Mrs L Davies v Tailor Maid Care Solutions Ltd: 2600483/2018
JUDGMENT
[1]The Claimant was unfairly dismissed. However, if the Claimant had not been unfairly dismissed when she was, there would have been a 75% chance that a fair procedure would have resulted in the Claimant either being fairly dismissed on two months’ notice on 17 May 2018 or of her resigning on two months’ notice by no later than that date. There would therefore have been a 75% chance of the Claimant’s employment ending on 17 July 2018 and the Claimant’s compensatory award will be reduced accordingly.[2]The amount of the Claimant’s compensatory and basic awards will be determined at a remedy hearing on Monday 12 November 2018.[3]The Claimant was dismissed in breach of contract. The damages to be paid to the Claimant in respect of this breach of contract will be determined at the remedy hearing on Monday 12 November 2018.[4]The Respondent made unlawful deductions from the Claimant’s wages and is ordered to pay the Claimant £550 (net).[5]The Respondent did not fail to pay the Claimant an amount in respect of accrued but untaken holiday pay and the Claimant’s claim that it did fails and is dismissed.[6]The Respondent did not fail to provide the Claimant with itemised pay statements and the Claimant’s claim that it did fails and is dismissed. Page 1 of 12[7]The claim for unlawful deductions brought on the basis that the Respondent failed to pay the Claimant the sick pay due to her is dismissed following its withdrawal by the Claimant.REASONS
[1]The Claimant was summarily dismissed by the Respondent with effect from 12 January 2018. Following her dismissal she brought various claims. The hearing of those claims took place on 3 September 2018 in Nottingham (“the Hearing”).[2]The Claimant represented herself. The Respondent was represented by Mr Hendley. The Claimant gave evidence in support of her claims. Mr Jamie Dunbar and Mr John Lawlor who are both directors of the Respondent gave evidence on its behalf. Hearing preparation matters dealt with at the beginning of the hearing[3]The Respondent had made an application for the claims to be stayed pending the completion of what it said was a related criminal investigation. That application was heard by Regional Employment Judge Swan on 10 August 2018. The Respondent did not attend and was not represented. REJ Swan refused the application. A subsequent adjournment application by the Respondent on the basis that it had very recently instructed legal representatives made on 30 August 2018 was refused on 31 August 2018.[4]Against this background, the Case Management Orders made at the outset of this matter by the Tribunal had not been complied with. The Respondent attended on the day of the Hearing with a bundle of documents running to 75 pages (plus a significant number of unpaginated payslips) and brief witness statements for Mr Dunbar and Mr Lawlor.[5]The Claimant objected to the lateness of the production of these documents. I indicated to the Claimant that she could if she wished make an application for an adjournment, which might well be successful, but that I would not make an order preventing the Respondent from relying on the documents or witness statements, not least because most of the documents were documents which she would selfevidently have seen previously.[6]The Claimant chose not to make an application for an adjournment. Further, all of the documents she had included in her bundle of documents were included in the bundle prepared by the Respondent. As such the Tribunal used the Respondent’s bundle during the Hearing.[7]The Claimant also brought along to the Hearing further documents which she said were relevant in light of the content of the Respondent’s witness statements, which she had received only shortly before the Hearing. The Respondent reviewed these and made no objection to the Claimant relying on them. They were therefore turned into a supplementary bundle running to 28 pages.[8]I should observe at this point that although the Respondent’s witnesses referred to the alleged related criminal investigation in their evidence, Mr Hendley did not make a further application for the claims to be stayed (and so the Hearing postponed) pending the resolution of that investigation. Page 2 of 12 The discussion at the beginning of the Hearing and the issues[9]The parties and Tribunal discussed the claims at the beginning of the Hearing and agreed that it would be necessary for me to determine the issues set out below in order to decide the claims.[10]The parties agreed that the following issues arose: 1. What was the reason for dismissal and was it a potentially fair reason in accordance with section 98(1) and (2) of the 1996 Act? 2. The Respondent conceded that the Claimant’s dismissal was unfair because no fair procedure had been followed before dismissing the Claimant. However the following issues still arose in relation to the unfair dismissal claim:a. Was the Claimant’s employment due to end in any event on 15 January 2018 as a result of her resignation in November 2017?b. What adjustment if any should be made to the compensatory award to reflect the possibility that the Claimant would have been dismissed fairly at a later date or if a proper procedure had been followed?c. Would it be just and equitable to reduce the compensatory award because the Claimant caused or contributed to her dismissal?d. Would it be just and equitable to reduce the amount of the basic award because of blameworthy or culpable conduct by the Claimant prior to her dismissal? It was agreed that the amount of the compensatory award would be determined subsequently at a remedy hearing. Wrongful dismissal (breach of contract)[11]The parties agreed that the Claimant’s contractual notice period was 2 months and that she had been dismissed without notice. Accordingly the issue for me to determine was: 1. Had the Claimant committed an act of gross misconduct (i.e. a repudiatory breach of contract) such that the Respondent was entitled to dismiss her without notice? It was agreed that the amount of any damages for breach of contract would be decided separately at a remedy hearing. Unlawful deductions from wages (arrears of pay)[12]The Respondent accepted that the Claimant had not been paid for the week commencing 1 January 2018. The Respondent said that the Claimant had not worked that week and so was not entitled to be paid for it. The Respondent said that if the Claimant had worked that week then her net weekly pay for it would have been £550. Accordingly the issue for me to determine was: 1. Whether the Claimant had worked the week commencing 1 January 2018. Page 3 of 12[13]The parties agreed that the Claimant had accrued 21 days’ holiday in the holiday year in which her employment had terminated and that she would be due net holiday pay of £110 in respect of each untaken day (if any). The Claimant contended that she had taken only 14 days’ holiday in her final holiday year. The Respondent contended that she had taken 22. Accordingly the issue for me to determine was: 1. How many days’ holiday had the Claimant taken in the holiday year in which her employment terminated? Wage slips[14]The Claimant said she had not been provided with itemised payslips; the Respondent contended that she had. The issue for me to determine was: 1. Did the Respondent fail to provide the Claimant with wageslips as required by the 1996 Act?[15]The Claimant had also brought a claim for unlawful deductions on the basis that the Respondent had not paid her the sick pay due to her for the period 8 to 12 January 2018. After some discussion at the beginning of the Hearing the Claimant accepted that she had only been entitled to statutory sick pay and that the Respondent had paid her the amount of statutory sick pay due on the morning of the Hearing. Accordingly she withdrew this claim.[16]Sorting out the bundle-related issues as set out above took some considerable time at the beginning of the Hearing, with both the Claimant and Respondent needing time to review documents produced at or just before the Hearing by the other. As a result of this the Tribunal did not begin to hear evidence until 1pm and consequently it was necessary for me to reserve my decision at the conclusion of the Hearing.The Law
