Miss K Gyumisheva and Mr A Arsenov v I Petkov: 2411497/2019 and 2411498/2019

EMPLOYMENT TRIBUNALS

Case No 2411497/2019, 2411498/2019

Between

Miss K Gyumisheva and Mr A ArsenovClaimant

I PetkovRespondent

Before

Employment Judge Leach

In person for claimant

In person for respondent

Date 10 June 2022

JUDGMENT

[1]At all relevant times the claimants were workers for the purposes of the Employment Rights Act 1996, Working Time Regulations 1998 and the National Minimum Wage Regulations 2015.

[2]The first claimant was an employee for the purposes of the Equality Act 2010.

REASONS

[1]The respondent operates a hotel business in Blackpool called the Fairview Hotel (“Hotel”).

[2]The claimants worked and lived at the Hotel between February 2018 and July 2019.

[3]Following the termination of those arrangements, the claimants brought these Employment Tribunal proceedings raising a number of claims(1) under Part II of the Employment Rights Act 1996 (“ERA) for unauthorised deductions from wages

(2) for various breaches of the Working Time Regulations 1998 (WTR)

(3) for not paying the national minimum wage, contrary to the National Minimum Wage Act 1998 and National Minimum Wage Regulations 2015 (together referred to as “NMW legislation”) and (the first claimant only) for discrimination (protected characteristic disability) under the Equality Act 2010 (“EQA”).

[4]This preliminary hearing was held in order to consider and decide whether the claimants were workers for the purposes of ERA, WTR and NMW legislation and also employees under EQA. B. The Hearing

[5]All parties are of Bulgarian nationality and English is not their first language. The claimants had asked for an interpreter which the Tribunal arranged. The respondent’s spoken English is very good, and he did not request (and did not need) an interpreter. The same applied to the respondent’s witnesses who are also Bulgarian.

[6]Whilst arrangements were made to hold in person hearing, it is clear that there had been some communication issues such that the claimants understood that the hearing was to take place by CVP. We therefore converted the hearing in to a “hybrid” hearing, the respondent and his witnesses being present in the Tribunal room, the claimants and their witnesses joining remotely and the interpreter in the Tribunal room (and interpreting for and from the claimants who had joined by CVP ). A large screen and camera present in the Tribunal room enabled all parties to see each other. The connection with the claimants was good and we were able to proceed.

[7]I am grateful to the appointed interpreter, Miss Spirdonova, for her hard work over the two days of the hearing.

[8]I was provided with an electronic bundle which incorporated the witness statements and has 493 pages in all. References to page numbers below are to this bundle. A large part of the bundle was made up of texts, mainly in Bulgarian but with an English translation for each.

[9]I heard evidence from the following people:-a. Kristina Gyumisheva, claimant (“KG”)

b. Asen Arsenov claimant (“AA”) (together, referred to as the claimants)

c. Vanislav Danchev,(VD) who worked at a hotel in Blackpool owned by VB (see below)

d. Alessio Esposito (“AE”) a friend of the claimants and former resident of the Hotel

e. Iliyan Petkov (respondent)

f. Veska Boyadzhieva (“VB”), the respondent’s partner

g. Ivan Balkandzhiev (IB), VB’s son. C. Findings of fact

[10]In this section I record my findings of those facts which are relevant to the issue of worker status. The Hotel

[11]The Hotel is one of a large number of hotels and guest houses in the wellknown seaside resort of Blackpool. It accommodates 32 guests. It provides guests with bed and breakfast accommodation.

[12]The respondent leases the hotel building and runs it as a business.

[13]Most of the guests book their accommodation through the website Booking.com although there are also telephone bookings and in person bookings.

[14]The respondent’s partner, VB, also operates a hotel business in the same way. VB’s hotel is called The Iona Hotel. The commencement of the claimants’ work at the hotel

[15]The claimants are a couple. By the time they started work at the Hotel they had lived in England for about two years obtaining short-term employment through employment agencies.

[16]The claimants became aware of the opportunity of working at the Hotel from an advertisement that the respondent placed on a Bulgarian website called ALO.BG. This was the only place where the opportunity was advertised. A copy of the advert was not included in the Bundle.

[17]The claimants responded and were interviewed by the respondent and VB via video chat. In the course of that interview the claimants were provided information about the work. They were informed that it was to manage the hotel; they needed sufficiently good English to be able to run the reception; they needed to clean rooms; they needed to make breakfasts. KG was able to inform the respondent and VB that she had previous experience as an employed cleaner.

[18]Prior to the claimants starting work at the hotel they met with the respondent and VB in person, at the hotel and spent a couple of days there. VB’s son, IB, was also there on this occasion.

[19]The claimants were given a series of instructions. They were provided with a plan of the hotel and the rooms, they were told how the rooms should be arranged, given instructions about laundry and cleaning, about what was required on reception, and instructions about the booking arrangements, including through Booking.com (although the Booking.com arrangements were controlled and administered by the respondent).

