the claimant and comparator. Apart from the alleged ridicule, there was little evidence that JP and DS found themselves in circumstances to Mrs Matthews.[118]There was a refusal to allow Mrs Matthews on the course in 2017 while taking place, did not appear to result in less favourable treatment, but in any event, it was presented out of time and for the reasons given above in relation to the part time regulations above, it is not just and equitable to extend time.[119]The Christmas 2018 working however, was not a detriment as it was simply an expectation that Mrs Matthews work normal hours with the extra day as described above being a genuine error rather than a less favourable act. Additionally, this allegation was presented out of time and for the reasons given above in relation to the part time regulations above, it is not just and equitable to extend time. Evidence was not provided that the comparators JP and DS were treated any differently and were not appropriate comparators for this complaint.[120]The allegation that Mrs Matthews work an extra day from 2019 to 2020 arose from a misunderstanding between employer and employee that she was at that stage, engaged as a self-employed worker. Accordingly, the additional day that she was asked to work was not intended to be unpaid, because she was available to take customers on the day when she was in the salon. We appreciated that this could effectively amount to not being paid if the additional custom did not appear. However, based upon the evidence that we heard as self-employed workers, JP and DS were also self employed and would have attended their working days without being paid, but on the basis that they were available to take paying customers, from which they would derive income. Accordingly, we were not persuaded that Mrs Matthews was subject to less favourable treatment in relation this allegation as she has not been able to identify comparators who would have been treated differently in no less different circumstances.[121]In terms of the alleged ridicule relating to Mr Roberts reply when Mrs Matthews was given the stylist role rather than one of the other two more hairdressing focused roles, the actual alleged comment was not in our view ridicule, but an honest (albeit blunt), comment. However, it did not amount to a detriment. The comparators JP and DS were male, were part of the same selection exercise and were arguably able to be selected for the better jobs in the team than was offered to Mrs Matthews.[122]For the purposes of section 136 EQA, the Tribunal did acknowledge that this would suggest that Mrs Matthews gave evidence of facts which could demonstrate in the absence of any explanation that Mr Roberts working on behalf of the first respondent contravened section 13 EQA, by treating her less favourably than JP and DS. Both male hairdresser comparators were selected for the more prestigious roles in the competition team, namely the cutting and colouring. However, having heard the evidence during this hearing, we did conclude that the decision and the comment made was based upon his genuine belief that JR and DS were the better candidates and this was a decision of ability rather than bias on grounds of sex. The words used did not amount to ridicule but a rather frank opinion as to Mrs Matthews.[123]However, in accordance with s123 EQA, whether or not there was direct discrimination, we concluded for the reasons given in relation to the part time working less favourable treatment allegations, that the claimant failed to notify ACAS of early conciliation or present her claim form within 3 months of the allegations of direct discrimination taking place. Each incident was separate from the other and was not subject to an ongoing grievance or complaint. Like the part time worker regulations, we also considered the question an extension on just and equitable grounds but felt it was not just and equitable to grant the extension for the reasons given above. Indirect sex discrimination (s.19 EQA)[124]In relation to this complaint the PCP identified, namely that Mrs Matthews was required to attend the salon for an additional working day every week for a period of 12 months over and above the previously agreed working hours was something which was applied to her alone and was not applied to colleagues who did not share her protected characteristic, namely sex. This is a fundamental requirement for an indirect discrimination complaint to succeed. It may have been that a more general practice existed in relation to working hours, but this was not what the Tribunal was asked to consider. It is perhaps an argument that falls better as alleged treatment under s.13 EQA and or course that complaint is considered above.[125]Accordingly, this complaint must fail, but even if the Tribunal had been confronted with a PCP which fell better within the requirements of s19 EQA, if it related to those matters alleged in relation to part time working/direct discrimination, we would have nonetheless rejected them by reason of their being presented out of time for the reasons given above in relation to the other discrimination complaints contrary to section 123 EQA. Reasonable adjustments (s20 & s21 EQA)[126]This complaint of course can only relate to the protected characteristic of disability under s6 EQA and Mrs Matthews is considered disabled by reason of the decision of EJ Johnson at the previous preliminary hearing.