Miss Janine Andrews v Drs Penwill and others: 3200880/2017 and 3200966/2017
JUDGMENT
[1]The Claimant’s claim for breach of contract in respect of her notice pay is dismissed. The Claimant was not entitled to £3,032.21 in respect of the balance of her notice pay as she was in breach of contract in respect of making overtime payments to herself to which she was not entitled.[2]The Claimant’s claim for breach of contract in respect of £1,049.61 is dismissed as she was not entitled to overtime.[3]The Claimant’s claim for breach of contract in respect of unpaid holiday relating to her notice pay in the sum of £1,749.35 is dismissed as the Claimant’s contract of employment was terminated with a payment in lieu notice and the effective date of termination was 25 April 2017.[4]The Respondent’s counterclaim in respect of £3,827.99 being an advance on the Claimant’s 12 weeks’ notice pay is successful and the Claimant is ordered to repay the Respondent £3,827.99. The Claimant was in breach of the implied term of trust and confidence in respect of paying herself overtime to which she was not entitled and the Respondent was entitled to dismiss the Claimant for gross misconduct on 25 April 2017.[5]The Respondents counterclaim in respect of the payments made by the Claimant to Michelle Hubbard in the total sum of £7,013.03 is not made out and is dismissed.REASONS
Background and Issues The Claimant in her claim form made the following claims: –[1]A claim for breach of contract in respect of deductions made from her notice pay in the sum of £3,032.21.[2]A claim for breach of contract in respect of unpaid overtime in the sum of £1,049.61.[3]A claim for unpaid holiday pay in the sum of £1,749.35. The Claimant asserted that because there was no payment in lieu of notice clause in her contract of employment, the Respondent should pay her accrued holiday pay for the duration of the 12 week notice period in spite of the fact that her contract of employment was terminated on 25 April 2017 with immediate effect and she was not required to work out such notice.[4]In response to these claims, the Respondent asserted that it became aware following the Claimants dismissal that the Claimant was guilty of a fundamental breach of her contract of employment in respect of payments of unauthorised overtime to herself between November 2016 and April 2017 and significant overpayment to the finance officer, Michelle Hubbard, throughout her six month fixed term contract from November 2016 to March 2017. This conduct the Respondent asserted justified summary dismissal and the Claimant was therefore not entitled to any payment in lieu of notice. Further, or in the alternative, the Respondent was entitled to set off the unauthorised payments the Claimant made to herself between November 2016 April 2017 against the Claimants notice payment and no further sums were due to the Claimant in respect of her notice period. The Claimant was paid £3,827.99 as an interim payment towards her notice pay whilst investigations were carried out after the Claimant was dismissed. This was in excess of the monies outstanding to the Claimant which were either nil or £3,808.6 21 once the unauthorised overtime figure was offset against the notice payment.[5]The Respondent asserted that the Claimant had no valid claim for holiday pay. She was paid all her outstanding holiday entitlement at the conclusion of her employment. Her claim for holiday pay was confined to holiday which she said she would have accrued had she remained employed for her 12-week notice period. The Claimant accepted that as a matter of fact, her employment was terminated with immediate effect on 25 April 2017.[6]The Respondent also asserted that the Claimant was not entitled to payment for further overtime she asserted she worked in April 2017. The Respondent asserted that the Claimant was not authorised to claim overtime for this period and that as this was not authorised she should not be paid it.[7]The Respondent brought counterclaims against the Claimant in respect of rules 23 to 25 of the Employment Tribunal’s Constitution and Rules of Procedure Regulations 2013 (‘the Regulations’). The Respondent claimed the following:[8]Following her dismissal, the Respondent became aware that the Claimant was guilty of a fundamental breach of contract in respect of payments of unauthorised overtime to herself and to the finance officer Michelle Hubbard. This conduct justified summary dismissal and the Respondent was entitled to recover the notice monies paid to the Claimant at the time of dismissal being £3,827.99.[9]In breach of the implied term of trust and confidence, the Claimant made a number of payments to the finance officer Michelle Hubbard totaling £7,013.03. The Respondent asserted that the Claimant was aware that she did not have authority to make these payments to the finance officer and in so doing acted in breach of the implied term of trust and confidence. The Respondent therefore made a counterclaim for breach of contract against the Claimant in this sum.