[20]Further instructions were provided about breakfasts. The respondent instructed the claimants about what to provide for English and Continental breakfast options. The respondent had an online account with a supermarket and breakfast foodstuffs were chosen and paid for by him and then he arranged for delivery or collection.

[21]The claimants were also instructed about maintaining a cash balance which would include cash received from direct bookings and a requirement to provide a daily report to the respondent.

[22]During that same few days, the respondent observed the claimants at work, including their dealing with hotel guests. He continued to provide instructions throughout this period. Hours of Work

[23]The respondent’s position was that the claimants were free to determine when to undertake their work. By way of example to demonstrate the claimants’ freedom to choose their working hours, the respondent referred to bank statements demonstrating that KG could visit a cashpoint and withdraw funds during the day. As for AA, the respondent noted and provided a report showing that he had engaged in playing a video game on his phone during the day. It appears that the images obtained by the respondent (pages 441-453) were taken from AA’s Facebook pages.

[24]The claimants’ evidence on this is that the operation of the Hotel effectively dictated their working day. The claimant's evidence is that the demands of their work at the hotel meant that they worked long hours. Their working day would start at around 7.00am when they were required to start to prepare breakfasts. They would work through the morning providing the breakfasts, clearing up the dining room after guests had eaten their breakfasts, being on reception to deal with check-outs and the collection of keys, stripping beds, washing the bedding, cleaning the rooms, drying the bedding, ironing it and preparing the rooms for the next guests.

[25]Check-in was between 2.30pm and 9.30pm and one of them would have to be available on reception during those hours.

[26]Sometimes guests would return home to the hotel late, sometimes guests would be drunk and rowdy; sometimes guests would forget their keys and on those occasions the claimants were required to be at work and available to assist and/or supervise guests.

[27]There was no written working pattern or rota; no arrangement by which the claimants recorded their working hours; the respondent did not at any time ask what hours the claimants had worked. They were expected to be available at all times to ensure that the hotel functioned and to deal with all issues that arose.

[28]The claimants were not busy at all times during the day. For example, being available on reception did not mean that whoever was on reception was hard at work at all times. The length of the working day varied. Inevitably there were times during the year when the hotel was busy and other times when it was very quiet, and the extent to which the claimants were required to work was affected by this.

[29]I also accept that, during the quieter times, only one of the 2 claimants may be needed at various rimes during the day and the other claimant would be able to take a break. This was unstructured and was organised between the claimants themselves, subject always to the timings and demands of the activities at the Hotel. Time away from work

[30]I accept the claimants’ evidence that when they did want to take a day away from work together, they would ask the respondent. They did not (and could not) decide for themselves when to take a day away from the hotel. Whilst it was open, the work at the hotel was ongoing. If a day off was required, then arrangements would need to be made to ensure that the hotel and its guests were being looked after. The claimant would ask the respondent and the respondent would decide whether to agree and to make arrangements.

[31]There were periods when IB was at the hotel and IB was able to cover. On one occasion in December 2018 (see below) the claimants went on holiday following a text exchange shortly before this: KG: Ok, I looking because arriving reservations for the end of the November and December and I want to ask you what do you think to do you will re-sending somewhere or? Respondent : Ivan wants to come to working 3/4 weeks to spend some money for New Year. KG: Ok, but will he be alone? Respondent : Yes, maybe he will opening just the weekends. We still thinking.

[32]Another message exchange occurred when IB was available to assist and the claimants could take a day away from work. Another message indicates that the respondent closed the hotel for some days and diverted guests to the Iona Hotel nearby (page 153 for example).

[33]Days off were either determined by the respondent or, if not, were approved by him. Right of Substitution?

[34]An important argument raised by the respondent is that the claimants were able to arrange for substitutes to carry out the work in their place.

[35]The claimants’ position is that whenever somebody else undertook work at the hotel then that was with the respondent’s permission.

[36]I heard evidence from AE, a long-term resident at the hotel. During part of the time that AE lived at the hotel there was a manager called Alessandro. During the time that Allesandro was the manager as well as the time that the claimants managed the hotel, AE helped out when it was busy. I accept AE’s evidence (and the evidence of the claimants) that the arrangements were made with the respondent or with the respondent’s approval. AE did not carry out these tasks for nothing. The arrangement with the respondent was that when he undertook work at the Hotel, he would receive a deduction from his hotel bill or would sometimes receive a payment in cash.

[37]Included in the bundle at pages 437 and 438 are emails that appear to be between IB and the respondent. These emails are written in English even though Bulgarian is the first language for both sender and recipient. There are four emails in all on these two pages. Two of these are dated 9 July 2018 and state as follows: “Hi Mr Petkov I am writing regarding Kristina and Asen. I know you agreed with them to run the hotel however they decide to but just wanted to ask you a favour. It would be great when they decide to rest or want to substitute them to tell me two days in advance. I also have my plans and it is good to plan in advance when to be available to substitute them. Otherwise, all is ok, I am happy with their work and it is average occupancy this time of the year – not so busy. Kind regard! Ivan”

[38]In response from respondent to IB: “Hi Vanko, Yes, I agree it is fair. Should be like this. I spoke with Kristina and Asen and they will notify you at least two days before they plan not to work. If you do not mind just send me in WhatsApp a short message when you substitute them. I just want to have a general idea of what’s going on in Fairview, who is in charge, etc. Thanks!”

