Mr M Khandhia v KWC Garments Ltd: 2600980/2019
JUDGMENT
Employment Tribunals Rules of Procedure 2013 – Rule 21[1]The respondent has made an unauthorised deduction from the claimant's wages and is ordered to pay the claimant the gross sum of £2190.[2]The claimant was dismissed in breach of contract in respect of notice and the respondent is ordered to pay damages to the claimant in the sum of £375.84.[3]The respondent has failed to pay the claimant’s holiday entitlement and is ordered to pay the claimant the sum of £526.18.[4]The hearing listed on 30 September 2019 is cancelled.REASONS
[1]The Claimant has attended but has been represented throughout by his wife, Mrs Mehzabin Khandhia, who has indeed looked after this case from the start completing as she did the Claim Form (ET1) and undertaking all the correspondence prior thereto and indeed subsequently. Doubtless, that is because Mrs Khandhia speaks good English whereas her husband does not. That is why I have been assisted by an approved interpreter, Mrs Usha Kanani, for the purposes of him following the Hearing. The Respondent has been represented by the sole Director, Mr Faisal Ali. Also attending was Mr Javid Vadiwala who, as I understand it, is a supervisor and has been with the business for two years.Introduction
[2]The claim (ET1) was presented to the tribunal on 31 March 2019. As I have already said, it was presented by Mrs Khandhia. The Claimant has previously gone to ACAS for the purposes of early conciliation and the certificate was attached and the claim was in time.[3]As to the claim, there was sufficient narrative to clearly understand what it was about. It was first a claim for failure to pay the national minimum wage. Set out was how the Claimant, post his employment with the Respondent as a garment maker on 23 July 2018 and up to the end of his employment circa 26 January 2019, had only ever been paid at the rate of £5.50 per hour. Incidentally, it is agreed between the parties that he worked 24 hours a week. Also set out was that he had never had a payslip or indeed a P45. It was pleaded how he persistently sought to receive his minimum wage payments and increasingly was met by hostility, including threats and abuse from the Respondent and in particular the Respondent’s Managing Director Mr Ali and his father, who I gather has taken a back seat in the business having resigned as a Director in January 2018.[4]Then set out was how the Claimant sought to exercise his right to paternity leave under the Paternity and Adoption Leave Regulations 2002. I have received further clarification on that point today, and it is to the effect that he needed to have that leave because his wife was going to have a caesarean and so he would need to be at home for two weeks.[5]It seems to me on the law on that particular point that in fact given the length of the employment, that as the expected date of the arrival of their second child via the caesarean was 21 December 2018 that he actually would not have had the right to paternity leave. He would have needed to have started the employment on 6 March 2018. But as per the protection from in essence victimisation in terms of seeking to exercise a statutory right as to which by way of example see s104 of the Employment Rights Act 1996, he only has to genuinely believe that he has the right. He thought he did because he had exercised it with the birth of his first child in his previous employment. Not clear until today was that in that employment, he had served more than two years.[6]The point is that as long as he genuinely believed that he had the right, if he was then detrimentally treated in respect thereof, that would be a breach of protection rights. So, the second limb of the claim became as pleaded in the Claim Form that he had been detrimentally treated thereafter because the aggressive treatment of him to which I have referred intensified.[7]Matters came to a head when the Claimant in frustration gave verbally two weeks notice. He also wanted his outstanding wages. He went along on Saturday 26 January (which is a day he would normally work) and asked for his wages, having made plain that he was going to give notice. According to the Claimant, matters then became violent, spilling out into the car park outside and was thence witnessed by his wife and the threats continued.[8]Against that background, the Claimant brought four claims to the tribunal, which were as follows:8.1 Failure to pay notice pay, which was said to be two weeks.8.2 Failure to pay holiday pay on the basis that the Claimant never received any.8.3 A breach of the Paternity and Adoption Leave Regulations 2002 and in that sense a claim of two weeks’ pay.8.4 Two parts to a claim for unpaid wages, namely no payment for the last five weeks of the employment or thereabouts and, secondly, under payment throughout (including the last payment) viz the national minimum wage.[9]In that respect, the claims were quantified for a total of £3,092.02 in the schedule sent in to the tribunal by Mrs Khandhia received on 15 July 2019.[10]By that time, there had been no defence (ET3) presented to the tribunal. The claim had been issued out to the Respondent by way of the correct name and address on 31 May 2019 with a requirement that a Response be filed by 28 June 2019, absent which a judgment (known in common parlance as a default judgment) would be issued. There was no Response received or any application to extend time and thus having received the schedule of loss on 23 July 2019, this Judge signed off a default judgment for the sums claimed and that was sent out to the parties on 24 July 2019.