Mr W Russell v UK Direct Business Solutions Ltd: 2501699/2023
EMPLOYMENT TRIBUNALS
Case No 2501699/2023
Between
Mr W RussellClaimantUK Direct Business Solutions LtdRespondent
Before
Employment Judge McDonaldDate 22 May 2025
JUDGMENT
[1]The complaint that the respondent discriminated against the claimant because of sexual orientation by requiring him to provide ID when he made a data subject access request (allegation LFT3) is struck out under Employment Tribunal Procedure Rule 38(1)(a) because it has no reasonable prospect of success.[2]The complaint that the respondent made an unauthorised deduction from the claimant’s wages by failing to pay him commission (including legacy commission) is struck out under Employment Tribunal Procedure Rule 38(1)(a) because it has no reasonable prospect of success.
REASONS
[1]On 6 August 2024 I conducted a public preliminary hearing remotely by CVP. At that hearing I heard the respondent’s application that the Tribunal strike out or make deposit orders in relation to some or all of the complaints brought by the claimant against it. I considered the matter in chambers on 20 August 2024.[2]I have set out my decision on the strike out application in this Judgment. I have set out my decision on the deposit order applications in the Deposit Order of today’s date. The case management decisions I have made are recorded in the case management orders of today’s date. The 3 documents should be read together.[3]I apologise to the parties that my absence from the Tribunal for various reasons has led to a delay in finalising and sending them these documents.[4]References in this judgment to page numbers are to pages in the preliminary hearing bundle. The claimant’s claim and its procedural history[5]The claimant’s claim arises from his employment by the respondent as a Business Development Executive from 1 June (the respondent says 1 July) 2021 until his summary dismissal on 6 April 2023.[6]The respondent is an energy broker. It says the claimant was dismissed for gross misconduct, namely intentionally withholding information regarding a contract involving a potential client, NWL (“the NWL contract”). It says that the claimant knew that NWL was tied in to an existing energy supply contract and so could not have agreed to change supplier. It says that the claimant withheld that information so he could benefit from the commission payment he would receive from completion of the NWL contract. The claimant’s case was that it was not his role to verify the contractual position of NWL and that others involved in the contract had not been suspended and dismissed as he had been. The claimant identifies as gay and one of his complaints is that he was treated differently because of that. He also said that he had not been paid all commission which he was due.[7]The claimant filed his Tribunal claim on the 12 July 2023 following a period of ACAS Early Conciliation from 9 May 2023 to 14 June 2023. On 14 November 2023 the respondent made a strike out/deposit order application.[8]Employment Judge Horne held a case management preliminary hearing on the 19 November 2023. In summary, he identified the complaints brought by the claimant as:a. Unfair dismissal, contrary to section 94 of the Employment Rights Act 1996 (“the ERA”);b. Direct Discrimination because of sexual orientation as defined by section 13 of the Equality Act 2010 and in contravention of section 39(2) of the Equality Act 2010;c. Unauthorised deduction from wages, contrary to section 13 of ERA; andd. A claim for damages for breach of contract (wrongful dismissal).[9]Employment Judge Horne listed a public preliminary hearing for the 10 May 2024 to decide the strike out and deposit order applications and to make case management orders including listing a final hearing. He also issued a notice under rule 27 of the Employment Tribunal Rules 2013 proposing to dismiss the claimant’s unfair dismissal complaint as having no reasonable prospect of success because the claimant did not have the 2 years’ service required to bring such a claim.[10]Employment Judge Horne had ordered the preparation of a bundle of documents for the preliminary hearing on 10 May 2024 which he ordered (case management order 12) must include “copies of all documents on which the parties wish to rely at the final hearing”.[11]Employment Judge Horne also made a specific case management order (Order 7 at p.48) directing that if the claimant wanted the Tribunal to take into account, when deciding on prospects of success, anything said during a conversation that he had audio-recorded, he must by 27 March 2024 deliver to the respondent the complete digital file of the recording of the whole conversation; and a transcript of the parts of the conversation that he believes will support his claim. He made an equivalent order (order 7 at p.48), with the same deadline, in relation to any WhatsApp or text message the claimant relied on.[12]On 9 May 2024 the respondent made an application for costs requesting that it be dealt with at the hearing on 10 May 2024 once the strike out application had been considered.[13]The preliminary hearing on 10 May 2024 took place before Employment Judge Eeley. At that hearing the claimant confirmed he was no longer pursuing the complaint of unfair dismissal. Employment Judge Eeley dismissed that complaint by a judgment dated 10 May 2024 sent to the parties on 18 May 2024.[14]The claimant at the start of the Eeley hearing referred to a number of documents which he wanted to add to the preliminary hearing bundle. The respondent’s position was that the documents were not relevant to the issues to be decided at the preliminary hearing.[15]Employment Judge Eeley decided it was not possible to decide the strike out/deposit order applications in the time allowed and in the absence of documents on which the claimant sought to rely to resist the strike out/deposit applications. As a result, Employment Judge Eeley listed the hearing on 6 August 2024 with a time estimate of one day. She identified the issues to be decided (subject always to the discretion of the Tribunal not to deal with any issues if in accordance with the overriding objective not to do so) as:a. The respondent’s existing application for strike out of some or all of the legal complaints in the case.b. The respondent’s existing application for a deposit order in respect of some or all of the legal complaints in the case.c. Further case management orders to prepare the case for a final hearing.d. The respondent’s costs application, if appropriate.[16]At the start of the 6 August 2024 hearing Miss Twomey confirmed that the respondent’s strike out application related to the complaints of direct sexual orientation and unauthorised deduction from wages, but not the wrongful dismissal complaint. The respondent applied for deposit orders in relation to all the complaints including the wrongful dismissal complaint. Relevant Law Striking out