[127]In terms of the PCP relied upon, Mrs Matthews asserted that the first respondent required her to comply with their instructions that she attend the salon on 4 days each week following the lifting of the first lockdown restrictions in the summer of 2020. Effectively, this was a return to work based upon her pre lockdown and pre disability hours.[128]In terms of whether this requirement amounted to Mrs Matthews facing a substantial disadvantage, we have evidence that her GP advised reduced hours for at least the first 4 weeks of her return to work, being fewer than 3 or 4 days a week, initially at least. Naturally, this could have been reviewed over time, but the first respondent was on notice at this point of the difficulties that Mrs Matthews faced in returning to work following Covid.[129]The first respondent offered Mrs Matthews phased return to work over 4 weeks working back to 4 days a week or alternatively, a return to work with 1 day a week until she was well enough, with no fixed time limit where a return to work was expected. We did not hear evidence from Mr Roberts as to why these proposed adjustments were considered reasonable, but there was evidence that some flexibility was being offered. Mrs Matthews wanted 2 days for 4 weeks with a review thereafter and of course there was no explanation by the first respondent as to why 2 days not a reasonable proposal. We accept that Mrs Matthews was seeking a reasonable adjustment and the first respondent simply failed to demonstrate either during employment or in evidence during hearing, to rebut the allegation.[130]Accordingly, we concluded that there was a failure to make reasonable adjustments and it seems unfortunate that this treatment arose as it appeared that further conversations with Mrs Matthews and perhaps with her GP’s involvement could have given rise to a mutually acceptable solution.[131]In relation to this allegation, Mrs Matthews was relying upon a continuing discussion regarding her return to work and which effectively ended when she resigned. Accordingly, this was a continuing act which was brought as a reasonable adjustments complaint within 3 months of the last act taking place on 1 July 2020 when she resigned. Unfair dismissal[132]Mrs Matthews was an employee with more than 2 years continuous service at the effective date of termination of employment on 1 July 2020 and therefore is qualified to bring an unfair dismissal complaint.[133]We were unable to conclude that there was a continual bad treatment from management over 24 months as alleged. There were issues raised in this claim and which have been discussed above beginning in 2017 with the course refusal, the 2018 competition ‘ridicule’ issue, the Christmas 2018 issue and additional days worked. But these had concluded before the Covid pandemic reached the UK in March 2020. Some of these matters did not appear to be poor treatment that struck at the heart of the contract, but at their highest, amounted to lesser blows that an employee was expected to tolerate and which at the time, which Mrs Matthews clearly did, because she did not challenge them. Even the additional days allegation had concluded by March 2020 and were not the subject of challenge or grievance brought by her. All of these matters are therefore isolated from the reason to resign and out of time if relied upon. The real issues arose with the first lockdown coming to an end and the discussions concerning a return to work and this was the second allegation made in relation to the constructive unfair dismissal complaint.[134]In terms of whether or not there was a repudiatory breach in relation to the second allegation, the Tribunal noted that Mrs Matthews relied upon a number of matters which led to her decision to resign. Her email dated 26 June 2020 provided clear exasperation on her part with the first respondent. We found that it was insufficiently clear to indicate her resignation, but demonstrated it was something she was beginning to contemplate. Her reference to relinquishing her hairdryer might be seen implicitly as a resignation decision, but on balance the context of letter overall suggested that she was teetering on the edge of resignation. The first respondent created a difficulty for themselves however, by failing to react to the issues raised and instead, appeared to ignore the serious matter raised and which could effectively be construed as a grievance by Mrs Matthew.[135]A reply was eventually sent when Mr Roberts replied to Mrs Matthews on 29 June 2020, effectively offering 1 day or 4 day return to work with the absence of any flexibility given that he used the words ‘if that doesn’t work for you I’m sorry’. We accept that Mrs Matthews concluded that the reasonable implication to draw from this email was that she should return to work using one of these two provided options or alternatively she should not expect to come back to work. It gave her an ultimatum and there was an absence of a window being provided for any further discussion.[136]The email (p223) made clear that Mrs Matthews wished to resign on 1 July 2020 because she felt that she was being treated badly. She noted the refusal by the first respondent to accept the reasonable request made by her GP concerning the way in which she returned to work. Instead, there was an insistence that she return to work on the basis that they proposed without any discussion. Given that the first respondent believed at that time that Mrs Matthews was self-employed, the first respondent may have believed it could handle this matter in the way that they did. However, Mrs Matthews was selfemployed and despite being aware of her ongoing health issues, the first respondent was unwilling to cooperate. We did conclude therefore, that this amounted to a fundamental breach of contract and that this was the principal reason for Mrs Matthews decision to resign.