A Bigby v Forest Circuit of the Methodist Church: 3201253/2024
EMPLOYMENT TRIBUNALS
Case No 3201253/2024
Between
A BigbyClaimantForest Circuit of the Methodist ChurchRespondent
Before
Employment Judge FarrallIn person for claimantMs Sheerin (instructed by Counsel) for respondentDate 14 April 2025
JUDGMENT
[1]The complaint of unfair dismissal under Part X Employment Rights Act 1996 is not well-founded and is dismissed.[2]The complaint of unauthorised deduction from wages, of half the Claimant’s salary from her final pay in March 2024, is not well-founded and is dismissed.[3]The complaint of unauthorised deduction from wages in terms of loss of employer pension contributions and lost interest on pension is well-founded and succeeds.
REASONS
[1]I apologise for the adjournment of the hearing on 22 November 2024 and for the delay in promulgating this judgment, which were for reasons that I have explained in separate correspondence to the parties.[2]By an ET1 claim form presented on 29 May 2024, after an ACAS early conciliation period between 14 March 2024 and 25 April 2024, the Claimant brought complaints of unfair dismissal and unauthorised deductions from wages. The Claimant claims that her dismissal was unfair as it was not a genuine redundancy situation and that the decision to dismiss her was a motivated by her complaints about salary and pension. The Claimant also claims that the Respondent made an unauthorised deduction to her final pay of half the amount owed. She further claims that the Respondent’s delayed enrollment of her in the pension has caused her financial loss in terms of the interest which would have been accrued.[3]In its ET3 the Respondent states that the dismissal was for redundancy reasons, that this was a genuine redundancy situation and that the process was fair. The Respondent also states that the Claimant was paid up until her leaving date, 15 March 2024, which is halfway through the month and accounts for the final sum paid being half the normal amount. The Respondent accepts that there have been historic errors in relation to the Claimant’s pay and pension but submits that the Claimant was eventually enrolled in the pension scheme, with backdated contributions and has been compensated for any loss. In any event the Respondent submits that pension payments are not wages as a matter of law.
Issues
[4]The issues for me to decide are as follows:[5]Was the redundancy situation genuine?[6]Did the Respondent conduct a fair redundancy process?[7]Was the Claimant’s final pay for her last month unlawfully reduced by half?[8]Does the loss of interest on the Claimant’s pension amount to unauthorised deduction of wages?
The Hearing
[9]The hearing took place in person. I had regard to the hearing bundle, comprised of 225 pages, and a 45-page bundle of pay slips, which was provided by the Respondent during the hearing.[10]I heard evidence from the Claimant and Reverend Long on behalf of the Respondent.[11]At the conclusion of hearing evidence, each party made oral closing submissions.[12]There was a fire alarm in the afternoon and so the hearing was adjourned for me to deliver oral judgment via CVP on 22 November 2024. Unfortunately, this hearing was adjourned for reasons previously explained and judgment was reserved. I apologise again to the parties for the delay. Relevant Findings of Fact[13]The Claimant was employed by the Respondent between 22 February 2016 and 15 March 2024 as a Circuit Administrator. Her responsibilities included administrative tasks for the Circuit, which consisted of twelve churches. She was contracted to work for 18 hours per week, Monday to Thursday.[14]At the relevant time the Circuit only employed three individuals and was otherwise reliant on voluntary work for assistance with the day to day running of the Circuit.[15]It is not in dispute that there were several discrepancies in relation to the Claimant’s pay and pension during her employment. For example, in 2018 it became apparent that the Claimant had been overlooked when a pay rise of 1.6% had been applied to all staff. Further pay increases were also not implemented and she was not enrolled in the pension scheme as she ought to have been in 2016. The Claimant was eventually enrolled on the pension scheme, having contacted the Pensions Ombudsman to complain. The Respondent then took 6% contribution from the Claimant in error, when a 3% contribution had been agreed. These matters have unsurprisingly undermined the Claimant’s confidence in the Respondent.[16]The Respondent has since instructed auditors to evaluate of the shortfall in terms of back payments and investment loss (interest). It remained in dispute at the hearing whether the Respondent had settled the outstanding amount owed to the Claimant in relation to the pensions error. There was insufficient evidence before me to find that the Respondent had paid the Claimant the outstanding amount.[17]In March 2023 the Claimant raised several concerns at work including the loss of interest on pension, a lack of promotion and being contacted out of hours and required to work on her days off.[18]On 22 May 2023 the Claimant received a consultation letter from Sue Creighton on behalf of the Circuit Leadership Team and Finance Group (HB/p.84). In this letter the Respondent stated that a new role of Circuit Administration Manager was being considered which would start in November of that year. This role would be a full-time role with additional responsibilities including reviewing Circuit Policies and Procedures; delivering financial controls; creating new databases and a list of other tasks. Ms Creighton confirmed that if this role was created the Claimant’s post would be redundant, but she would be able to apply for the new role.[19]The Job Description for the proposed role of Circuit Administration Manager was approved by the leadership team on 27 July 2023 (H/B p85) and this was shared with the Claimant on 28 July 2023 for discussion.[20]On 1 September 2023 Reverend Long was appointed to the Forest Circuit. His duties included line management of the Claimant and consideration of the role of Circuit Administrator. Upon review of the proposals he decided, in discussion with the Circuit Leadership Team, that in light of the reduction in the amount of administrative work, there was no further need for a Circuit Administrator at all. This was because the Circuit had recently almost halved in size. Further, the remaining work was increasingly digital, and ministers had become accustomed during the pandemic to performing their own administrative tasks. In his view, the proposed addition of financial responsibility to a broader manager role did not “fit” well. Consideration was given to a reduction in hours of the existing role, but this was not considered viable as the role was already part-time.[21]I found the Claimant to be an honest and credible witness. I find that her suspicions about the motives for the redundancy considering the past conduct of the Respondent and her relatively recent complaints to be understandable in the circumstances.