[39]Another of these emails is dated 11 November 2020 from IB to the respondent: “Dear Mr Petkov, Sorry to bother you, but I think it is important and urgent. Kristina and Asen just asked me if I am able to substitute them in December 2019. They planned a holiday abroad and want me to be available until the end of the year. I am happy to confirm you I can substitute them but probably I will need one more person. Should I ask them to speak with Allesandro and to ask him if it is possible for him to get their job for December? If so he can move to Fairview Hotel in December and when Kristina came back we will fly together to the Dominican Republic. Please write to me as soon as possible about your decision. Have a good day! Ivan”

[40]The fact that this email is dated November 2020 referring to the possibility of substitution in December 2019 indicates that this is not a genuine email. The claimants’ contractual arrangements to work/provide services at the hotel terminated in July 2019. Insofar as the email refers to a holiday to the Dominican Republic, this was taken in December 2018.

[41]Assuming that there was somehow an electronic mix-up of all of these dates and the email did pre-date the holiday to the Dominican Republic in December 2018, the arrangements referred to in that email are inconsistent with the text messaging as noted at 31 above.

[42]The claimants raised concerns about the genuineness of these emails. In addition to those already noted, there is other cause for concern. The wording appears contrived, directed specifically to the issues in front of the Tribunal at this Preliminary Hearing. The emails are in English, not Bulgarian I also note that, whilst significant evidence has been provided by the parties for consideration at this Preliminary Hearing ( including many messages) no Whatsapp message examples have been provided as referred to at paragraph 38 above.

[43]However, accepting they are genuine, the emails do not take the matter much further. They demonstrate a maintenance of control by the respondent and they demonstrate there may be arrangements which the claimants can make for a day’s break away from the hotel. Those arrangements are with IB. The respondent is aware that IB is at the Hotel and is able to provide the claimants with a break from time to time. Given the requirements under the WTR for, for example, a 24-hour break in a seven-day period, that is not inconsistent with worker status.

[44]I also heard evidence that KG’s mother and her partner visited in Blackpool. I accept that KG’s mother’s partner did carry out some work for the respondent and also for VB at the Iona Hotel. KG’s mother’s partner, Kostadin Kostadinov, is a builder and he was engaged on an occasional basis to carry out building activities. He was not a substitute for the claimants. He provided work which was additional to and separate from the work that the claimants were carrying out.

[45]As for KG’s mother (Neli Rusinova) I am sure she did help her daughter out sometimes, with ironing and cleaning. Her daughter was very busy. This was informal and without remuneration. It was carried out by a mother to help her daughter. I note the exchange of messages between KG and respondent at page 138: KG: I told my mother she came to visit not to clean but she did not stop all day. Respondent: My mother was the same KG right I told her 100 times but she is like me having fun like that. If you see how the floor is shiny. Respondent: I know the mothers are always like that. Take a wine for her from us. Written Contract

[46]At the commencement of their engagement at the hotel the claimants were provided with a document called “Contract for Management”, a copy of which is at pages 454-457.

[47]The contract was provided to the claimants in English. No Bulgarian translation was provided. The evidence of the claimants (which I accept) is that they did not understand the contract, but they believed that they were required to sign a contract in order to engage in the work.

[48]The terms of the contract include the following (the respondent is referred to in the contract as the “owner”, the claimants as “manager”).

[49]Under the heading “Exclusivity of Services” it states: “Manager has the exclusive right to manage property for the duration of this agreement. Both parties agree that managers will perform all duties regarding day-to-day operation of the hotel including bookings, check-in/check-out, breakfast, housekeeping, maintenance, laundry, stock check and stock supply as well as all necessary lawful actions for running of the property not excluding handling complaints, forwarding them to the owner and keeping of high standards.”

[50]Under “Collection of Payments” the contract states: “Manager will collect from all guests payments on or before the due date and issue receipts. Manager will be responsible for keeping daily books of arrivals and expenses. Manager will be responsible for telephone bookings and owner will confirm all telephone bookings to guests by email. Owner will be responsible for collection of payments for pre-booked rooms paid online. Manager will be responsible for keeping day-to-day book for expenses of the hotel covered by the owner from the cashflow of the property. Manager will keep all receipts from expenses as well as invoices arriving by post for accounting department and owner in a safe place and orderly manner. Manager will provide a day-to-day accounting of all ingoing and outgoing guests and payments for owner’s records. Manager assumes responsibility of any payment.”

[51]Under the heading “Scope of Manager’s Expectations” there is a long list consistent with the above, but also including expectations as follows: “Co-ordinates and oversees repair services deemed necessary by owner. Pay for services with owner’s funds. Hires and supervises extra work regarding repairs, maintain and decoration of the property – with a written consent from owner.”