[137]Moreover, we concluded that Mrs Matthews did not delay following the first respondent’s failure to resign.[138]The first respondent did not appear to argue potentially fair reason for the dismissal, but given their belief that Mrs Matthews was self-employed, they would not have followed processes expected for the termination of an employee’s employment. Accordingly, this complaint must fail. l Breach of contract/wrongful dismissal[139]Mrs Matthews resigned without notice. However, we found that she was entitled to do so without working her contractual notice period because of the fundamental breach of contract on the part of the first respondent for the reasons given above in relation to constructive unfair dismissal.[140]In relation to wrongful dismissal, we do of course have to consider that there was conduct that amounts to repudiatory breach of contract by the first respondent and this complaint succeeds. Holiday pay/unlawful deduction from wages[141]Our approach relating to these two complaints was clearly affected by the misunderstanding concerning Mrs Matthews’ employment status and this was reflected in the list of issues. However, these complaints together with ‘other payments’ formed part of the complaints advanced in section 8.1 of the claim form. They were not properly set out in the list of issues but given that the Tribunal has found that Mrs Matthews was an employee and that she was entitled to resign without notice, there may well be successful complaints of holiday pay and unpaid wages. We would emphasise that at this stage, these complaints succeed on an ‘in principle’ basis and are subject to hearing evidence at the remedy hearing which will consider the quantification of the successful complaints and whether there were any losses under these complaints. The Employment Tribunals Extension of Jurisdiction Order 1994 provides that proceedings for breach of contract may be brought before a Tribunal in respect of a claim for damages or any other sum (other than a claim for personal injuries and other excluded claims) where the claim arises or is outstanding on the termination of the employee’s employment. Transfer of undertakings[142]Mrs Matthews has been able to successful argue that she was employed by the first respondent (transferor under TUPE) immediately before the transfer of its business to the second respondent (transferee under TUPE) immediately before the transfer on 6 July 2020.[143]The transfer from the transferor to the transferee on 6 July 2020 was a relevant transfer for the purposes of regulation 3 TUPE and this potentially triggers the effects on contracts of employment identified in regulation 4.[144]Mrs Matthews has successfully argued that she was constructively unfairly dismissed by the first respondent. The conduct of the repudiatory breach related to a failure by the first respondent to cooperate in agreeing an appropriate way of returning to work.[145]This decision to resign could in no way be considered as a reason connected with the transfer whether or not it was an ‘ETO’ reason under TUPE Regulations. The decision arose from failures to engage with reasonable adjustments and a return to work and Mrs Matthews was not aware of the imminent transfer and it was not the case that the real reason behind her resignation could be considered as relating to the transfer.[146]Accordingly, Mrs Matthews resignation and termination of employment do not involve circumstances where any of her claims passed as a matter of law from the first respondent transferor to the second respondent transferee as her employment did not end by reason of the transfer in accordance with regulations 4(1) to (3) TUPE.
Conclusion
[147]Mr Marshall submitted that this was a complicated claim, and the Tribunal would agree with him. It has been at times confusing covering a lengthy timeline, complicated business arrangements, misunderstandings as to employment status, time limits and a transfer of business with unfortunately one party declining to assist at the Tribunal hearing.[148]However, while some of the allegations made were not well founded, there was the basis of a claim arising from the first respondent’s failure to engage with Mrs Matthews when the first lockdown restrictions relaxed and when they were looking to reopen. While it was a stressful and timeconsuming experience for those involved with businesses, there was still a need to behave appropriately towards employees and that included those like Mrs Matthews who had suffered from was would not be described as long Covid and who needed support and adjustments to return to work.[149]Accordingly, Mrs Matthews was able to demonstrate the following complaints should succeed: a) Constructive unfair dismissal under s95(1)(c) ERA b) Reasonable adjustments under ss20 &21 EQA. c) Breach of contract/wrongful dismissal[150]The complaints of holiday pay and unlawful deductions from wages are also in principle successful, but on the understanding that Mrs Matthews will need to prove actual losses at the remedy hearing in relation to these complaints now that her employment status has been confirmed. It now appears that the complaint of ‘other claims’ identified under section 8.1 of the claim has not been pursued and it is not necessary to consider this matter further.[151]The complaints of direct and indirect sex discrimination and less favourable treatment on grounds of part time status are not successful and this relates to the treatment not being discriminatory, the qualification of the asserted comparators and significantly, that the complaints were presented out of time.[152]The case will now proceed to a remedy hearing before a full Tribunal with a hearing length of 1 day to consider the successful complaints and to determine whether there is actually evidence of a loss of accrued holiday and/or unlawful deduction from wages. Further case management orders will be provided in due course, but the parties are invited to propose suggested case management orders for consideration within 14 days of this judgment being sent to the parties. RECONSIDERATION