[10]The Tribunal at the outset of the hearing established from the Claimant that she was proceeding with the claim for breach of contract against the Respondent in respect of the claims for the failure to pay her the remainder of her notice pay, unpaid overtime and unpaid holiday entitlement. As the Claimant asserted that she was the Respondent was entitled to make a counterclaim against the Claimant pursuant to rule 23 to 25 of the Regulations. The Tribunal also noted that although the Respondent had raised a counterclaim against the Claimant in its response form, the Claimant had not formally lodged a defence to that counterclaim pursuant to the rules. This was a procedural irregularity. However, an adjournment of the hearing for the Claimant to lodge a defence was not in the interests of justice as the overriding interest was to proceed with the case and both parties indicated that they wished to do so. There had been a substantial delay of over two years whilst the police investigated the Respondent’s complaint against the Claimant which was eventually not proceeded with. Furthermore, the Claimant was aware of the counterclaim in the response form and was ready to deal with it at the hearing. As a consequence, the Tribunal proceeded with the hearing to deal with the Claimants claims for breach of contract and the Respondents counterclaim against the Claimant.[11]The Tribunal had before it two loose-leaf binders of 649 pages that constituted an agreed bundle of documents. In addition, the Claimant produced a written witness statement. The Respondent called three witnesses, Sarah Clark who was employed by the Respondent as the data manager, Dr Sian Stanley and Dr Rosemary Davies. All of these witnesses produced witness statement and were subject to cross-examination. The Respondents counsel produced a skeleton argument which the Tribunal took note. The Tribunal also had the opportunity of asking questions.Facts
[12]The Respondent partnership is a GP surgery comprising 40 staff. As is common with a GP practice, the practice is owned by the partners funded by the NHS. In the practice the partners act as an executive board with each partner having individual responsibilities for aspects of the practice. At the relevant time of the Claimant’s employment the practice had monthly meetings to discuss both operational and strategic planning. The practice manager was expected to attend all the practice meetings. The practice manager’s role was to act as a conduit between the executive board and the nonclinical staff. The doctors focused on the clinical duties whilst continuing to have responsibility for the overall management of the practice and the staff. It was necessary to trust the day-to-day management of the practice to the practice manager namely the Claimant. The practice partners gave instructions to the practice manager through monthly meetings and through verbal and written instructions. The practice manager namely the Claimant was responsible for paying all employees and had responsibility for payroll. The Respondent required the practice manager to have the highest levels of probity and integrity and expected the practice manager to act in such a way that trust and confidence was integral in her duties. Having said this, the practice manager had power to enter in to contractual relations on behalf of the Respondent and was responsible for hiring staff. In this role, she was responsible for hiring Michelle Hubbard who was the finance assistant.[13]The Claimant was employed by the practice with effect from 28 September 2015 until 25 April 2017 at which time her employment was terminated with immediate effect with an advance in respect of her notice pay of £3.827.99. The effective date of termination was 25 April 2017 and the Claimant was paid all her contractual entitlements including holiday pay up to this date. The Claimants contract of employment was at pages 61 to 63 of the bundle of documents. The contract was signed by the Claimant on 5 November 2015. The Claimant was the most senior and highest paid member of nonclinical staff at the relevant time earning £40,000 per annum. As such she was paid as a salaried employee rather than an hourly paid employee in contrast to all nonclinical staff to account for the fact that she needed to work over and above her basic hours. Overtime was stated to be remunerated at the normal hourly rate or time maybe taken off in lieu if staffing levels permitted. The Respondent gave evidence that overtime had to be authorised by the partners and if not, the Claimant would take time off in lieu. The Claimant’s basic hours were stated as being between Monday to Friday from the hours of 8:30 am to 5 pm.[14]The Claimant as part of the discovery process in these proceedings produced what she stated were time records from the commencement of her employment until the termination of her appointment which were at pages 576 to 600 of the bundle of documents. These timesheets the Claimant confirmed were emailed by herself to herself and were not documents presented to the Respondent. The Claimant stated that the originals of these documents were left by herself in her office. The Respondent disputed that any such timesheets were in the Claimant’s office and disputed the veracity of these timesheets during the hearing. The Claimant confirmed to the Tribunal that she did not provide these timesheets to the Respondent during the course of her employment and only did so during the discovery process. She said that she had prepared these timesheets as a record for herself and not for the Respondent. The Tribunal doubted that these timesheets were an accurate record of the Claimant’s timekeeping. In addition, the Tribunal was confused as to why the Claimant would prepare these timesheets and not to give them to the Respondent at the relevant time. It seemed strange to the Tribunal that the Claimant would prepare timesheets for her own benefit and not to agree them with the Respondent. The timesheets showed various times over and above the Claimant’s standard hours for which the Claimant stated she was entitled to overtime. It appeared that the Claimant had accrued additional time above her contractual hours almost from the outset of her employment and which