[17]Section 94 of the 1996 Act gives an employee the right not to be unfairly dismissed. In order to bring a claim of unfair dismissal, the employee must show that they have been dismissed. The circumstances in which an employee is dismissed are set out in section 95 of the 1996 Act. The burden of proof to show a dismissal has taken place is on the employee.[18]Section 98(1) of the 1996 Act provides that when a Tribunal has to determine whether a dismissal is fair or unfair it is for the employer to show the reason for the dismissal and that such reason is a potentially fair reason because it falls within section 98(1)(b) or section 98(2). The burden of proof to show the reason and that it was a potentially fair reason is on the employer.[19]A reason for dismissal is a set of facts known to, or beliefs held by, the employer which cause it to dismiss the employee.[20]If the Respondent persuades the Tribunal that the reason for dismissal was a potentially fair reason, the Tribunal must go on to consider whether the dismissal is fair or unfair within the meaning of section 98(4) of the 1996 Act. This requires the Tribunal to consider whether the decision to dismiss was within the band of reasonable responses.[21]Section 98(4) applies not only to the actual decision to dismiss but also to the procedure by which the decision is reached. The burden of proof is neutral under section 98(4). Page 4 of 12[22]In considering this question the Tribunal must not put itself in the position of the Respondent and consider what it would have done in the circumstances. That is to say it must not substitute its own judgment for that of the Respondent. Rather it must decide whether the decision to dismiss the Claimant fell within the band of reasonable responses which a reasonable employer might have adopted. A claim will not succeed just because the Tribunal takes the view that the decision to dismiss was harsh if it nonetheless fell within the range of reasonable responses.[23]When the reason for the dismissal is misconduct, the Tribunal should have regard to the three part test set out in British Home Stores Limited v Burchell [1980] ICR 303.[24]First, the employer must show that it believed the Claimant was guilty of misconduct. This is relevant to the employer establishing a potentially fair reason for the dismissal under section 98(1) and the burden of proof is on the employer.[25]Secondly, the Tribunal must consider whether the employer had reasonable grounds upon which to sustain its belief in the employee’s guilt.[26]Thirdly, the Tribunal must consider whether at the stage at which that belief was formed on those grounds the employer had carried out as much investigation into the matter as was reasonable in the circumstances.[27]The second and third parts of the test are relevant to the question of reasonableness under section 98(4) and the burden of proof in relation to them is neutral.[28]Section 123 of the 1996 deals with the calculation of the compensatory award. Section 123(1) provides: Subject to the provisions of this section and sections 124, 124A and 126, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[29]I have therefore considered whether the compensatory award should be reduced to reflect the chance that the Claimant would have been dismissed fairly at a later date or if a proper procedure had been followed.[30]Section 123(6) of the 1996 Act requires the Tribunal to reduce the amount of the compensatory award by such amount as it considers just and equitable if it concludes that the Claimant caused or contributed to their dismissal. In addition, section122(2) requires it to reduce the basic award if it considers that it would be just and equitable to do so in light of the conduct of the Claimant prior to dismissal. Wrongful dismissal[31]At common the right of summary dismissal arises when the employee commits a repudiatory breach of contract. The employer has the option of waiving the breach or of treating the contract as discharged by the breach.[32]The key issue, therefore, in any claim of wrongful dismissal will often be whether the employee's breach of contract was repudiatory: whether it was sufficiently serious to justify dismissal. That depends on the circumstances. If not justified, the dismissal is wrongful, and the employer is liable in damages. Page 5 of 12[33]There are no hard and fast rules as to the degree of misconduct necessary for behaviour to amount to a repudiatory breach of contract, although dishonesty, serious negligence or wilfully disobeying lawful instructions will often justify summary dismissal at common law. The Tribunal will consider whether the misconduct has so undermined the trust and confidence inherent in the particular contract of employment that the employer should no longer be required to retain the employee in employment.[34]Section 13 of the 1996 Act provides that an employer may not make a deduction from wages of a worker unless the deduction is required or authorised by virtue of a statutory provision or a relevant provision of the worker’s contract or the worker has previously signified in writing his agreement or consent to the making of the deduction.[35]Section 23 of the 1996 Act provides that an employee may complain to an Employment Tribunal that an employer has made deductions from their wages in breach of section 13.[36]Section 24 of the 1996 Act provides that where an Employment Tribunal finds a complaint under section 23 well founded it shall make a declaration to that effect and order the employer to pay the amount of any deduction made in contravention of section 13. Payslips[37]Section 8 of the 1996 Act gives an employee the right to be given at or before the time at which any payment of wages is made to him or her a written itemised pay statement.Findings of Fact