[52]Under the heading “Manager Monthly Salary” the contract states: “Owner agreed to pay manager under the following conditions: £1550 GBP – for every calendar month The amount for [KG] £775 GBP – paid into her account £775 GBP for [AA] paid into his account”

[53]Under the heading “Duration of the Management Agreement” the contract states: “The duration of this contract starts on 2 December 2018 and ends 2 December 2019. Managers will be self-employed. Managers will lose any monthly payment within the contract should they decide to terminate the contract before the expiration date or without any notice for termination. Manager will have the option to give a written notice four weeks, prior to expiry of this contract regarding its renewal for a future period. Manager will reside in the property – staff accommodation within the period of this contract and will not be responsible for any costs of the accommodation, gas, electrics, council tax. The owner is responsible for all the bill related to the property.”

[54]Under the heading “Rates” the contract states: “Manager shall not be responsible for updating rates and availability and guarantees that all amendments will be pre-authorised by owner. Manager will inform all guests and Booking.com to send official correspondence to the property email and owner will be responsible for confronting and confirming all official matters. Manager is given discretion to negotiate prices in the property at a minimum and maximum rate, but all bookings to be authorised and confirmed by email only from the owner.”

[55]A contract on the same terms was signed for each of the two years that the claimants lived and worked at the hotel. However, partway through the second year the contract was terminated (July 2019).

[56]Also contained in the bundle is a disciplinary policy. The claimants stated that they had never seen the disciplinary policy before. The respondent explained that it was a policy that he was required to provide to Blackpool Council as part of his approval/licence to operate the hotel.

[57]The respondent was asked whether he had received any advice in relation to the engagement of individuals to work at the hotel. The respondent confirmed that he was trading as a sole trader and that he had an accountant in relation to the business in the UK. He explained that everything was discussed with the accountant, including the contract referred to above. The respondent explained that the accountant warned him that there is a risk for a situation such as the respondent was facing in these Employment Tribunal proceedings to arise because “this is the biggest issue in the UK and a very complex matter”. The respondent explained that he decided with the accountant that engaging managers on a self-employed basis would be the best way to run the business when he was not in the UK. Payments received by the claimants

[58]It is apparent that the claimants were made in accordance with the contractual terms noted above. The payment picture is far from clear because sometimes they were paid by way of bank transfer and sometimes using the cash that was available at the hotel. In addition, sometimes the claimants were required to purchase items for the hotel and then would be repaid. Again, this was sometimes by bank transfer and sometimes by way of petty cash.

[59]The respondent’s position is that sometimes the claimant AA received additional payments because he undertook additional tasks. Evidence was given particularly about the task of installing a CCTV system into the hotel.

[60]I accept that there were occasions when AA would carry out tasks that were not within the terms and/or expectations of the management agreement. These would be repair and maintenance tasks. The management agreement required AA to oversee repair services being carried out as determined by the respondent (see para 51 above) but not carrying out repairs and maintenance himself. Additional payments were made to the claimant and the respondent would also pay for materials needed for the repair/maintenance job. On other occasions external contractors would be used. Control

[61]The respondent retained significant control. When asked about this he accepted that and noted that it was his business and any business owner would want to keep close control.

[62]The respondent required a regular report on financial matters, particularly from the claimant KG, who would provide the information the respondent require

[63]I also note that it was the respondent who made decisions about booking prices., days or weeks when the hotel would close. The claimants’ income did not change. They did not have the burden of risk when bookings were low or the benefit of a reward when the hotel was full. Tax

[64]The respondent did not make any deduction for income tax and national insurance before paying the claimants. The claimants did not declare the income received by them for tax purposes.

[65]The terms of the agreement are silent on tax except that they state that “managers will be self-employed” (see paragraph 53 above). The respondent wanted the arrangement to be regarded as a self-employed one following discussion with his accountant and a reluctance to be subject to obligations which come from an employment relationship. Declaring and deducting any income tax or national insurance liability would have been inconsistent with the intention for the arrangement to be a self-employed one.

[66]The claimants did not declare the income received from the respondent even though they completed and submitted tax return forms. Their previous work in the UK had all been remunerated via PAYE. D. The Law

[67]I am required to decide whether the claimants when engaged by the respondent met the test of “worker” under section 230(3) of the ERA, the WTR (regulation 2(1) and the NMWA (section 54(3), and if so whether they also met the test of “employee” under section 230(1) ERA.

[68]I also need to decide whether the claimant KG was an employee for the purposes of s83(2) Equality Act 2010.

[69]I note that the definition of worker for the purposes of the WTR and NMWA is the same as under s230(3) ERA. I set out section 230 in full below:(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’ (……….) 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 out by the individual; and any reference to a worker’s contract shall be construed accordingly.”