she was carrying over on a monthly basis. It did not appear that the Respondent gave prior authority to the Claimant for working such overtime from the commencement of her employment. It was accepted by the Claimant that she did not receive any payment of overtime from September 2015 to July 2016. It appeared to the Tribunal that the Claimant was using this information just for own purposes to note the time that she worked and the additional hours that she would have been entitled to time off in lieu as she was very well aware that she could not claim overtime unless it was authorised. During evidence, the Claimant confirmed that part of her claim relating to overtime of £1,049.61 related to an estimate of what she thought was fair for the Respondent to pay her for the month of April 2017 being her last month of service. Indeed, most of the payments of overtime that the Claimant paid herself were estimates of what she thought were fair estimates of overtime that the Respondent should pay her from October 2016 to April 2017. As the person who controlled the payroll for the Respondent the Claimant paid herself overtime for this period.[15]The Claimant expressed to the Respondent that her workload required additional staffing. In October 2016, the Respondent gave unanimous approval to the Claimant to employ a finance officer. The Claimant recruited Michelle Hubbard who was previously a colleague of hers and who she knew could undertake the duties of a finance officer. The partners gave authority to the Claimant to hire Miss Hubbard in respect of this position. The minutes of the practice management meeting on 20 October 2016 were at page 124 and at page 126 showed that the Respondent gave the Claimant permission to hire a finance officer for 20 hours per week initially on a six month contract. Miss Hubbard’s contract was at page 75 showing the that she was employed on 1 November 2016 initially working 20 hours per week at a basic hourly rate of £15 per hour. The contract was not signed at page 82 but at page 83 there was a contract amendment letter which was signed by Miss Hubbard. The amendment letter stated that Miss Hubbard’s employment commenced on 1 November 2016 with a basic hourly rate being £15 per hour and the hours being 24 hours per week namely Tuesday, Wednesday and Thursday being eight hours per day. The amendment letter also confirmed that overtime would be paid as and when it was agreed by the practice manager.[16]During the course of these proceedings, the Respondent asserted that Miss Hubbard had been overpaid certain payments relating to 8 hours work on 26 October for £120 gross, work undertaken between November 2016 and April 2017 being at the rate of 24 hours per week instead of 20 hours per week for £1,560 gross, two payments made through the payroll for £1,597.50, three payments made between November 2016 January 2017 into Miss Hubbard’s bank account not through the payroll for £1,496.78 and a payment in March 2017 directly to Miss Hubbard’s bank accounts not through the payroll for £2,238.75 . The total amount of these payments was £7,013.03. The Respondent asserted that the Claimant did not have authority to make such payments. The Respondent asserted that the making of such payments was in breach of the implied term of trust and confidence in the Claimant’s contract of employment and therefore asserted that the Claimant should be required to repay in these sums made in breach of contract. The Tribunal noted that there was an amendment letter and page 83 of the bundle of documents which was signed by the Claimant and Miss Hubbard. The Claimant had authority to bind the Respondent in terms of hiring staff and indeed it gave authority to the Claimant to hire Miss Hubbard. The Tribunal could find no evidence to suggest that the contract amendment letter at page 83 was a forgery. Miss Hubbard was not in attendance to give evidence or be cross examined in respect of these payments and the legality of them. Miss Hubbard’s case was joined with that of the Claimant in these proceedings but Miss Hubbard withdraw her claim before this hearing. In the absence of evidence in this regard from Miss Hubbard and in the absence of any properly prepared forensic accountant report from the Respondent in respect of these alleged overpayments, the Tribunal was not in a position to determine whether the payments were correctly made and or whether the amounts were correctly stated. In this regard, the Tribunal was not in a position to properly verify the alleged overpayments made by the Claimant to Miss Hubbard.[17]From October 2016 the Respondent requested the Claimant specifically prepare a separate staff overtime payments sheet so the Respondent could ascertain payments being made to their staff in respect of overtime. The Claimant confirmed that she would do this but indeed she never did this up until the time of her dismissal or subsequently. The Claimant asserted that she was too busy to undertake this task but the Tribunal did not accept this evidence. The Claimant gave evidence to the Tribunal which was not accepted that the Respondent had easy access to this information. The Tribunal accepted the evidence of the Respondent that the accounts information as shown on its systems was not clearly stated in respect of overtime. The Claimant asserted in evidence that she had at various times discussed her overtime with the Respondents and that it was authorised. The Respondent through its witnesses confirmed that this was not the case. The Respondent gave evidence which the Tribunal accepted that the Respondent approved overtime for the Claimant in respective two extraordinary