[38]I am bound to be selective in my references to the evidence when explaining the reasons for my decision. However, I wish to emphasise that I considered all the evidence in the round when making my findings. Background findings[39]The Claimant was employed by the Respondent from 20 July 2015 until 12 January 2018 when she was summarily dismissed. The Respondent’s business is the provision of care services (in the shape of staff who carry out home visits) and the Claimant was recruited by the Respondent as someone with previous experience of, and connections relevant to, this area of business. The Claimant was employed as the Area Manager. She was also the “Nominated Individual” – this is a role required by the regulatory framework for care providers.[40]As the Area Manager and Nominated Individual the Claimant was the most senior employee of the Respondent involved in its day to day business. The Claimant accepted this expressly in her oral evidence.[41]On 13th November 2017 the Claimant resigned on two months’ notice. She gave the reason for her resignation (letter, page 48) as being as follows: I feel I built this company from nothing, but haven’t gained any respect from doing this. Page 6 of 12[42]Her last day of employment was stated in the letter of resignation to be 15th January 2018. Mr Dunbar for the Respondent wrote to the Claimant on 14 November 2017 (letter, page 49) accepting the resignation.[43]On 12 January 2018 the Respondent summarily dismissed the Claimant (letter, page 52). The letter referred to an investigation: … due to the major concerns regarding wage payments which has come to our attention over the last few months. I opened my investigation to help me understand why the wage payments for Tailor Maid Care was substantially higher than what it should have been. During the investigation, numerous issue of a serious nature have been identified. These issues are those that could have been prevented, and should not have arisen, as the role of the responsible person is to prevent such issues from arising and to safe guard the business and its service users from risk. With all the evidence, I have collated I have decided to take disciplinary Action. Due to the seriousness of this matter you are dismissed with immediate effect for gross misconduct. You have been dismissed for gross misconduct for the following reasons:• Knowingly Authorizing and submitting fraudulent documentation leading to the financial detriment of the company.• Gross Negligence.• Failure to follow company policy and procedures. Having considered the above points and evidence I’ve collated, this has resulted in a fundamental Breach of your contractual terms that has destroyed the trust and confidence necessary to continue our employment relationship which constitutes gross misconduct which is why you are dismissed with immediate effect.[44]The Claimant wrote to the Respondent on 15 January 2018 (letter, page 53) stating that she had taken advice and that a fair procedure would have involved her being given details of the allegations against her and an opportunity to respond before any decision were taken about dismissing her. It also stated that she would like to appeal. The Respondent replied on the same date (letter, page 54). The letter quoted from the disciplinary procedure of the Respondent but gave no further details in relation to either the allegations or evidence beyond stating: …we have evidence that proves you either directly or indirectly benefited from the signing off of fraudulent time sheets. A sample of the evidence was sent along with the dismissal letter.[45]The letter finished by stating that because the Claimant had “decided not to appeal” (which in fact was quite the opposite of what her own letter of 15 January said) “this will be my last correspondence on the subject”.[46]The Respondent was subjected to an Inspection Report (“the Report”) by the Care Quality Commission (“CQC”) on 25th and 29th January 2018, shortly after the Claimant’s dismissal. The CQC published its report on 17 April 2018 (partial extract of report, pages 70 to 73). The overall rating given was “inadequate”. Of the five criteria assessed three were assessed as “requiring improvement” and two as “inadequate”.[47]The Report’s contents included the following: Page 7 of 12 47.1. Concerns about the information and services provided to service users; 47.2. Concerns about the time keeping of staff with visits to service users not being made at the scheduled times and/or lasting less time than they should have lasted. The Report noted that “little had been done to monitor these issues during the period”; 47.3. A note that the service is “currently suspended” with local authority commissioners; 47.4. An observation that “Quality assurance processes were not effective in ensuring the risks to people’s health, safety and welfare were addressed”; 47.5. An observation that “The service was managed by a well-meaning but inexperienced registered manager, who did not have the skills or experience to manage the service effectively”; 47.6. An observation that “The registered person had not always ensured that the CQC were notified of incidents that had or could have an impact on people’s health and safety”; 47.7. An observation that “the overall rating for this service is “Inadequate” and the service therefore will be placed in ‘special measures’; 47.8. A finding that there was a “lack of clear management and overall planning of care provision”; 47.9. A finding that “there were widespread areas of concern that were having or could have a direct impact on the quality of the service people received”; 47.10. A finding that “quality assurance processes were ineffective in addressing any of the concerns identified during this inspection”.[48]The contents of the Report were as such highly unsatisfactory. The matters referred to in it had also resulted in Nottingham City Council suspending its use of the Respondent’s services. The resignation[49]The Claimant’s account was that it had been agreed at a meeting on 16 November 2017 that her resignation was retracted and that her employment would continue. The account of Mr Lawlor and Mr Dunbar who gave evidence at those meetings was that this had not happened. The resignation stood.[50]I concluded that there were issues which called the credibility of all the witnesses into account. I found that the Claimant was inclined to exaggerate (for example, the number of hours care being provided weekly by the Respondent as a result of her efforts) and that aspect of her evidence did not stand up to scrutiny (for example, her evidence about whether she was on holiday or not over the Christmas/New Year period 2017 to 2018). So far as Mr Lawlor was concerned, his evidence was at best confused. After he had given his oral evidence I was not at all convinced that he knew why exactly why he had dismissed the Claimant, so imprecise was his account of the relevant evidence and factors involved. Turning finally to Mr Dunbar, I felt his credibility was undermined to some extent by his vagueness about the evidence relied upon in reaching the decision to dismiss. For example, he believed that evidence supporting her dismissal had been sent to the Claimant with the letter of 12 January 2018 but he did not describe that evidence in his witness statement and it was not included in the bundle.