Conclusion
Conclusion
Conclusion
[1]These reasons are provided following the presentation of the application for reconsideration by the first respondent, the Tribunal has reviewed their notes of the final hearing. The judgment dated 27 March 2023 is therefore varied as described above.[2]It is recognised that some confusion took place at the beginning of the final hearing because the list of issues had not been finalised and some discussion was required before the hearing of evidence could begin.[3]A rereading of the Tribunal’s notes of the preliminary discussions of the first day of the final hearing records the claimant’s withdrawal of the breach of contract/notice pay complaint and the judgment on liability should be that this particular complaint is dismissed.[4]The Tribunal does not accept that there was a formal withdrawal of the holiday pay complaint, and this remained an issue to be determined as part of the list of issues during the final hearing. The first respondent submitted at the conclusion of the hearing (as part of final submissions), that the claimant’s entitlement was unclear, but it was hoped that the parties could resolve this matter between themselves. The claimant submitted that there must be statutory annual leave entitlement owing, ‘though not much’. In other words, the holiday pay claim was unresolved at the point the hearing concluded and the Tribunal was entitled to make the findings that it did, but on the basis that any actual entitlement would involve consideration of evidence relating to remedy at that subsequent hearing dealing with the successful complaints.[5]The unlawful deduction from wages complaint has also been reconsidered and the Tribunal finds that it is unsuccessful on the basis that there was insufficient evidence advanced by the claimant during the final hearing to support a positive finding in respect of that complaint in the claimant’s favour. Accordingly, the unlawful deduction from wages complaint is unsuccessful.[1]Completed years of service at date of effective termination = 12 years Weeks’ pay = £320.96 per week gross[3]Claimant’s age at effective date of termination = 34 (therefore 1 week’s pay for each completed year)[4]Calculation for basic award is therefore: (£320.96 x 12) x 1 = £3851.52 Subtotal (Basic Award) £3851.52 B. Compensatory Award (agreed apart from loss of statutory rights) Past loss of earnings = nil Future loss of earnings = nil[3]Loss of Statutory rights (2 x £320.96) = £641.92 Subtotal (Compensatory Award) £641.92 AGREED AWARD FOR HOLIDAY PAY Period 1 – 16/7/17 to 31/3/18 (£52.50 + commission) = £71.70 x 8.5 days = £609.45 Period 2 – 1/4/18 to 31/3/19 (£54.81 + commission) = £74.01 x 12 days = £888.12 Period 3 – 1/4/19 to 27/5/19 £76.67 (including commission) x 2 days = £153.34 Period 4 – 27/5/19 to 31/3/20 (£57.40 + commission) = £76.67 x 14 days = £1073.38 Period 5 – 1/4/20 to 1/7/20 (£61.04 = commission) = £80.24 x 6 days = £481.44 Subtotal (Holiday Pay) £3205.73 INJURY TO FEELINGS (Sections 20 & 21 Equality Act 2010 – failure to make reasonable adjustments in relation to disability discrimination complaint) £6,000 (Within mid point of lower band in accordance with ‘Vento’ – see Vento v Chief Constable of West Yorkshire Police (No2) [2003] IRLR 102) Subtotal (Injury to Feelings) £6,000.00 Grand total £13,699.17 (3) This judgment is subject to the first respondent’s appeal lodged with the EAT and which has not yet been concluded. As the appeal only relates to the complaints of unfair dismissal and disability discrimination, the above award in relation to remedy for the complaint of holiday pay in the sum of £3205.73, should be paid by the first respondent to the claimant forthwith. (4) The balance of the award in relation to remedy for the unfair dismissal (£3,851.52 basic award and £641.92 loss of statutory rights) and disability discrimination (£6,000), totalling £10,493.44 will not become payable until one of the following events takes place in relation to the EAT appeal:(a) The EAT rejects the first respondent’s appeal for procedural reasons as explained to the Tribunal by Mr McPhail at the remedy hearing today; or,(b) The EAT rejects the first respondent’s appeal following its consideration of the grounds of appeal which they have raised. (5) If the first respondent’s appeal is successful either in whole, or in part, the parties should take account of this decision when considering whether or not the balance of the above remedy judgment should be paid to the claimant. If it is appropriate and necessary, they may make a further application to this Tribunal for consideration of the implications of the successful appeal in relation to this remedy judgment. (6) Finally, given that the claimant did not have any successful complaints against the second respondent, the claim insofar as it applies to the second respondent is dismissed. .