Relevant Law
[17]The strike out application was made and heard under the Employment Tribunal Rules of Procedure 2013. From 6 January 2025, those rules were superseded by the Employment Tribunal Procedure Rules 2024. I am making my decision under those 2024 Rules. The power to strike out in rule 37 of the 2013 Rules is now in rule 38 of the 2024 Rules. So far as relevant to this claim it provides that:(1) The Tribunal may, on its own initiative or on the application of a party, strike out all or part of a claim, response or reply on any of the following grounds— (a) that it is scandalous or vexatious or has no reasonable prospect of success;….(2) A claim, response or reply may not be struck out unless the party advancing it has been given a reasonable opportunity to make representations, either in writing or, if requested by the party, at a hearing.[18]There are slight differences in wording between rule 37 of the 2013 Rules and rule 38 of the 2024 Rules but there is no suggestion that those differences change the legal test I need to apply in deciding whether to strike out all or any part of the claim. That means the caselaw relating to rule 37 of the 2013 Rules still applies.[19]That caselaw gives guidance on the exercise of the power to strike out. The core components of that guidance were summarised by HHJ Taylor at para 4 of the Employment Appeal Tribunal’s judgment in Xie v E'Quipe Japan Ltd [2024] EAT 176:a. “The Employment Tribunal Rules provide a discretion to strike out a claim if it has no reasonable prospect of successb. Strike out is a draconian step to be taken only in clearcut casesc. There is a public interest in discrimination cases being heard on the meritsd. Care should be taken when an application for strike out is made against a litigant in persone. That said, there is not an absolute prohibition on strike out in discrimination cases, particularly if the claim is contrary to undisputed documentary evidencef. Where there is a core of disputed fact strike out is generally inappropriateg. When assessing strike out the case of the party against whom the application is made should generally be taken at its highest”[20]He went on to explain (at paras 6 and 7 of Xie) that:a. “A core of disputed fact can include the reason why a person took a decision: Ezsias v North Glamorgan NHS Trust [2007] EWCA Civ 330, [2007] ICR 1126 and Zeb v Xerox (UK) Ltd. UKEAT/0091/15/DM at paragraph 20. That is why strike out is generally inappropriate in a case that turns on the mental processes of an alleged discriminator and/or a person who took a decision, such as a decision to dismiss”.b. “Taking a case at its highest generally requires an assumption that the claimant will establish the facts from which it is contended that discrimination should be inferred: Romanowska v Aspirations Care Ltd UKEAT/0015/14/SM and Mechkarov”.[21]In Xie, the EAT held that meant (para 19) that the employment tribunal in that case was required to assume that the claimant would establish the facts from which it was asserted that the tribunal should infer discrimination (in that case an anti-Chinese culture). The tribunal was not required to assume that the inference of an anti-Chinese culture would be established.[22]The courts have repeatedly stressed the need for caution before striking out a claim on the basis it has no reasonable prospect of success. That applies particularly to discrimination claims. Issues relating to discrimination should, as a general rule, be decided only after hearing the evidence. The tribunal can then base its decision on its findings of fact rather than on assumptions as to what the claimant may be able to establish if given an opportunity to lead evidence (Anyanwu and anor v South Bank Student Union and anor 2001 ICR 391, HL).[23]In Chandhok and another v Tirkey (Equality and Human Rights Commission intervening) [2015] I.C.R. 527, the then President of the EAT. said that what was said in Anyanwu stopped short of a blanket ban on strikeout applications succeeding in discrimination claims. There may still be occasions when a claim can properly be struck out. One example he gave was where, on the case as pleaded, there is really no more than an assertion of a difference of treatment and a difference of protected characteristic. The general approach remains that the exercise of a discretion to strike-out a claim should be sparing and cautious. That general position is not affected by hearing some evidence unless a tribunal can be confident that no further evidence advanced at a later hearing, which is within the scope of the issues raised by the pleadings, would affect the decision.[24]The Tribunal must apply a two-stage test in deciding whether to strike out a claim. If it decides that a claim has no reasonable prospect of success it must then decide whether it is just to exercise its discretion consider to strike out the claim or whether, for example, a lesser sanction would suffice (HM Prison Service v Dolby [2003] IRLR 694, EAT). Direct Sexual Orientation Discrimination[25]Section 39(2)(d) of the Equality Act 2010 prohibits discrimination against an employee by subjecting them to a detriment. The Act provides for a shifting burden of proof. Section 136 so far as material provides as follows: “(2) If there are facts from which the Court could decide in the absence of any other explanation that a person (A) contravened the provision concerned, the Court must hold that the contravention occurred. (3) But subsection (2) does not apply if A shows that A did not contravene the provision.”