[51]Against this background, I find that the Claimant did retract her resignation at the request (and so with the agreement) of the Respondent at the meeting on 16 November 2017 for the following reasons: 51.1. The Respondent did not refer to the Claimant’s employment being due to terminate by virtue of her resignation on 15th January in the letter of dismissal on 12th January, in its response to her appeal on 15th January or in the Response Page 8 of 12 which it presented to the Tribunal. I find that if the Claimant’s employment had been due to terminate just 3 days after her dismissal then it is highly likely that this fact would have been referred to by the Respondent in at least one of those documents; 51.2. The evidence of Mr Lawlor and Mr Dunbar (and, indeed, the Respondent’s letters of 12th and 15th January 2018) suggested that they had no experience of how to dismiss an employee fairly. They appeared to be all at sea. In these circumstances, I find that it is highly unlikely that they would have dismissed the Claimant on 12th January if her employment was due to terminate just 3 days later in any event. I reject the suggestion that they decided to dismiss the Claimant in any event because Nottingham City Council was demanding action. I reject this suggestion for two reasons:(1) such a demand could have largely been answered by stating that the employee whom they regarded as responsible was leaving their employment very shortly; and(2) this was not in any event the consistent evidence of Mr Lawlor and Mr Dunbar. For example, in his written witness statement Mr Lawlor suggested (paragraph 4) that he dismissed the Claimant “due to pressure from our client and the potential fallout from our governing body if we didn’t deal with the issues that had arisen” but then did not mention these factors when giving oral evidence in relation to this same issue.[52]I therefore conclude that the Claimant’s employment was not due to terminate by resignation on 15th January 2018. The dismissal[53]I find that the dismissal of the Claimant was due to an honest belief held by both Mr Lawlor and Mr Dunbar that the Claimant had been managing the business of the Respondent incompetently and, possibly, dishonestly.[54]I do not find, however, that as at the date of dismissal the Respondent had conducted a reasonable investigation into the possible incompetence or dishonesty of the Claimant or that it had reasonable grounds for its belief. This is for the following reasons (which take full account of the Respondent’s suggestion that the police were involved in the matter and that it was accordingly inhibited in its ability to produce evidence to the Tribunal): 54.1. The Respondent did not include in the bundle any of the evidence that it said it had relied on in reaching its belief that the Claimant had acted incompetently and, possibly, dishonestly; 54.2. The Respondent was not even able to produce a copy of the evidence which it claimed it had sent to the Claimant with his letter of dismissal (and indeed I find that no such evidence was sent); 54.3. Neither Mr Lawlor nor Mr Dunbar were able and willing to coherently and comprehensively describe the evidence that they had relied on. For example, Mr Dunbar could not describe what the evidence which had allegedly been sent with the dismissal letter comprised. When asked about this by his own representative he said “I don’t know without going through the file”. At the end of the Hearing, it was not at all clear to me on what evidence the decision to dismiss in January 2018 had been based. What would have happened if the Claimant had not been dismissed when she was[55]The Report was published on 17 April 2018. It is a damning report. Page 9 of 12[56]The Claimant was, as she accepted, the most senior employee involved in the day to day running of the Respondent’s business. She had been employed because of her expertise in the care sector (having 17 years’ experience). She was the Nominated Individual. Her son, the Registered Manager was, I find, in a more junior role.[57]I find that the failings as set out in the Report relate largely to the period prior to the Claimant’s dismissal, albeit the inspection did not take place until late January 2018, after she had been dismissed. I find that the Respondent could reasonably and would after a reasonable investigation have taken the view that the Claimant should take responsibility for the failings set out in the Report because she was the most senior employee involved in the day to day management of the business. I find that the extent of the failings would have been likely to result in the Respondent losing all confidence in the Claimant’s ability to manage its care business competently.[58]I find that a fair procedure would have begun shortly after the publication of the report on 17 April 2018 and would have taken one month. I find that there would have been a 75% chance of that procedure having resulted in the Claimant either being fairly dismissed on two months’ notice on 17 May 2018 or of her resigning on two months’ notice by no later than that date. As such I find that there would have been a 75% chance of the Claimant’s employment ending on 17 July 2018. I make this finding in relation to the possible resignation of the Claimant in light of her previous resignation and the fact that relationships between her and Mr Lawlor and Mr Dunbar were clearly strained. Contributory conduct[59]I have made the “Polkey” findings above essentially because I have taken the view that the Claimant would have “carried the can” for the failings identified in the Report. However there is insufficient evidence in the Report (or in the bundle) for me to find that the Claimant caused or contributed to her dismissal in January 2018 by culpable or blameworthy conduct. The fact that I have found that there is a 75% chance that the Claimant would have been dismissed or resigned following the publication of the Report does not in and of itself show that she was guilty of culpable or blameworthy conduct prior to her dismissal in January 2018. Wrongful dismissal findings[60]It is for the Respondent to prove on the balance of probabilities that the Claimant committed a repudiatory breach of contract justifying her dismissal without notice in January 2018.[61]The Respondent has failed to prove this. In light of my findings above in relation to the evidence available to me, the Respondent has not proved that the Claimant committed a repudiatory breach of contract. For the avoidance of doubt, the Respondent has most certainly not proved that the Claimant acted dishonestly prior to her dismissal.[62]I accept as true the Claimant’s account that she worked in the first week of January 2018. The Respondent’s evidence that she had not largely comprised Mr Lawlor and Mr Dunbar saying that they had not seen her in the office. However there recollections in this regard did not appear precise to me and, in any event, the nature of the Claimant’s role would have given her various reasons for being engaged in work out of the office. Page 10 of 12[63]The dispute in relation to holiday pay related essentially to the period 22 December 2017 to 2 January 2018 (8 days). The Claimant’s evidence was that she had not taken holiday during that period. The Respondent’s evidence was that she had.[64]There was some evidence that the Claimant had done a very small amount of work on 22nd and 25 December 2017 in each case for just under or just over an hour (pages 1 and 2 of the supplementary bundle). However her workplace diary showed her as being on holiday throughout the period.