[11]On 9 September 2019, so well outside the usual period to apply to set aside a default judgment (which is 14 days from the sending out of the default judgment), the Respondent applied for what I will describe as a revocation. In other words, it wanted the judgment set aside. The application included an explanation for why it was late, a completed Response Form and a detailed setting out of the merits of the defence. Essentially Mr Ali was submitting that he could not attend to dealing with the claim when received as he was on business in China.[12]The Claimant, via Mrs Khandhia, objected. In due course Mr Ali supplied the proof of payment and booking with Emirates for his flights to China, showing he departed the UK on 27 May and flew to Guangzhou in China, He remained there until he flew out on 20 August 2019 returning to the UK on 21st. He also produced invoices, which I realise are there to show the extend of the amount of business he was doing during that period in China.[13]Stopping there, he has explained to me today that his family has done business with the Chinese for many years. Indeed they have a flat in Guangzhou; and so he goes out for that extensive period of time and conducts his business with the Chinese and also in the sense of emails and checking up on the business is able to do that whilst in China by for instance contacting the supervisor (who I have referred to) or his accountant who will go into the business on Saturdays.[14]As to why he did not deal with this matter immediately upon his return suffice it to say that he explained that he had many business activities to deal with.[15]Mrs Khandhia on behalf of her husband, was cynical about that and, amongst other things, required him to supply his passport. Employment Judge Heap gave directions in this matter, and although she did not spell out the issue of the passport, she acknowledged the correspondence prior thereto and made plain that each party was required to produce documents it relied upon to the tribunal and most importantly, make sure that copies had been sent to the other side prior to today. She made plain that the Judge presiding today would primarily be focussing on the application to set aside the judgment.[16]It is however correct that as the Judge who made that default judgment it is therefore me that has to determine this application pursuant to sections 70 – 72 of the Employment Tribunals Rules of Procedure 2013, Schedule 1. In doing so I can in deciding where the interests of justice lie, weigh in the balance if necessary the merits of in particular the Response.[17]The last thing to point out, which has become relevant today, is that Mrs Khandhia wrote in to the tribunal on 22 October 2019, copying the Respondent, that she believed that the only reason why there had been a late Response submitted was because she had by then enlisted the services of the Penalty Office of the Government and filled in the forms, had her application acknowledged and been told that if there had not been payment by the due deadline of 4 October a penalty would be levied. Thus she believed that the Respondent only contacted the tribunal when they did because by then the Penalty Office had been in contact with them making it plain that he risked substantial financial penalty for non-payment on top of the amount awarded by the tribunal.[18]On that point, it is obvious that he must have contacted the Penalty Office because they replied to him on 4 October, noting that he had applied to the tribunal to set aside the judgement and therefore he was to keep them informed of developments.[19]That acknowledgment is of course almost a month after his application to the tribunal, but it does not assist me at all as to when he was first contacted by the Penalty Office or, more importantly, as to when he first contacted them.[20]So back to the email copied to him by Mrs Khandhia on 22 October and he cannot but have been on notice that this would be an issue today.[21]That then brings me to the period after he returned to this country and before he put in the Response. He has made plain to me that it had nothing to do with the Penalty Office and he does not think that they had contacted him before he put his application in to the tribunal on 9 September. So, I have got a period of about two weeks. The Respondent lives in Leicester, as does his family, so I appreciate he might wish to visit his grandmother on one or two occasions in hospital and would want to see his family; but on the other hand, he is the only Director in this business and he is clearly very hands on. He has no backup support staff at all at the premises, although it seems he employs about 15 people. However, the Claimant does not accept that and says he has many more people than that working for him and I do notice that the list before me today suggests more than fifteen.[22]However, going back, if Mr Ali was in contact, as he would have to be running this business from China but with 15 employees at least back in Leicester; with all the orders to deal with; the purchasing of supply materials etc and with an accountant going in on Saturdays he says but only to open post for him marked urgent, that nevertheless one would have expected that during that period the accountant would have been opening the post addressed to the business rather than simply leaving what seems to have been very large pile.[23]Then there is the issue of once he was back in the country, by then of course the judgment has been issued. That goes out in an envelope which makes it very clear that it is urgent and important. This is of course because inter alia interest starts to run from 28 days from the issue of said judgment and also because of timelines for such as appealing which are set out in the accompanying notice. Of course, as we now know, not to pay the same can incur an additional penalty of up to £5,000 from the Government. So, it is apparent misfortune, is it not, that first of all the accountant, who seems to have been very involved indeed on such things as payslips, advising Mr Ali on the Paternity Leave Regulations, or dealing with such things as contracts of employment, did not open not only the first letter but the second.