[70]As for s83 EQA, it is relevant to note that the definition of employment under this section is much wider than the definition at s230(1) ERA (above). The definition of “employment status under the EQA is broadly the same as the definition of worker status under the ERA; what s83 requires is a contract personally to do work. See for example the Supreme Court decision in Jivraj v. Hashwani

(2011) ICR 1004

, a case decided under discrimination legislation which pre- existed the Equality Act 2010 but was on very similar terms and which effectively noted the same requirements as for “worker” status under the ERA. Worker status (and employment status under the EQA)

[71]Bates van Winkelhof v Clyde & Co and another

(2014) ICR 730

. In this case the Supreme Court decided that an equity partner in an LLP could be a worker under section 230(3)(b) of the ERA for the purposes of bringing a protected disclosure detriment treatment claim. In her Judgment, Lady Hale noted “there can be no substitute for applying the words of the statue in every case”. The statute requires Tribunals to consider and decide on three elements:(1) The existence of a contract between individual and the other party;

(2) Under which the individual undertakes to perform work personally for that other party (a requirement for personal services);

(3) That the other party must not be in the nature of a client or customer of the individual or business undertaking of the individual.

[72]I also note the judgment of the Supreme Court in Pimlico Plumbers v Smith (

2018 UKSC 29

) (“Pimlico Plumbers”) particularly in relation to the requirement for personal service (paragraphs 20 – 24 of the Judgment) and the issue as to whether the respondent was a client or customer of the claimants (paragraphs 35 to 49) I have also considered the judgment in Community Dental Services Limited v Sultan-Darmon (2010 IRLR 1024) (“Sulton-Darmon”) relevant to the issue of personal service.

[73]I also note the Court of Appeal decision in Pimlico Plumbers (this is at

2017 IRLR 323

) and particularly paragraph 84 of the Judgment of Sir Terence Etherton MR: - “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 service 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 on 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.

[74]In reaching my decision I took account of the guiding principles set out by Sir Terence Etherton MR, although recognising that it was necessary for me to consider and reach my decision on the findings of fact that I have made and not be compelled to shoehorn the facts into any of the five example scenarios provided. The wording of the written contracts

[75]In accordance with the Supreme Court decision in Autoclenz v Belcher

2011 ICR 1157

when deciding whether or not an individual has worker status, a Tribunal needs to consider what the true agreement between the parties was. E. Conclusions Were the claimants workers of the respondent? I have considered and applied the statutory test as noted above. (1) The existence of contract between claimant and respondent

[76]It is not disputed that there was a contractual relationship between each of the claimants and the respondent. (2) The requirement for personal service

[77]Personal service was required. The claimants applied for the work via an advertisement; they were engaged personally. Whilst arrangements were occasionally made for someone else to cover the claimants’ duties at the hotel all these arrangements did was allow the claimants to take their holidays or a break. Given the nature of the claimants’ duties, unless the Hotel was closed, someone had to step in to carry out duties when the claimants were not present. Legislation requires rest periods and holidays. From the evidence provided, the only examples of so called “substitution” provided was where someone carried out duties at the hotel when the claimants had time away from the Hotel.

[78]Such arrangements are not in the nature of substitution. If that is incorrect, the extent of control that the respondent maintained over the substitution arrangements did not make those arrangements inconsistent with the requirement for personal service.

[79]I also accept that each claimant could cover for the other. There were times when both claimants were required and times when they were not. However, such arrangements are managing a workload within a small workforce – in this case a team of 2. It does not indicate a lack of personal service. (3) The respondent was not in the nature of a client or customer of the claimants

[80]The respondent in this case was not a client or customer of the claimants and, in fairness to the respondent, he did not try to persuade me that he was.

[81]Having considered all of the evidence provided I am clear that these claimants were engaged by the respondent as hotel managers and to carry out the work personally. It was the claimants who were expected to be at the hotel and undertake the various tasks that the respondent required them to do. The claimants were clearly subordinate to the respondent and they worked under his control and direction even though he was frequently out of the country whether in Bulgaria or the Dominican Republic or elsewhere.

[82]The second occasion was a visit to Bulgaria in June 2019. This was for 8 days and was, in part at least, to enable both to visit the dentist.

[83]The respondent did not provide salary/pay for either holiday except that he paid £300 to KG in December 2018 as a bonus payment to both claimants. Final Payment

[84]The claimants received their monthly payment of £1550 in June 2019 (according to the terms of the contract at page 170 this payment is for a calendar month). However, they received no payment for July 2019 even though they worked for the first 8 days of July 2019. G. Submissions

[85]Ms Urquhart for the respondent provided lengthy and helpful oral submissions. We do not try to repeat all these in this judgment. Her submissions (and those from KG on behalf of both claimants) assisted us in our fact finding and conclusions as well as the law applicable.