[65]The Claimant’s own evidence in relation to this issue unraveled to some degree when she gave oral evidence. It might reasonably be summarised as being that she worked on Friday 22nd, took some meals out to a couple of service users on Christmas day because she was “soft hearted” (not because it was required by the Respondent) and that she was “on call” for the rest of the time. She did not give any significant account of what work she had performed when “on call”.[66]I conclude that the Claimant did work on 22nd December 2018 but not thereafter. I find that she may have done the odd work-related task during the Christmas and New Year period but that she was not “on call”. There was no requirement imposed on her by the Respondent to work or be on call during this period. She was on holiday. I find that if she had not considered herself to be on holiday her workplace diary would not have shown that she was.[67]I therefore conclude that during the holiday year in which her employment terminated the Claimant took 21 days’ leave: after some conclusion in her oral evidence she said she had taken 15 days not including any days at Christmas. In fact I find that she took 6 days at Christmas (25 December to 1 January) and so in total took 21 days. Wage slips[68]The Respondent produced wage slips that it said had with the agreement of the Claimant been put in a folder with the wage slips of other employees for the Claimant to collect each week.[69]I accepted the evidence of Mr Dunbar and Mr Lawlor in this regard and preferred it to that of the Claimant because it was supported by the existence of the payslips contained in the Hearing bundle.Conclusions
[70]I reach the following conclusions in relation to the issues set out above.[71]The reason for the dismissal of the Claimant was the belief of both Mr Lawlor and Mr Dunbar that the Claimant had been managing the business of the Respondent incompetently and, possibly, dishonestly.[72]As the Respondent sensibly conceded that dismissal was not fair – no procedure was followed before the Claimant was summarily dismissed. She was not given notice of the allegations against her or shown the evidence said to support them. In light of the lack of evidence in relation to such matters at the Hearing I further conclude that the Respondent had not carried out a reasonable investigation prior to dismissing the Claimant and that it had no reasonable grounds for its belief in her guilt.[73]I conclude in light of my findings of fact set out above that the Claimant’s employment was not due to terminate by reason of her resignation on 15 January 2018. Page 11 of 12[74]I do, however, conclude in light of the Report that if the Claimant had not been unfairly dismissed when she was then there would have been a 75% chance that a fair procedure would have been followed following its publication resulting in the Claimant either being fairly dismissed on two months’ notice on 17 May 2018 or of her resigning on two months’ notice by no later than that date. As such I find that there would have been a 75% chance of the Claimant’s employment ending on 17 July 2018.[75]Turning to the separate issue of reductions pursuant to section 123(6) and 122(2) of the 1996 Act, in light of my findings of facts above I do not consider that it would be just and equitable to reduce either the compensatory award or the basic award Wrongful dismissal[76]In light of my findings of fact above I conclude that the Respondent has not proved that the Claimant was guilty of gross misconduct which justified its dismissal of her without notice. The Respondent has not proved that the Claimant committed a repudiatory breach of contract.[77]In light of my findings of fact above I conclude that the Respondent made unlawful deductions from the Claimant’s wages for the period 1 to 5 January 2018 and accordingly I order the Respondent to pay the Claimant £550 (net).[78]In light of my findings of fact above I conclude that the Claimant took all the holiday to which she was entitled in her final holiday year and that accordingly the Respondent did not make unlawful deductions from her wages and/or act in breach of contract and and/or fail to make a payment due to the Claimant on the termination of her employment pursuant to Regulation 14 of the Working Time Regulations 1998 by failing to make a payment in respect of accrued but untaken holiday. No such payment was due. Pay slips[79]In light of my findings of fact above I conclude that the Respondent complied with its obligations under the 1996 Act to provide itemised pay statements.Conclusions
Background
[1]The Respondent’s application of 4 October 2018 for a reconsideration of the liability Judgment in this matter sent to the parties on 21 September 2018 is dismissed.[2]The Respondent is ordered to pay the Claimant damages for breach of contract (wrongful dismissal) of £4,635.40.[3]The Respondent is ordered to pay the Claimant the following amounts in respect of her successful claim for unfair dismissal:3.1 A basic award of £1,467.3.2 A compensatory award of £9,522.13.Preliminary matters
[4]The Employment Protection (Recoupment of Job Seeker’s Allowance Income Support) Regulations 1996 apply to the monetary award:4.1 The monetary award is £10,989.13.4.2 The prescribed element is £8,462.30.4.3 The dates for which the prescribed element is attributable are 12 January 2018 to 12 November 2018.4.4 The amount by which the monetary award exceeds the prescribed element is £2,526.83. JUDGMENT having been sent to the parties on 12 December 2018 and written reasons having been requested in accordance with Rule 62(3) of the Employment Tribunals Rules of Procedure 2013, the following reasons are provided:[1]The Respondent dismissed the Claimant without notice on 12 January 2018. Following her dismissal the Claimant brought various claims which I heard in September this year in Nottingham.[2]By a reserved judgment sent to the parties on 21 September 2018 I found that the Claimant had been unfairly and wrongfully dismissed. However I also found that there was a 75% chance that her employment would have terminated in any event by 17 July 2018.[3]When I sent out the judgment and written reasons I made case management orders setting down a remedy hearing for today. Preliminary matters Adjournment[4]The Respondent applied for an adjournment of the remedy hearing on the last working day before it was due to take place. In that application the Respondent stated: I would like to postpone the remedy hearing for a month so I can bring myself up to speed on it properly. Mr Dunbar has been dealing with this case and has now gone off with severe depression so I am now left to try and resolve things on my own. We are not being represented now so I just need some time to find new representation and also bring myself up to speed on the whole case. I have got proof of Mr Dunbar’s illness if you require proof. Can you let me know asap please. Kind regards John Lawler.