[26]This means that it is for a claimant to establish facts from which the Tribunal can reasonably conclude that there has been a contravention of the Equality Act 2010. If the claimant establishes those facts, the burden shifts to the respondent to show that there has been no contravention by, for example, identifying a different reason for the treatment.[27]To discharge the burden at the first stage, there must be something more than a difference in the relevant protected characteristic and a difference in treatment; see Madarassy v Nomura International plc [2007] ICR 867, CA. That said, the “something more” required at the first stage need not be a great deal; see Deman v EHRC [2010] EWCA Civ 1279.[28]A finding that an employer has behaved unreasonably, or treated an employee badly, will not, however, be sufficient, of itself, to cause the burden of proof to shift; Glasgow City Council v Zafar [1998] ICR 120.[29]The definition of direct discrimination appears in section 13 of the 2010 act and so far as material reads as follows: “(1) A person(a) (A) discriminates against another(b) (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others”.[30]The concept of treating someone “less favourably” inherently requires some form of comparison, and section 23(1) provides that: “On a comparison of cases for the purposes of section 13 … there must be no material differences between the circumstances relating to each case”.[31]It is well established that where the treatment of which the claimant complains is not overtly because of a protected characteristic, such as sexual orientation, the key question is the “reason why” the decision or action of the respondent was taken. Unauthorised Deductions from Wages[32]In relation to a claim for deduction from wages, s.13(1) of the ERA says: "(1) An employer shall not make a deduction from the wages of a worker employed by him unless-(a) the deduction is required or authorised to be made by virtue of a statutory provision of a relevant provision of the worker’s contract, or(b) the worker has previously signified in writing his agreement or consent to the making of the deduction.”[33]S.27(1) of ERA says: "(1) In this Part 'wages', in relation to a worker, means any sums payable to the worker in connection with his employment, including- (a) Any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise”[34]S.13(3) of ERA says: "Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion."[35]In New Century Cleaning Co Ltd v Church 2000 IRLR 27, CA the majority of the Court of Appeal held that a worker would have to show an actual legal, although not necessarily contractual, entitlement to the payment in question in order for it to fall within the definition of “wages”.[36]In Horkulak v Cantor Fitzgerald International 2005 ICR 402, CA, the Court of Appeal held that where under the terms of a contract one party was empowered to exercise a discretion the court would read into the contract an implied term that there would be a genuine and rational exercise of that discretion. Horkulak concerned an express provision relating to payment of a discretionary bonus contained in a written contract of employment. In the Court of Appeal’s view that meant that the provision “was necessarily to be read as intended to have some contractual content” and contrasted that with “a mere declaration of the employer’s right to pay a bonus if he wishes, a right which he enjoys regardless of contract” (para 46 of Horkulak). The hearing on 6 August 2024 The preliminary hearing bundle and other documents[37]In her case management orders dated 10 May 2024 Employment Judge Eeley gave directions for preparation of an updated bundle for the 6 August 2024 preliminary hearing. The claimant was to send the respondent by 24 May 2024 copies of any further documents which he proposed to refer to at the hearing. The respondent was to update the bundle to include those further documents and send it to the claimant by 14 June 2024 with a copy being forwarded to the Tribunal by 30 July 2024.[38]The preliminary hearing bundle before me at the hearing was 213 pages long. It did not include the respondent’s costs application dated 9 May and supporting documents. The claimant said he had not received that application although the respondent’s letter of application stated that it had been copied to him. After an adjournment the claimant confirmed he had received the costs application.[39]The claimant said that the respondent had failed to provide disclosure of documents which he had requested. The claimant had written to the respondent promptly after the 10 May 2024 hearing to ask for disclosure of documentation showing the involvement of a former colleague, Ben Murphy, in processing information about the NWL Contract. He had also asked for detailed information about the commission paid to Mr Murphy and to another colleague, Michael Birch (page 203-213 of the Bundle). The claimant said that information was relevant to show he had been treated differently to Mr Murphy in relation to being disciplined and in relation to both named colleagues in having commission “clawed back” by the respondent. The respondent had provided email confirmation that Mr Birch was not involved in the NWL Contract (pp.198- 200). In relation to Mr Murphy, it provided an email and a heavily redacted document which it said showed that there were no clawback of commission from Mr Murphy in relation to the NWL Contract because he had never been paid commission relating to that sale.