[86]We note the following highlights particularly about those claims categorised by Ms Urquhart as the money claims:-a. That it is for the claimants to prove their claims and there is a lack of documentation on both sides

b. Sometimes the claimants were paid in cash and sometimes by bank transfers which adds to the difficulty of providing a complete picture

c. The respondent did not maintain paperwork and provide payslips as he might had he regarded himself as an employer; he had decided (wrongly) that the claimants were self employed

d. The Tribunal is required to do its best on the evidence available to reach its decision and decide whose evidence it prefers but the claimant’s case, at its highest, is not believable.

e. That if we decide there was a breach of the WTR then we have to make an award that is just and equitable and when doing so, should take in to account the generosity shown towards the claimants in providing a holiday to the Dominican Republic. H. The Law Meaning of disability.

[87]Section 6 Equality Act 2010 (EQA) provides as follows:- (1) A person (P) has a disability if- (a) P has a physical or mental impairment, and (b) The impairment has a substantial and long-term adverse effect on P’s ability to carry out normal day to day activities.

[88]Section 212(1) of the EQA defines “substantial” as meaning “more than minor or trivial.”

[89]We also considered:-a. part one of schedule one to the EQA regarding the definition of disability.

b. The Secretary of State’s Guidance on matters to be taken into account in determining questions relating to the definition of disability. (Guidance) particularly under the heading Environmental Effects at D20

c. The EHRC Employment Code

[90]We note from the materials above and from relevant case law:-a. That we are to apply this definition at around the time that the alleged discrimination took place; Cruickshank v. VAW Motorcast Limited

[2002] ICR 729

; (which I have referred to as the relevant time).

b. That we should apply a sequential decision-making approach to the test (see for example J v. DLA Piper [2010] WL 2131720 (J v. DLA), addressing the following in order

• did the claimant have a mental and/or physical impairment? (the ‘impairment condition’)

• did the impairment affect the claimant’s ability to carry out normal daytoday activities? (the ‘adverse effect condition’)

• was the adverse condition substantial? (the ‘substantial condition’), and

• was the adverse condition long term? (the ‘long-term condition’).

c. The term “impairment” had to be given its ordinary and natural meaning (McNicol v. Balfour Beatty Rail Maintenance Limited [2002]EWCA Civ 1074).

d. The EQA does not define what is meant by “normal day to day activities.” Section D of the Guidance provides guidance on this term. The appendix to the Guidance provides “illustrative and non-exhaustive” lists of factors which it would and would not be reasonable to regard as having a substantial and adverse effect on normal day to day activities.

[91]Various provisions in the EQA provide that an employer is not subject to the relevant duties/liabilities if it did not know and could not reasonably be expected to know that a claimant is disabled or is likely to be placed at a particular disadvantage because of the disability. Schedule 8 EQA at para 20(1) is relevant to this case (the complaint that the respondent failed in its duty to make reasonable adjustments). Protection of Wages

[92]Part II of the Employment Rights Act 1996 (ERA) provides considerable protection for the wages payable to workers. Section 13(1) ERA provides that “An employer shall not make a deduction of wages of a worker employed by him.” The exceptions are where the deduction is authorised by contract or statute or where the worker has signified his agreement in writing. National Minimum Wage legislation

[93]This is in the National Minimum Wages Act 1998 and the National Minimum Wage Regulations 2015.

[94]The NMW comprises various rates which are set annually. We need to consider whether these rates were applied. We also need to take in to account that the claimants were provided with accommodation at the Hotel. The NMW legislation provides that account should be taken for this, but at set rates.

[95]As for as this case is concerned,a. the relevant minimum wage rates are as follows:- i.Up to 31 March 2018 - £7.38 per hour (both claimants being under 25 years old). ii. April 2018 onwards - £7.70 per hour.

b. The relevant Accommodation offset rate i.Upto 31 March 2018 - 6.40 per day ( or £44.80 per week) ii. April 2018 onwards -£7.00 per day (or £49 per week).

[96]A worker who has not been paid the NMW is deemed to be contractually entitled to the difference and can bring a claim under the legislation which protects wages (Part II ERA, noted above) in order to recover the difference and therefore individually enforce the right to NMW. Working Time Regulations 1998 (WTR)

[97]Section 4 of the WTR provides for a maximum working week of 48 hours, but subject to some exceptions. Ms Urquhart rightly noted that the WTR do not provide any rights of individuals to present a complaint to the employment tribunals as far as this section is concerned. Regulation 30 lists those complaints under the WTR which come within the Tribunal’s jurisdiction and breach of section 4 is not one of them.

[98]Daily rest. Section 10 (1) WTR provides as follows:- “A worker is entitled to a rest period of not less than eleven consecutive hours in each 24-hour period during which he works for his employer……”

[99]Weekly rest. Section 11 WTR provides as follows:- “11(1) subject to paragraph 2 a worker is entitled to an interrupted rest period of not less than 24 hours in each 7-day period during which he works for his employer.

(2) If his employer so determines a worker shall be entitled to eithera. Two interrupted rest periods each of not less than 24 hours in each 14-day period during which he works for his employer; or b. One uninterrupted rest period of not less than 48 hours in each such 14-day period, in place of the entitlement provided for in paragraph 1.