[5]I rejected the application on the same day in the following terms: The Respondent’s application for a postponement is refused. Employment Judge Evans considers that the inability of Mr Dunbar to attend on Monday is not a sufficiently good reason for the hearing to be postponed. However the Respondent may repeat its application on Monday at the beginning of the hearing. If it wishes to do this it should consider the Employment Tribunals (England and Wales) Presidential Guidance – seeking a postponement of hearing (available on-line) and in particular its paragraphs 1, 3 and 4 under the heading “examples”. The Respondent must ensure that any application made on Monday is supported by the necessary information and documentation. The case remains listed for hearing on 12 November 2018.[6]In rejecting the Respondent’s application in these terms and in exercising my judicial discretion I took into account: Page 2 of 10 i. The history of this matter which had seen the Respondent seeking adjournments on a number of occasions prior to the original hearing (including as a result of its late instruction of representatives); ii. The fact that Mr Lawler had given evidence at the liability hearing and so was aware of the issues arising in the claim; iii. The fact that the remedy issues to be dealt with today were in legal terms straightforward: any competent employment specialist instructed by the Respondent last week after its previous representatives had come off the record would have been able to pick up the hearing bundle which had already been prepared by the Respondent’s previous representatives and dealt with the matter at the hearing today.[7]In fact the Respondent did not attend this morning and therefore did not make any further application for an adjournment. I asked the clerk to call the Respondent to find out if they were intending to attend. The Respondent said that they still wanted an adjournment but that they would not be attending the hearing.[8]There was as such no live application for an adjournment before me: no application had been made following my rejection of the previous application and telling a clerk on the phone on the morning of the hearing that one is not attending but wants an adjournment is not an application for one. I therefore went on to consider the question of whether we should proceed in the absence of the Respondent under Rule 47 of the Tribunal Rules of Procedure. Given that there was no satisfactory or reasonable explanation for the Respondent’s absence today, I exercised my discretion to proceed with the hearing in its absence. The application for a reconsideration[9]The Respondent had made an application for a reconsideration under Rule 71 of the Tribunals Rules of Procedure on 4 October 2018. That was not referred to me until 6 November 2018 so I instructed the Tribunal’s staff to reply to the Respondent and to the Claimant (who opposed the application) telling them that it would be dealt with at the beginning of the hearing today. The Respondent had stated in its application that the interests of justice required a reconsideration because the Claimant had not raised until the morning of the liability hearing the fact that she claimed to have retracted her resignation made in November 2017. The Respondent said that it had therefore been ambushed in relation to this significant issue. The Respondent said that it would have produced documents relevant to that issue which it now produced with its application for a reconsideration if it had known that that issue was in play.[10]Having carefully considered the application I have concluded that the interests of justice do not require a reconsideration for the following reasons and have therefore dismissed that application. The original Claim did not refer to the employee’s resignation in November 2017. Further the Response of the Respondent to the Claim did not refer to the Claimant’s resignation either.[11]It was in fact raised as being a potentially relevant issue for the first time at the liability hearing by the Respondent in its witness statements and in the documents included in its bundle. The witness statements had not previously Page 3 of 10 been exchanged and the Claimant had only been provided with the Respondent’s bundle at a very late stage. Prior to the date of the liability hearing the pleadings would have led the Claimant reasonably to take the view that the Respondent was not raising an issue in relation to her resignation. Further, as set out in paragraph 15 of my liability judgment, the correspondence between the parties around the time of her dismissal did not refer to her resignation.[12]In short prior to the date of the liability hearing both parties had acted as though the Claimant’s resignation was of no relevance to the claims brought. That is to say both parties had dealt with the dismissal and consequent litigation in a manner which was entirely consistent with the Claimant having agreed with the Respondent that she would retract her resignation and that her employment would continue.[13]The Respondent argued in its application for a reconsideration that it was “ambushed at the hearing” by the Claimant asserting she had retracted her resignation. I conclude that this is disingenuous. The reality is that the Respondent had not raised the resignation as a potentially relevant issue until the hearing. If anyone was guilty of “ambush” it was the Respondent.[14]In these circumstances the interests of justice do not require a reconsideration of my liability decision. It would have been obvious to the Respondent (and its advisers) that if the Respondent was going to raise the question of the resignation then the Claimant would argue that it had been retracted. Consequently the Respondent should have included in its documents and therefore the bundle, all documents relevant to the issue. The interests of justice do not require me to consider further documents which the Respondent could but did not produce at the liability hearing. The Respondent’s application is therefore dismissed.[15]In any event I note that the correspondence on which the Respondent sought to rely in support of its application for a reconsideration does not provide any real support for its contention that it had been seeking to find a replacement for the Claimant in December 2017 (because she had by then resigned). She was the “area manager” but the correspondence provided (6 pages of e-mails and attachments) refer expressly only to the Respondent’s attempt to employ a “registered manager”. That was a different role within the Respondent’s organisation. The documents are not as such obviously relevant to the issues which the Respondent identified. Consequently, if I had concluded that the interests of justice required a reconsideration then, having taken account of the additional evidence provided by the Respondent, I would have confirmed my original decision. The Claimant’s unfair dismissal claim[16]At the hearing on 12 November 2018 the Claimant represented herself. For the reasons set out above the Respondent did not attend and was not represented. I had before me a witness statement prepared by the Claimant. I also had before me a bundle running to 180 pages which had been prepared by the Respondent’s representatives.[17]The Claimant took the oath and gave some brief additional oral evidence. I asked her about her job search and in particular why she had not applied for jobs similar to those which she had held with the Respondent. I also asked her Page 4 of 10 questions about why she had chosen to become self-employed rather than seeking other better remunerated employment.The issues