[40]I considered whether I could proceed to hear the strike out/deposit applications in the absence of the disclosure which the claimant said was still outstanding. The onus is on the respondent at a strike out/deposit application to produce evidence to substantiate its case that there is no or (in the case of a deposit order) little reasonable prospect of success. I accepted Miss Twomey’s submission that in deciding those applications I had to take the claimant’s case at its highest. If the claimant asserted there was evidence which supported aspects of his case then, in the absence of documents before me which were plainly inconsistent with that assertion, I should accept it. In those circumstances I decided it was appropriate to hear the application based on the documents before me rather than further delaying matters by postponing the hearing. Where the claimant asserted there were documents which supported his case but were not in the bundle I have assumed that is the case.[41]The respondent provided a copy of the reserved judgment of Employment Judge Morris in the employment tribunal case of Mrs Z Spence v the respondent (case no.2502335/2022) (“the Spence Judgment”). Miss Twomey accepted that it was not binding on me. However, she submitted that Employment Judge Morris’s conclusion that the complaints of non-payment of bonus and commission in that case had no reasonable prospects of success were relevant. That was because his decision turned on interpretation of contractual and commission scheme provisions identical to those relied on by the claimant in his unauthorised deduction complaint. Confirmation of the claimant’s complaints[42]The Bundle included a document called “ET1 claim-amended” (pp.73-83). It was undated. In answer to my question, the claimant confirmed there was no application to amend his claim. My decisions in this judgment and that in the Deposit Order application are based on the claimant’s complaints as set out in the claim form and clarified by Employment Judge Horne at the first preliminary hearing in November 2023. The strike out application[43]I deal below with the strike out applications in relation to the direct sexual orientation discrimination complaint and the unauthorised deduction complaint. As I have said, the respondent did not apply to strike out the wrongful dismissal complaint. The direct sexual orientation discrimination complaint[44]As clarified by Employment Judge Horne, the claimant’s direct discrimination complaint is that he was subject to five acts of less favourable treatment:a. LFT1 - The claimant was suspended. Ben Murphy and Michael Birch were not suspended. Mr Murphy was responsible for getting the relevant information and verifying it. Mr Birch had the same commission structure as the claimant had.b. LFT2 - The claimant was dismissed. Mr Murphy and Mr Birch were not dismissed.c. LFT3 - The claimant made a data subject access request (SAR). He was asked to provide identification when it should have been obvious who had made the request. Mr Douglas was not asked for identification.d. LFT4 - The respondent sent the claimant a letter before action about alleged breaches of restrictive covenants. Ben Murphy did not receive such a letter.e. LFT5 - The respondent sought to claw back approximately £20,000 of commission from the claimant. It did not make such an attempt for Mr Birch or Mr Murphy.[45]The respondent accepts that it suspended then dismissed the claimant. It also accepts that the claimant was asked to provide identification when he made a DSAR request. It accepts that it wrote to the claimant about breaches of restrictive covenants. It denied that the claimant was entitled to the commission he claims.[46]In summary, for each complaint to succeed the Tribunal at the final hearing will need to be satisfied in relation to each of LFT1-LFT5 that:a. the claimant was treated less favourably than his named comparator:b. that the circumstances of the claimant and his named comparator were the same or not materially differentc. that the reason the claimant was treated less favourably than his comparator was because the claimant is gay.[47]The law is clear that the burden is initially on the claimant to prove facts from which the Tribunal at the final hearing could conclude that the treatment was because he is gay. A difference in treatment and a difference in sexual orientation is not enough in itself to pass that burden. The respondent’s submissions[48]The basis for the respondent’s strike-out application was set out in the respondent's letter of the 14th of November 2023 and expanded on by Miss Twomey in her oral submissions.[49]In relation to the discrimination complaints, the respondent said that there was no reasonable prospect of the claimant establishing that any treatment he was subjected to was because of his sexual orientation. It said his case relied on arguing that any less favourable treatment must be because of his sexual orientation because that was the “differentiating factor” between him and his named comparators.[50]It submitted that the case law (specifically Madarassy) makes it clear that that “bare difference” in treatment and protected characteristic is not enough to pass the burden of proof. There must be “something else”, some other facts from which the Tribunal can infer that the less favourable treatment was because of sexual orientation.[51]Miss Twomey pointed out that the claimant had told Employment Judge Horne that he intended to rely on WhatsApp messages in which people made comments about his sexuality as evidence to establish facts from which the Tribunal could infer a discriminatory reason for his treatment. Employment Judge Horne had ordered the claimant to provide copies of any such WhatsApp messages to the respondent by 27 March 2024. He had failed to do so. She submitted that gave rise to 2 possible conclusions. The first was that the evidence the claimant said he relied on did not exist. The second was that the evidence existed but the claimant did not want to rely on it. In either case, the outcome was that the claimant did not have any evidence to establish facts from which the tribunal could conclude that any less favourable treatment he was subjected to was because of his sexual orientation. That meant that there was no reasonable prospect of the claimant passing the burden of proof to the respondent. That meant there was no reasonable prospect of the claimant’s discrimination complaints succeeding.