events during the summer of 2016 namely a clinical system change (July 2016) and a CQC inspection (September 2016). Additional funding to help with the costs of the computer system change over that period was provided by the clinical commissioning group so that the practice had no issue authorising staff overtime for these events. The Claimant confirmed that overtime was authorised in respect of these two matters. She went on to say that overtime was authorised by the Respondent after this extraordinary approval but the Tribunal did not accept her evidence. It appeared to the Tribunal that in addition to authorising overtime for herself from July 2016 she continued to authorise overtime for herself beyond this amount equating to £3,032.21 gross for some 130 hours worth of additional overtime which had not been authorised by the Respondent.[18]By 4 April 2017, the Claimant had still failed to produce a breakdown of overtime costs to the Respondent. As a consequence of the Respondents concerns about the escalating expenditure and overtime payments being made, Dr Davis and Dr Penwill dismissed the Claimant on 25 April 2017 after a short meeting. The handwritten note was at page 247 of the bundle. The Respondent had taken legal advice concerning its concerns about grave financial irregularities and potential overpayments. The Respondent was advised that to limit damage to the practice and given its concerns, the Claimants employment should be terminated immediately. The advice that it received was that there was only exposure for breach of contract claim due to the Claimant’s length of service. The advice provided confirmed that the Respondent could take the decision to dismiss the Claimant with immediate effect with an intention to pay the Claimant 12 weeks in lieu of notice together with any other payments due to her. As it transpired, the Respondent paid the Claimant an interim payment of £3827.99 in respect of her notice pay with the rest to follow pending the outcome of further investigations.[19]The Respondent by letter of 9 May 2017 which was at page 294 of the bundle wrote to the Claimant to confirm the decision to terminate her contract of employment with immediate effect with a payment in lieu her contractual notice. The termination date was stated as 25 April 2017. The letter of dismissal confirmed that the Claimant had claimed for overtime to which she was not entitled and confirmed that the Respondent reserved the right to deduct from the payment already made to her in lieu of notice any overpayments that the Claimant had made to herself in respect of unauthorised overtime.[20]The Respondent subsequently on 8 May 2017 reported the financial irregularities to the police in respect of potential fraud and theft on the part of the Claimant and Miss Hubbard. Both the Claimant and Miss Hubbard were interviewed under caution after a substantial delay in the investigation. The police eventually concluded that they could not take the matter further having regard to the burden of proof required for a successful prosecution in the criminal courts on 7 June 2018 summarizing the position which was at page 410 to 411 of the bundle of documents. These Tribunal proceedings were stayed pending the outcome of the police investigation and a two day hearing took place at the East London sitting centre on 21 and 2 March 2019.Law
[21]Pursuant to the Employment Tribunal’s Extension of Jurisdiction (England and Wales) Order 1994, an employee is entitled to make a claim in the employment Tribunal for recovery of damages in respect of breach of contract relating to outstanding notice, wages and holiday pay owed to the employee at the termination of employment.[22]The statutory cap in respect of breach of contract claims outstanding on the termination of employment is currently £25,000. If an employee has bought a breach of contract claim pursuant to this order, an employer can make a counterclaim against the employee in respect of the employee’s alleged breach of contract. Such a breach of contract claim cannot relate to imposing an obligation in respect of living accommodation, relating to intellectual property, imposing an obligation of confidence or in relation to a restraint of trade. The above exclusions do not apply to the obligation of trust and confidence implied in every contract of employment (Wright v Weed Control Ltd 2008 UKEAT-0492). Tribunals Conclusions[23]With regard to the Claimants claim for breach of contract relating to a deduction made from her notice pay in the sum of £3032.21 the question for the Tribunal was whether the Claimant was entitled to claim overtime and had authority to claim. The only evidence before the Tribunal in respect of overtime was the timesheets that the Claimant produced in the bundle of documents which the Tribunal noted had only been produced during the discovery process of these proceedings. An analysis of the timesheets showed that it was not a record of overtime but a record of all of the time the Claimant allegedly did over and above the contractual hours that were stipulated from the commencement of her employment. Indeed the timesheets that the Claimant produced as part of the discovery process included all time some of which was not properly chargeable to overtime in the first instance such as attending partners meetings in the evenings. It appeared that the Claimant had noted down all the time that she undertook on the Respondent’s work be it chargeable to overtime or not. The Tribunal viewed the Claimant’s exercise in the preparation of the time sheets as a ‘guesstimate’ and nothing more. Furthermore, the Tribunal was bemused by the Claimant emailing the timesheets to herself and not during the course of her employment disclosing them to the Respondent. If it was true that the Respondent had authorised the payment of overtime as asserted by the Claimant, the Tribunal would have expected her to have disclosed these timesheets and had them authorised. The fact that she did not indicated to the Tribunal that she knew very well that the overtime was not authorised. This was also supported by the fact that the Claimant paid herself what she thought was fairly owed to her in respect of overtime. The Tribunal did not think it was her role to pay herself what she thought was fair.