[18]The issues for me to determine at the remedy hearing were as follows:- i. The amount of damages due to the Claimant in respect of her claim for breach of contract. ii. The amount of her basic award. iii. The amount of her compensatory award.[19]At the beginning of the hearing I explained my power to make a reemployment order. The Claimant explained that she did not wish me to exercise that power. She only wanted to receive an award of compensation.The Law
[20]An employee who is unfairly dismissed is entitled to a basic award. The basic award is calculated in accordance with section 119 of the Employment Rights Act 1996. An employee who is unfairly dismissed is in principle also entitled to receive a compensatory award. This should be calculated in accordance with section 123 of the Employment Rights Act 1996. As section 123 notes an employee is required to mitigate the loss which they have suffered as a result of their dismissal. This duty can be summarised as follows: It is the duty of an employee who has been dismissed to act reasonably and to act as a reasonable man would do if he had no hope of seeking compensation from his previous employer. (Archibald Freightage Limited v Wilson [1974] IRLR 10.)[21]The operation of the principle of the duty to mitigate was clearly expressed as follows in AG Bracey Limited v Iles [1973] IRLR 210: The law is that it is the duty of a dismissed employee to act reasonably in order to mitigate his loss. It may not be reasonable to take the first job that comes along. It may be much more reasonable, in the interests of the employee and of the employer who has to pay compensation, that he should wait a little time. He must, of course, use the time well and seek a better paid job which will reduce his overall loss and the amount of compensation which the previous employer ultimately has to pay … [A] man who is dismissed from a £40 a week job may act unreasonably if he does not accept a job bringing in, say, £35 a week. If he does not do so, a tribunal is fully entitled to say, “We are going to take no account of any loss which he could have avoided by taking the £35 a week job”. But that still leaves him with a loss of £5 a week, the difference between £40 and £35. A tribunal is fully entitled to take account of that loss, which could not have been avoided by taking the job which they think he should have taken[22]However the duty to mitigate does not arise until the employee has been dismissed and if the Respondent seeks to argue that the employee has not mitigated their loss then the burden of proof is upon the Respondent making that allegation. Page 5 of 10[23]Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 means that a Tribunal has discretion to increase the compensatory award by up to 25% if it considers it just and equitable to do so in light of any failure by the Respondent to comply with the relevant ACAS code.Findings of Fact
[24]The Claimant was employed by the Respondent as an Area Manager. She earned £837.00 gross (or £550.00 after tax) a week. She was provided with a 12 year old Tigra company car with a 1600 cc petrol engine. She had to pay for all the petrol which the car used both for business and personal use. She was however permitted to use the car for personal use.[25]The Claimant details in her witness statement her attempt to find employment after her dismissal. She explains that she applied for various jobs in relation to which she included documents in the bundle. They were generally speaking jobs which were more junior than the role she had held with the Respondent. Naturally I was concerned to establish why it was that the Claimant had applied for more junior and therefore less well remunerated jobs.[26]I find in accordance with the Claimant’s evidence that this was because she had been dismissed for gross misconduct. The care sector in which the Claimant worked is highly regulated. I find that in order to obtain a relatively senior job such as that which she held with the Respondent it would inevitably have been necessary for her to provide a reference from her most recent employer. I find that such a reference would have recorded that she had been dismissed for gross misconduct (and indeed this is what the Respondent told the DWP when asked by the Job Centre). I find that consequently the Claimant’s decision to seek more junior roles represented a realistic assessment of the options initially open to her following her dismissal and that she acted reasonably in not seeking similar jobs to the one she had previously held in February and March.[27]I find that in February and March the Claimant made significant efforts to find alternative employment. I find that she applied for over 20 jobs but that none of her applications were successful. I find that this was largely due to the reason for her dismissal.[28]From April 2018 the Claimant has taken advantage of her own background in the care business and begun to run and build up her own business providing care to individuals who are in need of it. I find that the business is going well. The Claimant’s evidence was to the effect that she hopes and expects to have reached a profit level reflecting her salary with the Respondent by the year end. I find that she will have done so.[29]The Respondent included a number of vacancies for posts similar to the one held by the Claimant with it in the bundle. The dates on which those posts were vacant is not altogether clear. However, insofar as the Respondent alleges that the Claimant’s failure to apply for such posts shows a failure to mitigate her loss, I reject that contention. I find that until September 2018 (when I found that the Claimant had been unfairly dismissed and had not been dismissed in circumstances where there had been gross misconduct proven by the Respondent) it was reasonable for the Claimant not to apply for jobs similar to Page 6 of 10 the one that she held with the Respondent because of the problems presented by the reason for her dismissal in applying for such jobs.[30]I further find that in respect of the period since September 2018 it was reasonable for the Claimant not to apply for such jobs in light of the success of her new business venture. Overall, therefore, I conclude that the Respondent has failed to prove on the balance of probabilities that the Claimant has not taken sufficient steps to mitigate her loss.[31]Turning now to the question of the Respondent’s compliance with the relevant ACAS code, in accordance with my decision in relation to liability, I find that the Respondent failed to comply with the code completely. I have therefore concluded that it would be just and equitable to increase the compensatory award made to the Claimant by 25%.[32]I turn now to the findings of fact relevant to the calculation of the award due to the Claimant. Losses relating to the provision of the company car[33]I have used the RAC figures as set out in “RAC Motoring Services Illustrative Vehicle Running Costs Petrol Engines 2017” for the purposes of calculating the Claimant’s loss relating to the provision of the company car. I have however adjusted the RAC figures to reflect the fact that the Claimant’s car was around 15 years old and therefore ongoing depreciation would have been minimal. I have allowed a figure of £1,000 over a 3 year period instead of the £9,800 set out in the RAC figures.