[52]Miss Twomey acknowledged the high hurdle for striking out in discrimination cases. However, she submitted that it was clear from Chandhok that a Tribunal can strike out a discrimination complaint where on the case pleaded there is really no more than an assertion of a difference in treatment and a difference in protected characteristic. That was the situation here and the Tribunal was entitled to strike out all the discrimination complaints.[53]In its strike-out application letter the respondent acknowledged that the Tribunal may need to hear evidence on the specifics of the disciplinary process to decide whether (if the burden of proof did pass) there was a non-discriminatory explanation for the treatment in LFT1 and LFT2. However, it said that in relation to LFT 3 and 4 there were very clear objective explanations for the claimant’s treatment which were entirely unrelated to the claimant sexual orientation.[54]In relation to LFT3 it said that the way the claimant was treated was entirely consistent with its Data Protection Policy. His circumstances were also not the same as his named comparator, Mr Douglas, whose data access request was made via his solicitors rather than direct, as the claimant’s request was.[55]In relation to LFT4 it submitted that there was evidence from Companies House that the claimant had set up a competing business with Mr Douglas (“Douglas & Russell Business Consultants Ltd”). That provided an adequate, nondiscriminatory explanation for the letter it wrote to the claimant to remind him of his obligations not to compete with the respondent and to require him to sign undertakings to that effect.[56]As I understand it, the submission was that even if the burden of proof did pass to the respondent, there was no reasonable prospect of the claimant succeeding with an argument that the respondent had failed to provide an adequate non-discriminatory explanation for the treatment in LFT3 and LFT4. The claimant’s submissions[57]The claimant’s primary argument is that the only differentiating factor between him and his comparators is that he identified as gay. For his discrimination complaints to succeed he will need to show there is “something more” than that mere difference in treatment and difference in protected characteristic.[58]In terms of evidence from which the Tribunal could infer discrimination, the claimant accepted that the screenshots of WhatsApp messages he intended to rely on to show his treatment was because of his sexual orientation were not in the bundle. He said he had tried to email them to the respondent by 24 May 2024 but they had got stuck in his email Outbox. During the hearing the respondent provided a copy of an email exchange between the claimant and the respondent’s representative. It included an email from the claimant dated 5 July 2024 noting that the respondent had not received the email with the screenshots and that he would resend it. In an email on 17 July 2024 the claimant said that the email sending the WhatsApp was stuck in his outbox. There was no suggestion he had attempted to send it to the Tribunal or the respondent in the 3 weeks between realising that was the case and the preliminary hearing. The claimant’s explanation for that was that the respondent’s email of 17 July 2024 had said that they had finalised the bundle for the hearing and wouldn’t include any further documents. The claimant said he thought that meant he had missed the deadline for providing the screenshots and couldn’t do anything else about that.[59]The claimant also said that he would be providing witness evidence of behaviour in team meetings which supported a finding that managers involved in making decisions in his case were influenced by sexual orientation in making decisions. As Miss Twomey pointed out, this appears to be the first time the claimant referred to any such evidence.[60]In answer to my question, the claimant said that it was his case that the same senior managers were involved in decision making in relation to LFT 1, 2, 4 and 5. He did not suggest they were involved in LFT 3.[61]When it comes to LFT3 the claimant did not suggest there was evidence of behaviour by the Data Protection Officer supporting a finding that his treatment of the claimant was influenced by his sexual orientation. He accepts that the Data Protection Officer was employed by the respondent on or around May 2023 and did not have any dealings with the claimant prior to the alleged less favourable treatment. Conclusions on the application to strike out LFT1-5[62]As I have said, the claimant’s discrimination complaints will have no reasonable prospects of success unless he can establish facts from which the Tribunal could conclude that discrimination may have occurred. He relies heavily on the argument that the only differentiating factor between him and his named comparators is that he identifies as gay. I accept the respondent’s submission that that in itself is not sufficient to pass the burden of proof. If there were no other asserted facts or evidence which could potentially pass the burden of proof I would have struck out all the discrimination complaints on the basis that they had no reasonable prospects of success.[63]However, in deciding whether to strike out I have to take the claimant’s complaints at their highest. That means assuming that he will be able to establish the facts which he asserts in his case. In this case he has asserted that there is evidence of behaviour in team meetings by decision making managers from which a Tribunal could infer that their decisions were influenced by his sexual orientation.[64]I accept Miss Twomey’s submission that this is the first time the claimant has asserted this. I also accept her submissions that he has so far failed to provide other evidence of discriminatory behaviour in the form of the WhatsApp screenshots which he has said he intends to rely on. I did not find his explanation for failing to provide that material plausible. It is his evidence so it is for him to provide it. He was originally due to do that by 27 March 2024. Although he told the respondent he would resend it on 5 July 2024 he did not ensure that he did so. However, if I take the claimant’s case at its highest I have to assess the prospects of success on the assumption that he will be able to prove that there was behaviour at team meetings from which it could be inferred that managers who made relevant decisions were influenced by sexual orientation. It seems to me that working on that assumption I cannot say there is no reasonable prospect of the claimant doing enough to pass the burden of proof in relation to LFT 1, 2, 4 and 5.