[24]The Claimant accepted that she did not claim or receive overtime payments until the summer of 2016. The Respondent gave evidence which was accepted by the Tribunal that it gave extraordinary permission to the Claimant and others to claim overtime in respect of two matters under system one and the CQC visit. The Claimant from her timesheets claimed some overtime in respect of these two matters when she did in fact work overtime. However, her timesheets showed that she recorded other overtime well beyond the summer and up to the date of the termination of her employment in April 2017. It appeared that the Claimant paid herself overtime throughout this period for work done for the two extraordinary events but also for overtime that she felt was due and owing to her. It appeared that she received no authority to pay herself for these amounts and indeed during evidence she confirmed that she charged the Respondent what she felt was reasonable and fair. The Tribunal would have expected a practice manager of the Claimant’s experience to have gained written authority from the Respondent to claim overtime and simply not pay herself what she deemed to be fair.[25]The Claimant was subject to the implied duty of trust and confidence and good faith in her contract of employment and the Tribunal accepted the Respondent’s evidence that as the most highly paid non-clinical member of staff in the practice, it expected the Claimant to act with a high level of probity and good faith. It appeared to the Tribunal that the Claimant fell well below these standards in respect of payment of overtime to herself. It seemed to the Tribunal that she determined what she herself should be paid and received no authority from the partners in this regard. As a consequence, the Tribunal concluded that the Claimant was not entitled to claim the balance of her notice period in the sum of £3032.21 as she had acted in breach of the duty of trust and confidence. Had the Respondent had the information that it had at the time of the Claimant’s dismissal following its subsequent investigation into the Claimant’s misconduct following her dismissal, the Respondent would have been justified in dismissing her for gross misconduct on the 25 April 2017 with immediate effect without any payment of notice. Therefore, the interim notice payment paid to the Claimant of £3827.99 should be repaid to the Respondent by the Claimant as she was not lawfully entitled to it. In this regard, the Claimant was in breach of contract and the Respondent’s counterclaim in this regard succeeds.[26]With regard to the Claimants claim for unpaid overtime for April 2017 in the sum of £1049.61, this breach of contract claim is dismissed. The Claimant accepted in evidence that the claim for 45 hours was not actually based upon any exact overtime that she had undertaken nor was that overtime authorised. It appeared to be a ‘guesstimate’ of what the Claimant deemed to be fairly due to her based upon her own assumptions. Therefore, this claim was dismissed.[27]With respect to the claim for unpaid holiday pay for the 12 week notice period commencing 25 April 2017, this claim was legally misconceived. The Claimant’s effective date of termination was 25 April 2017. She was not entitled to any accrued holiday pay during the 12 week notice period as her effective date of termination was 25 April 2017 which was stated to be with immediate effect by the Respondent in its letter of dismissal. The letter confirmed that she was not required to work out her notice. Had the Claimant been required to work out her notice she would have accrued holiday entitlement during the notice period. As this did not happen, the Claimants claim for holiday pay was dismissed.[28]With regards to the counterclaim made by the Respondent against the Claimant in respect of the sum of £7013.03 relating to unauthorised payments to Michelle Hubbard, the Tribunal was not satisfied by the evidence produced by the Respondent. The Respondent produced no forensic accounting report and Miss Hubbard was not in attendance to give evidence as to the nature of the payments, the authority that was sought and or given and whether any partners had authorised payment. Furthermore, the Tribunal noted that the Claimant and Miss Hubbard had signed an amendment to the contract of employment at page 83 which confirmed that the Miss Hubbard was entitled to claim overtime and also confirmed that her contractual hours have been increased from 20 to 24. The Claimant was authorised by the Respondent to enter into contractual relationships and hire staff for the practice and it seemed to the Tribunal that this appeared to be a valid variation of Miss Hubbard’s contract of employment. Without hearing further evidence from Miss Hubbard in terms of her extra hours and overtime, the Tribunal was not satisfied that the Respondent was able to substantiate its counterclaim against the Claimant in this regard. Accordingly, that this aspect of the counterclaim was dismissed.