[34]I have also adjusted the RAC figures to reflect the Claimant’s higher annual mileage (17,000 instead of the 10,000 used in the table). I have done this by increasing the costs by 20%. Insurance and maintenance would be higher for a motorist doing 17,000 rather than 10,000 miles a year. I have then used 17,000 miles as the basis of calculating costs per mile. Having made these adjustments a figure per mile for a 1.6 litre petrol engine car is calculated as follows. The RAC’s table for total running costs over a 3 year period with these adjustments and with the adjustment for depreciation would be £5,567.00. This is increased by 20% to reflect the higher mileage. It therefore increases to £6,680. That is divided by 51,000 miles, that is to say 3 years at 17,000 miles each, and so a figure of 13 pence a mile excluding fuel is produced.[35]In fact the Respondent did not pay for fuel (whether for personal or business use). As such the benefits of the car to the Claimant is the 5,000 miles of personal mileage at the 13 pence a mile calculated as I have set out above. That gives a benefit value of £650.00 a year.[36]However the Claimant did 12,000 business miles a year (that being her evidence). The RAC table says that for a car with the engine size of that of the Claimant and with petrol costing £1.20 a litre the cost per mile of fuel would be 13.6 pence. That means that in fact the Claimant paid out £1,632.00 a year in business fuel. Consequently the car was not a benefit but in fact cost the Claimant in the region of £1,000 a year. No loss is therefore incurred in this respect as a result of the Claimant’s dismissal. The value of the stakeholder pension Page 7 of 10[37]The Claimant asserts that the Respondent did not set up a stakeholder pension scheme as required. I need make no finding in this respect but I should include in my calculation of her loss the value of the minimum required stakeholder pension contributions for the period covered by her loss. Those contributions would have been as follows. One per cent of her salary falling between the lower and upper earnings limit until 6 April 2018 and 2 per cent for the period thereafter. The Claimant’s earnings between the lower and upper earnings limit were £721.00 per week. Consequently up to and including 5 April 2018 the Claimant’s loss in respect of the pension contributions is £7.21 a week and from 6 April 2018 £14.42 a week. Income from the Claimant’s new business[38]The Claimant had included rudimentary accounts relating to her new business in the hearing bundle between pages 162 and 164. In addition when asked the Claimant said she thought her earnings from her new business venture would pick up steeply towards the end of this year so that by the end of 2018 she would be earning the same as she had been earning prior to her dismissal.[39]The Claimant further explains that in October her earnings had increased by £105.00 a week compared to her earnings in September (the last month for which figures were included in the bundle).[40]The Claimant’s rudimentary accounts showed business expenditure for the period April to September of £639.00. The Claimant agreed that a reasonable assessment for annual business expenditure would be around £1,500.00 on the basis of increasing levels of business.[41]Doing the best I can with the figures provided I estimate that in the 9 months to the end of 2018 when the Claimant’s loss will end the Claimant’s gross income will be the £5,736.50 that she earned to the end of September plus amounts of £1,618.00 in October, £2,300.00 in November and £4,000.00 in December giving a total for 9 months of £13,654.50. If annual expenses are pro-rated then they amount to £1,125.00 for the 9 month period giving a profit for that 9 month period of £12,529.50. The annual equivalent would be £16,706.00.[42]I concluded that the best way to calculate the compensatory loss was to identify an average net income for the Claimant for the period from her dismissal until the end of December 2018. However I needed to establish a net figure rather than a gross figure.[43]The income tax on an annual income of £16,706.00 once a tax free allowance of £11,859.00 had been taken into account would be £969.40. That is calculated at the rate of 20 per cent. On the same profit class 2 and 4 of National Insurance contributions of £898.78 would be payable. That would give a net annual profit figure of £14,837.82 or of £285.34 a week. Conclusions in relation to compensation Notice period and wrongful dismissal[44]The Claimant’s notice period would have run from 12 January and expired on 11 March 2018 which is a period of 8 weeks and 3 days. The net pay was Page 8 of 10 £550.00 a week. The amount due in respect of damages for wrongful dismissal is therefore £550.00 multiplied by 8.428 weeks giving a total of £4,635.40. The Claimant did not earn any amount during this period reducing her loss. Unfair dismissal Basic award[45]The basic award is calculated as follows. The Claimant was aged 49 at the date of her dismissal. As set out above her gross weekly wages was £837.00 and her net weekly wages were £550.00. The relevant statutory cap of £489.00 therefore applies. The basic award is 3 weeks’ pay capped at £489.00 giving a total of £1,467.00. The prescribed elements of the unfair dismissal compensatory award:-[46]Net weekly wages of £550.00 for 18.286 weeks equals £10,057.30 (period 12 March 2018 to 17 July 2018). Less new earnings for that period from 1 April at 15.43 weeks gives earnings of £4,402.80. Gives a loss of £5,654.50.[47]Net weekly wages of £550.00 for 16.857 weeks gives £9,271.35 (for the period 18 July 2018 to 12 November 2018). Less earnings for that period which total £4,809.98 giving a loss of £4,461.37. To be reduced by 75% on a Polkey basis gives a new reduced amount of £1,115.34.[48]The total compensation therefore after the Polkey reduction to 12 November 2018 is £6,769.84. I have increased that amount by 25% to £8,462.30.[49]The total prescribed element is therefore £8,462.30. The non-prescribed element[50]Turning first to the loss of pension rights:-• 12 January 2018 to 5 April 2018, 12 weeks at one per cent gives £86.52.• 6 April 2018 to 17 July 2018, 14.714 weeks at 2 per cent gives £212.18.• 18 July 2018 to 12 November 2018 is 16.857 weeks at 2 per cent giving £243.08.• 13 November 2018 to 31 December 2018 is 7 weeks at 2 per cent giving £100.94.[51]The total amount to 17 July 2018 which is not to be reduced is £298.70. Page 9 of 10[52]The total amount from 18 July 2018 which is to be reduced on a Polkey basis by 75% is £344.02 which reduces to £86.01 which gives a total pension loss of £384.71. Future loss of wages[53]7 weeks from 13 November 2018 to 31 December 2018 is £3,850.00. Less profit from the new business, 7 weeks at £285.34 gives £1,997.38. The loss therefore for this period is £1,852.62. Reduced on a Polkey basis by 75% gives £463.16.[56]Add in the pension amount of £384.71 gives a new total of £847.87.[57]The net amount is increased by 25% as I have found above that it should be the total is £1,059.83. The total compensatory award that the Respondent is ordered to pay is therefore £8,462.30 plus £1,059.83 giving £9,522.13.