[65]The same does not apply to LFT3. The claimant did not suggest that there was evidence from team meetings or otherwise that the Data Protection Officer had behaved in a way which could lead to an inference that his decision to ask for ID was influenced by sexual orientation. The claimant accepts that he had had no contact with the Data Protection Officer prior to the treatment in LFT 3. I find there is no “something more” in relation to LFT3 which provides any reasonable prospect of the claimant succeeding in passing the burden of proof to the respondent. I find there is no reasonable prospect of complaint LFT3 succeeding. It does not seem to me that a lesser sanction than striking out is appropriate and I find it is appropriate to exercise my discretion and strike out complaint LFT3.[66]I do accept that there appears to be a potential non-discriminatory explanation for the decision to send the “letter before action” to the claimant (LFT4). The Companies House evidence in the bundle confirms that the claimant and Mr Douglas had set up a business together. That does provide a context for the decision to send a letter before action. However, the question for the Tribunal at the final hearing will be why the decision to send the letter before action to the claimant was taken in this case. That is a disputed question of fact which can only be decided by hearing evidence from the decision maker. I have not heard that evidence so I cannot say there is no reasonable prospect of the Tribunal rejecting the respondent’s non-discriminatory explanation for LFT4. The Unauthorised Deduction complaint[67]In his claim form, the claimant ticked the box to say he was claiming ”other payments” and specified that he was claiming “Legacy/Commission” of £15000.[68]In his case management order, Employment Judge Horne recorded the claimant’s complaint as being that the respondent had made a series of deductions from his wages. The claimant’s case was that commission was payable according to a contractual formula that allowed no room for discretion. According to the claimant, the formula was, essentially, a percentage of the contract value, tiered depending on overall revenue, with agreed enhancements depending on performance against defined targets.[69]Employment Judge Horne recorded that the claimant’s case was that the deductions were made from his “legacy commission” in August 2022 and every month after that from his monthly commission. The claimant has not quantified the commission payable. He says he needs disclosure of sales records in order to do that. During the hearing I was provided with copies of the claimant’s payslips. They show him being paid commission up to but not including March 2023 and April 2023.[70]The claimant clarified during his submissions at the strike out hearing that his case was that the respondent had withheld commission payments due from August 2022 to December 2022. He said that the respondent had agreed that these “legacy commissions” would be payable when certain KPIs and other caveats were met. He said he was not sure whether the agreement was in writing and thought it might just have been agreed at a Teams meeting. Miss Twomey suggested this was the first time the claimant had put the case that way.[71]I accept that those details are not set out in the claimant’s claim form. They do, however, reflect the claimant’s position in his letter of appeal against dismissal dated 11 May 2023 (pp.151-158). In that letter, the claimant says that turmoil in the energy industry resulted in the respondent introducing “legacy commissions” by withholding commission payable for the period August 2022 to December 2022. That withheld commission would be payable if certain caveats were met. In his appeal letter the claimant said that he believed that had he not been dismissed he would have achieved the majority of those caveats even excluding the NWL Contract, resulting in any remaining legacy commission becoming due.[72]The claimant did not provide details of what caveats he said had to be met to trigger release of the legacy commissions or the extent to which had met them. The respondent’s case when it came to the strike out application was, in essence, that that did not matter. That was because it said it had an absolute discretion about what commission was payable. In addition, any commission due and accrued was not payable in the event of notice of termination of employment having been given. In other words, even if the claimant had met the conditions for payment of any legacy commission, he would have lost any right to that money when he was dismissed. The respondent submissions:[73]Miss Twomey submitted that clauses 9.1-9.3 of the claimant’s contract of employment (p.102) applied to any commission. Under the heading “Benefits” they provide that: “9.1 The Company may, in its absolute discretion, pay you a bonus of such amount, at such intervals and subject to such conditions as it may in its absolute discretion determine from time to time. 9.2 Any bonus payment shall be purely discretionary and shall not form part of your contractual remuneration. If the Company makes a bonus payment to you in respect of a particular financial year, it shall not be obliged to make subsequent bonus payments in respect of subsequent financial years of the Company. 9.3 Notwithstanding clauses 9.1 and 9.2, you shall have no right to a bonus or a pro-rata proportion of the same if your Appointment is terminated (howsoever arising).”