[100]There are exceptions which apply to these entitlements to rest periods. Potentially relevant ones here are:-a. Regulation 21(d) – foreseeable surge in activity in relation to tourism

b. Regulation 21(e)(i) where workers activities are affected by an occurrence due to unusual and unforeseen circumstances beyond the employer’s control

c. Regulation 21( e)(ii) where workers activities are affected by exceptional events the consequences of which could not have been avoided despite the exercise of all due care by the employer.

[101]The time limits applicable for complaints about a failure to provide rest periods, are set out at Regulation 30 WTR. Claims have to be brought within 3 months of the date on which it was alleged that the exercise of the right should have been permitted, subject to extensions to take in to account ACAS Early conciliation requirements. Unlike provisions in other legislation (for example unlawful deductions of wages, where time limits recognise that there may have been a series of deductions) there is no reference in regulation 30 to time limits taking in to account the possibility of a series of refusals or a continuing course of conduct on the part of an employer.

[102]The exception is at regulation 30(2) of the WTR – where an employment Tribunal can consider a complaint which is presented within such further period that is considers reasonable, in a case where it is satisfied that it was not reasonably practicable for the complaint to have been presented in time. We note here that we did not hear any arguments (from either party) about this provision.

[103]Where a Tribunal decides that a complaint is well founded, it shall make a declaration to that effect and may also make an award of compensation of such amount as it considers to be just and equitable (Regulations 30(3) and (4) WTR).

[104]Annual Leave. Regulation 13 WTR provides that a worker is entitled to 4 weeks annual leave in each leave year.

[105]Regulation 13A provides for additional annual leave of 1.6 weeks.

[106]Regulation 13A(3) limits total annual leave entitlement under WTR to 28 days.

[107]A leave year, for the purposes of calculating annual leave, begins on the date on which the worker’s employment began and each subsequent anniversary of that date.

[108]One issue that we were required to determine was whether paid holiday entitlement should include the entitlement for the previous holiday year or limited to the holiday year in which the claimants’ employment terminated. Applying regulation 13(3) WTR (and in the absence of agreement to the contrary) the year, for the purposes of calculating entitlement to annual leave, begins on the anniversary of the start of employment. The most recent holiday year would have started at the end of February 2019 and ended on the dismissal date (7 July 2019). .

[109]The recent judgment in Pimlico Plumbers v Smith

[2021] IRLR 678

(Pimlico Plumbers) and particularly the appendix to the judgment sets out the amended parts of the reinterpreted regulation 13 of the Working Time Regulations. Having regard to the added paragraph 13(16), we need to consider whether the claimants were unable or unwilling to take some or all of the entitlement to paid leave in the previous holiday year because of the employer’s refusal to remunerate the worker in respect of that leave. I. Conclusions Was the first claimant a disabled person in accordance with the Equality Act 2010 (“EqA”) at all relevant times because of a skin condition?

[110]We do not find on the evidence provided, that the claimant KG was disabled.

[111]Applying the sequential decision-making process set out in J v. DLA Pipera. The claimant had an impairment – the Condition.

b. That impairment did not impact KGs ability to carry out normal day to day activities or, if it did, that impact was not substantial.

[112]We took account of the fact that by the time of the incident involving the carpet cleaning product, she had already worked in her full-time role at the Hotel and engaged in significant amounts of cleaning on a daily basis. She had been able to do this without complaint and without the need for medical intervention. It was only following the use of a particular carpet cleaning product that her hands became blistered by reason of the underlying condition.

[113]Based on the extent of the evidence available we did not find that the condition had any substantial impairment on KGs ability to carry out day to day activities. The particular activity of cleaning the carpet with a specialist carpet cleaning product by hand, without gloved protection, did not amount to a day to day activity. Cleaning certainly is a day to day activity and her ability to carry out cleaning was generally not impaired.

[114]Further, we do not find that the respondent had knowledge of the claimant’s impairment prior to the incident.

[115]As such we do not need to go on to consider the issues under the heading “reasonable adjustments.” Unauthorised Deductions Did the respondent make unauthorised deductions from the claimants’ wages in accordance with section 13 Employment Rights Act 1996 (“ERA”) by failing to pay the claimants for the final 13 days that they undertook work for the respondent?

[116]We find that they did. Our findings are in 2 parts:- Part One. Failure to pay National Minimum Wage in accordance with implied contractual term.