[24]Then of course that brings in the penalty notice issue. Is it just a coincidence that a defence was put in in this case after Mrs Khandhia has clearly been in contact with the Penalty Office?[25]Stopping there, I do not have the passport to verify that this was a continuous stay in China. I do not have the accountant here to deal with such as opening the post and contact with Mr Ali when the latter is in China although the latter said to the tribunal in the run up today that he would be bringing him. As to the employee he has brought along, he cannot help me. He has nothing to do with payroll and office administration.[26]That brings me to the merits. I have already observed that the Claimant’s paternity leave claim prima facie would not get off the ground because of the qualifying requirements.In that respect I am correcting the issued judgement given that has today become apparent and is accepted by the Claimant and Mrs Khandhia. Next Mr Ali is saying he always supplied payslips. On the other hand, I have Mr and Mrs Khandhia, who I found honourable people, who say they never saw any payslips until today. Then there is the issue of that the records that have been shown to me today by Mr Ali do show that some of his staff, three or four including the Claimant during the period he was employed there, were paid in cash, others were not. He says that is because Mr Khandhia wanted paying in cash. Mrs Khandhia was very clear indeed today, as per her statement to which I have referred, that they have always had a bank account. The previous employer always paid by BACS and always produced payslips, which is why they wanted to be paid into the bank, which would inter alia show their credit worthiness and also why they wanted payslips.[27]As it is, it has turned out today that the Claimant is in any event owed for five weeks’ wages because he was not paid for the last period of work. It is now accepted by Mr that he is due £924.30. As to the notice pay, the Claimant in law would only be entitled to one week’s statutory notice because of the length of employment. If he is correct and he offered two weeks notice, but Mr Ali did not want that and said he could go now, then he is owed one week. Mr Ali, to get rid of that issue without getting into the merits one way or another, was today initially prepared to pay the notice pay, which would be £187.92 but then rowed back in relation to events on 26 January.[28]There of course is also the issue of whether or not the Claimant was in fact paid at the national minimum wage rate. If the record that Mr Ali showed me today is correct, then even though the Claimant was being paid cash, which in itself is not in dispute, he was paid the correct amount having regard to the hours worked and the prevailing national minimum wage. This is categorically denied by the Claimant and Mrs Khandia . So it can be seen that there is a major conflict on that issue and also in terms of what happened on 26 January and in that sense who actually terminated the employment contract and therefore whether in fact notice pay is actually due.[29]What it means is that in any event, Mr Ali will concede that he does owe 5 weeks’ wages at £924.30.[30]As to the rest, there clearly are major issues of conflict.[31]I should make plain that I cannot amend the current particulars of claim to bring in claims of detrimental treatment and automatic unfair dismissal by reason of having sought to exercise a statutory right in relation to being paid the minimum wage and receive payslips etc and the application viz the paternity leave regs. That is because having been to ACAS, Mr and Mrs Khandhia did seek legal advice and ended up with Bond Adams LLP, solicitors. They were advised that because he had only got about six months’ service that he could not bring any such claims and of course to bring them, he has to show it was not reasonably practicable to bring them before now, which would in effect be an application to amend but the issue would have to include time limits. The problem is that the lawyer’s wrong advice is fatal because it was wrong. It means that I cannot, even if the Claimant wished to pursue such an application, amend the said claims.[32]So, it is back to whether or not I grant the application to rescind. I do bear in mind that Mr Ali is a one-man band in many respects in running this business. He is clearly very busy indeed. He has no secretarial staff but I have referred to the accountant coming in on Saturdays. Having heard from Mr Ali, and I make clear that I found him less credible than Mr and Mrs Khandia, and taking account of events as I have found them to be and the timing of the application to revoke, I am not persuaded that Mr Ali could not have dealt with this matter more promptly that he did and particularly after returning to the UK. He could have produced evidence today showing when he was first contacted by the Penalty Office to rebut the inference raised by Mrs Khandhia. This was not done. Therefore, I am persuaded by the evidence of Mrs Khandhia; I found her very believable on this point. She has come along with a lot of paperwork, such as emails, which tends to lend support to her case and which reinforces her credibility as opposed to that of Mr Ali.[33]Therefore, weighing the scales of justice, I come to the conclusion on a balance of probabilities that I prefer that the only reason that Mr Ali defended this case when he did was because of the risk of a penalty from the Penalty Office. I conclude that but for that, he would have done nothing.[35]Therefore, I have decided to refuse this application for revocation and it follows that the existing judgments of the tribunal remain, apart from that based upon the Paternity and Adoption Leave Regulations 2002 .