[74]She also relied on clauses in the Commission Plan (pp.118 to 121). That Plan provides (clause 6.1) that commission payments shall be in accordance with the Commission Letter. It also provides: “7. DBS DISCRETION7.1 DBS, in its sole and absolute discretion, reserves the right to withdraw, vary or amend the terms of this Commission Plan, the Supplier Payment Terms and/or the Commission Letter at any time without prior notice.7.2 DBS, in its sole and absolute discretion, reserves the right to make all determinations related to these terms and conditions, Supplier Payment Terms and the Commission Letter. OVERPAYMENTS AND CLAWBACK 8.2 Without prejudice to any remedies available to DBS from time to time, DBS, in its absolute and sole discretion, may withhold payment which would otherwise have been payable or have been paid in accordance with this Commission Plan and/or Commission Letter. 9. TERMINATION OF EMPLOYMENT In the event that the Relevant Employee’s employment with DBS is terminated, notice of termination is given by either party or the Relevant Employee is placed upon garden leave and/or is suspended (howsoever arising), the Relevant Employee shall have no right to receive any commission payments accrued, due or otherwise, save in the DBS’ absolute discretion. 13. QUERIES If the Relevant Employee has any queries concerning commission payments, these must be within one month of the date of the commission payment being made. Failure to raise any queries shall be deemed acceptance of such commission paid.”[75]The Commission Letter (pp.122-123) explains that commission is determined by “a Two Stage condition”. Stage 1 is a commission structure setting out a formula for calculating commission. Stage 2 sets out the timing of payment of commission payments. In summary, it provides that commission payment is split into 2 parts. The first part is paid 2 months after the supplier is “Locked in” and the second 2 months after “live”. The split of the total commission payable between those two payments varies depending on the period to the start date. Longer periods result in more commission being payable in the second part.[76]The Commission Letter provides that: DBS, in its sole and absolute discretion, reserves the right to make all determinations related to the commission payable.[77]Miss Twomey submitted that it was clear, based on clause 9.3 of the contract of employment that bonus payments were lost on termination of employment. She said that commission payments fell within that clause.[78]Alternatively, if they did not, the effect of clause 9 of the Commission Plan was the same. That clause made clear that entitlement to commission was lost when notice was given, even if commission had accrued or fallen due. She did accept that there was a difference between that clause and clause 9.3 of the contract of employment. The former gave the respondent a residual discretion to make commission payment when notice had been given whereas the latter did not. That discretion, she pointed out, was absolute. Until it was exercised in the claimant’s favour, there was no contractual or other entitlement to unpaid commission. The respondent had not exercised its discretion to pay the claimant’s commission. That being so, there was no legal right to it and unauthorised deduction in failing to pay it.[79]Miss Twomey also submitted that the claimant had never queried any commission payments made to him. Under clause 13 of the Commission Plan, he was deemed to have accepted the commission paid.[80]Neither the Commission Plan nor the Commission Letter refer to the concept of “Legacy Commission”. However, the claimant’s letter appealing against dismissal (p.151) quotes the reason for dismissal as being his committing fraud “solely to receive your legacy commission payment”. It does seem to me it was a concept which the respondent recognised. The Spence judgment[81]The Spence Judgment was a reserved judgment given by Employment Judge Morris on 4 December 2023 after a public preliminary hearing. In her claim, Mrs Spence had brought a number of complaints against the respondent including complaints of sex discrimination and sexual harassment. It appears from the judgment that she was dismissed for redundancy and paid in lieu of notice.[82]Her complaints included “monetary claims” relating to bonus and commission. The nature and extent of the amounts claimed are not fully set out in the judgment but it appears to me (from para 15.7 of the judgment) that the complaint was that Mrs Spence’s payment in lieu of notice should have included payment of bonus and commission as well as basic pay.[83]The respondent argued that Mrs Spence was not entitled to any bonus and commission because those were not “properly payable” under her contract.[84]Para 68 of the Spence Judgment quotes clauses 9.1 and 9.3 and 16.1 (“Payment in Lieu of Notice”) of Mrs Spence’s contract of employment. The wording of those clauses is identical to the equivalent clauses in the claimant’s contract.[85]Para 69 of the Spence Judgment quotes clause 9 of the commission scheme which applied to Mrs Spence. The wording is identical to the commission scheme which applied to the claimant.[86]Employment Judge Morris’s conclusion (para 71 of his judgment) was that the wording of the contract and commission plan in respect of employees losing the right to receive commission payments if their employment terminated applied to Mrs Spence. He found that the monetary sums claimed by Mrs Spence were not contractually due to her.[87]In reaching his decision, Employment Judge Morris acknowledged that in certain circumstances a bonus described as discretionary bonus can actually be contractual and that a term will be implied that any discretion will not be exercise its discretion irrationally or perversely (see Horkulak). However, he found there were key provisions in clause 9.3 of the contract and clause 9 of the commission agreement which went beyond the issue of discretion. Those, he said, were the provisions stating that there was no right to bonus or commission if employment is terminated.