[117]Our calculations are as followsa. 12-month period 1 March 2018- 28 February 2019. 324 days were worked in this period (less 30 days holiday and less 11 days rest days – I per month other than December 2018). We have applied a daily average percentage of 8.9 hours = 2883.60 hours. The minimum wage for this period was £7.38. Therefore, pay of £21280.96 was due. Subtract from this the accommodation amount of £7 per day. 7 x 365 = £2555 Then subtract amount paid (no pay during holiday in December 2018 other than £300 bonus - £150 per claimant) 11 x 775 + 150 = £8675 Total therefore 21280.96 – 2555 – 8675 = £10,050.

b. One month – March 2019. Each claimant worked on average 8.9 hours per day during this period. The amount owing therefore is as follows:- 31-1 day rest = 30 days worked. 30 x 8.9= 267 hours worked. Amount owing as wages. 267 x 7.38 = £1970.46 Subtract £7 per day accommodation 31 x 7 = £217. Subtract amount paid £775. Amount owing therefore = £978.

c. 1 April 2019 – 7 July 2019 Each claimant worked on average 8.9 hours per day during this period. There are 98 days. The claimant had 1 day per month rest period and in addition 8 days holiday (22- 29 June 2019). Total days worked therefore = 98-11 = 87 days. 8.9 x 87 = 774.30 hours worked. Amount owing as wages 774.30 x. 7.70 = £5962.11 Subtract 7.55 per day accommodation = 98x 7.55 = 739.90 Subtract amount paid 3 x 775 = 2325 Amount owing therefore 5962.11 – 739.90 – 2325 = £2897.21 Adding the amounts at a,b and c; each claimant is therefore owed (by way of unpaid wages) £13,925.21 Part 2. Unpaid wages for the period 1-7 July 2019. 8 days pay @ 8.9 hours per day @ 7.70 per hour = £548.24 WTR- Weekly Working Time Did the claimants’ working time exceed an average of 48 hours for each seven days, contrary to regulation 4 Working Time Regulations?

[118]We agree with Ms Urquhart’s submissions. This is not a complaint that falls within the jurisdiction of Employment Tribunals. WTR - Daily Rest Did the claimants receive a rest period of not less than 11 consecutive hours in each 24-hour period in accordance with regulation 10 Working Time Regulations?

[119]We are satisfied, on the facts that the claimants were able to manage their working days so that at least one of them could be provided with a rest period and, unless there was a disturbance from a hotel guest after 8pm, both could. Such disturbances may well fall within one of the exceptions noted above and that claimant who had been disturbed could gain some compensatory rest over the following few days. WTR - Weekly Rest Period Did the claimants receive an uninterrupted rest period of not less than 24 hours in each seven-day period during which they worked for the respondent in accordance with regulation 11 Working Time Regulations?

[120]They did not. The respondent had not put in place any mechanism to provide the claimants with an uninterrupted 24 hours break every 7 days (or the alternative of an uninterrupted 48 hour break every 14 days.) The claimants only received one day off per month. This was a breach of the WTR.

[121]As noted above, whilst the claimants did not receive regular weekly rest breaks at any stage of their employment with the respondent, the time limits applicable mean that a remedy can only be provided for a limited period. Further, that period includes June 2019, when the claimants had a period of unpaid annual leave.

[122]Taking all this in to account we make an award of compensation under regulation 30 (3) WTR and (4) of £300 per claimant. WTR - Entitlement to Annual Leave Did the claimants receive annual leave in accordance with regulations 13 and 13A Working Time Regulations?

[123]Whilst the claimants did have time off in December 2018 and June 2019, it was not paid time off.

[124]The claimants received a bonus payment of £300 in December 2018. This was paid into the account of KG and in respect of which account has already been made in the calculation of unlawful deductions. We decided that was the appropriate stage to factor in the calculation as it was classified as a bonus – indicating that it was a payment, a reward, for work already done.

[125]The claimants were provided with time off but the respondent did not pay for the time off. We are satisfied that their circumstances are such that they should receive the amount of paid time off for the whole of the period they spent working for the respondent. A total of 38 days holiday accrued during this period.

[126]We are satisfied that the claimants’ circumstances do fall within regulation 13(16) as written in to the WTR by the EAT in Pimlico Plumbers. They were unable to take paid leave because the respondent did not recognise their entitlement to be paid during leave. They were required therefore to take unpaid leave. On that basis, the claimants are entitled to receive payment for accrued untaken holidays for the period from end February 2018 to the date of termination, being 7 July 2019.

[127]The claimants worked on average 8.9 hours per day. Of these 38 days 30.33 accrued when NMW was £7.38 per hour. = £1992.13

[128]The remaining 7.66 days accrued when NMW was £7.70 per hour = £525

[129]A total amount owing therefore to each claimant of £2517.03 National Minimum Wage Act 1998 (“NMWA”) Did the claimants receive pay in accordance with the terms of the NMWA and National Minimum Wage Regulations 2015? The claimants’ claim they were each paid £775 - £825 per month. They claim they worked 15 hours a day, every day except for one day a month. Assuming a 30-day month therefore they claim they worked for 435 hours per month. Assuming a monthly pay of £800, they claim they were paid £1.84 per hour. For the period April 2019 until date of termination the NMW was £7.70 per hour (where the worker is aged 21-24) and £8.21 per hour (25 years and over) For the period April 2018 to April 2019 the NMW was £7.38 per hour (where the worker is aged 21-24) and £7.83 per hour (25 years and over)

[130]The claimants were not paid in accordance with NMW Legislation. See our findings under unlawful deductions. Employment Judge Leach Date: 10 June 2022