[88]Miss Twomey submitted that Employment Judge Morris was interpreting identically worded provisions to those which applied to the claimant. His decision was not binding on me but given he was interpreting identical provisions, they should be given a consistent interpretation. Given the conclusion in the Spence Judgment, she submitted that the claimant’s claim to be entitled to payment of commission had no reasonable prospect of success. The claimant’s submissions[89]The claimant’s primary submission was that he was contractually entitled to the “legacy commission” payments. He said that the commission was calculated by reference to a contractual formula (set out in the Commission Letter). He pointed out that commission had been paid in the past. He said that meant it was not discretionary.[90]Alternatively, he relied on the agreement he said had been reached over Teams about that legacy commission. He said the agreement was that it would be payable if certain KPIs or caveats were met. The claimant’s case was that he would have met the KPIs/caveats. His argument, as I understand it, was that if the relevant caveats were met, there was a contractual right to those payments which excluded any discretion on the part of the respondent. Crucially, however, on the claimant’s own case he had not yet met those criteria. In his appeal against dismissal letter he says he ”would have” met them. In comparing himself with Mr Birch in LFT5 his case is that he was in the same position as Mr Birch in not having met the caveats.[91]When it came to clause 13 and his deemed acceptance of past payments he said that he could not raise queries about payments made within one month because he did not have access to the payslips or the commission scheme documents at the relevant times. Conclusions on striking out the Unauthorised Deduction complaint[92]In considering whether to strike out the complaint I need to take the claimant’s case at its highest. That means I need to assume that he would be able to establish that the respondent had agreed via Teams that legacy commission withheld in August 2022 would become payable if certain conditions were met. As I have said, however, on the claimant’s own case, he had not yet met the “caveats” to trigger payment of the legacy commissions.[93]I accept that the same contractual provisions should where possible be interpreted consistently. I have considered whether there are reasons for departing from Employment Judge Morris’s conclusions in this case. It does seem to me there are some differences in the underlying facts of the cases.[94]The Spence Judgment does not appear to have involved consideration of entitlement to “legacy commission”. Its focus appears to have been what should be included in calculating a payment in lieu. It seems to me that is why Employment Judge Morris specifically considered clause 16.1 of Mrs Spence’s contract in reaching his decision. Mrs Spence does not seem to have argued that there was a specific agreement that past commission would be payable if certain caveats were met, which is what the claimant says. However, she did argue that she had already earned the commission and “refer a friend” bonus so they should be paid (para 16.17 of the Spence Judgment).[95]I bear in mind that striking out a complaint is a draconian act. Even taking the claimant’s case at its highest, however, he had not yet met the “caveats” which on his case he was required to meet for his entitlement to legacy commission to become contractual. Payment of that commission remained discretionary rather than contractual. So did the decision under clause 9 of the Commission Plan whether commission should be paid despite his employment having been terminated.[96]It seems to me that on that basis the claimant was in the same position as Mrs Spence. I accept that his complaint was about “legacy commission” rather than what commission or bonus should have been included in a payment in lieu. However, like Mrs Spence, his entitlement to commission remained discretionary rather than contractual. It does seem to me that the relevant provisions when it comes to commission rather than bonus are those in the Commission Plan rather than the contract of employment. I accept Miss Twomey’s submission that I should interpret the contract of employment and Commission Plan consistently with the approach adopted by Employment Judge Morris. He took into account the implied term considered in Horkulak and nonetheless concluded that the provisions of the contract of employment and the Commission Plan meant there was no contractual entitlement to payment of commission or bonus on termination of employment. My conclusion is the same. Given the provisions of the Commission Plan I find the unauthorised deduction complaint has no reasonable prospect of success.[97]I have gone on to consider whether I should exercise the discretion to strike out that complaint. I have in particular considered whether I should order that the claimant quantify or otherwise clarify his unauthorised deduction complaint before deciding to strike out his complaint. I have decided it would not be in accordance with the overriding objective to do so. The claimant’s own case is that he had not yet met the caveats to trigger entitlement to the legacy commission. Quantifying or clarifying that commission would not alter that. It would, however, result in further costs to the respondent and further delay. In those circumstances I exercise my discretion and strike out the unauthorised deduction complaint.
Relevant Law
[1]The deposit orders having not been paid, it follows that the above claims have been struck out by automatic operation of law.[2]Employment Judge Anderson is aware of the Claimant’s correspondence of the 7th May 2025 in which he states that the orders went into his junk folder and he has not asked for an extension.[3]Rule 40(4) of the Employment Tribunal Rules of Procedure 2024 provide: 40 (4) If the depositor fails to pay the deposit by the date specified by the deposit order, the Tribunal must strike out the specific allegation or argument to which the deposit order relates.[4]The strike out occurs due to the automatic operation of law. The wording in the rules is ‘must’, i.e. mandatory language. The orders were served, and no application has been made for an extension of time.