[22]I also found Reverend Long to be an honest and credible witness who gave a consistent and plausible account of the reasons for redundancy. There is no evidence before me to undermine his account that this was a genuine redundancy situation, other than the Claimant’s suspicions. Reverend Long joined the Circuit after the issues of pay and pension had arisen, and after the complaints raised by the Claimant. I therefore do not find that he was motivated by bad faith in relation to these issues in reaching the decision to make the Claimant’s role redundant. The fact that the Claimant has not been replaced since March 2024 and that none of the other tasks have required delegation support Reverend Long’s credibility in relation to this issue.[23]On 22 November 2023 the Respondent began its consultation period, which ended on 8 December 2023. The Claimant did not respond to the consultation substantively but requested that the process was delayed until after Christmas.[24]On 10 January 2024 Reverend Long confirmed in writing to the Claimant that her role was being made redundant. This letter also contained details in relation to final pay, an ex-gratia payment and the Claimant’s right of appeal against the decision.[25]On 17 January 2024 the Claimant appealed against the redundancy decision.[26]The appeal meeting took place on 16 February 2024 and was conducted by an independent three-person appeal panel. The panel was chaired by Reverend Zihle, the Chair of District with oversight of the Forest Circuit.[27]In a decision dated 5 March 2024 the Claimant’s appeal was dismissed. The appeal panel concluded that the pay and pension issues had no impact on the redundancy decision. They further found that although the Circuit had previously considered a Circuit Administration Manager role, this was reviewed in 2023 and the Circuit had reasonably decided that this role was redundant where its duties could be taken on by the ministers and other Circuit officers.[28]The Claimant has no issues with the conduct of the appeal and considered it to be a fair and thorough process. Unauthorised Deduction from Final Pay[29]The Claimant’s contract of employment provides that she will be paid in arrears, at monthly intervals (H/B p76).[30]The Claimant understood that she was paid at monthly intervals for work conducted between 15th and 15th of each month. The Respondent asserts that the Claimant was paid per calendar month and that the date of payment is not relevant and that as the Claimant left on 15 March 2024 her March salary was half the usual monthly amount.[31]The Respondent initially relied on email exchanges and spreadsheets from its payroll department, which were not supported by underlying evidence or any witness statements as to their truth and accuracy. Considering the previous errors in relation to pay and pension and the inconsistent payment dates it is not surprising that the Claimant’s confidence that she had been properly paid by the Respondent was undermined. For the same reasons and considering the wording of the contract of employment in relation to payment in arrears, I attach little weight to these documents.[32]The Claimant’s employment started on 22 February 2016 but received her first pay slip on 30 April 2016 and was paid £2017.62 for the period February-April period (H/B p36). In subsequent pay slips, dated 15 May 2016 and 15 June 2016, the Claimant was paid £908.26.[33]It is regrettable that the Respondent did not provide copies of the Claimant’s pay slips, for the period 15 June 2016 – 15 March 2024 until the hearing. On consideration of these pay slips I find that during this period the Claimant was paid the full salary amount, and that payment was made in the middle of the month each month. This supports the Respondent’s submission that the Claimant was paid two weeks in advance and two weeks in arrears. The March 2024 final salary amount of £681 reflects payment for the 15 days worked in March 2024. Taking into account the payments summarised in paragraph 27, which combined with the change of payment date have no doubt led to confusion, I find that the Claimant was paid in full up to the date of her departure. The Law Redundancy
The Law
[34]S.94 of the Employment Right Act 1996 (‘ERA’) provides that an employee with sufficient qualifying service has the right not to be unfairly dismissed by their employer.[35]S.98 ERA provides so far as relevant:(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show – (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.(2) A reason falls within this subsection if it— … (c) is that the employee is redundant … … (4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) – (a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case.[36]A redundancy situation is defined by s.139 ERA. (1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to— (a) the fact that his employer has ceased or intends to cease— (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business— (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.[37]An employee may argue that a dismissal for redundancy was unfair because, although a redundancy situation existed (and the employee was not selected for an automatically unfair reason), the dismissal was nevertheless unreasonable under S.98(4) ERA.[38]It is not for Tribunals to investigate the commercial reasons behind a redundancy situation (Hollister v National Farmers’ Union [1979] ICR 542).[39]In many redundancy dismissals, the starting point will be the familiar guidance in Williams v Compair Maxam Ltd [1982] IRLR 83 EAT (at para 18 onwards). ‘18. For the purposes of the present case there are only two relevant principles of law arising from that subsection. First, that it is not the function of the Industrial Tribunal to decide whether they would have thought it fairer to act in some other way: the question is whether the dismissal lay within the range of conduct which a reasonable employer could have adopted. The second point of law, particularly relevant in the field of dismissal for redundancy, is that the Tribunal must be satisfied that it was reasonable to dismiss each of the applicants on the grounds of redundancy. It is not enough to show simply that it was reasonable to dismiss an employee; it must be shown that the employer acted reasonably in treating redundancy 'as a sufficient reason for dismissing the employee', i.e. the employee complaining of dismissal. Therefore, if the circumstances of the employer make it inevitable that some employee must be dismissed, it is still necessary to consider the means whereby the applicant was selected to be the employee to be dismissed and the reasonableness of the steps taken by the employer to choose the applicant, rather than some other employee, for dismissal. 19. In law therefore the question we have to decide is whether a reasonable Tribunal could have reached the conclusion that the dismissal of the applicants in this case lay within the range of conduct which a reasonable employer could have adopted. It is accordingly necessary to try to set down in very general terms what a properly instructed Industrial Tribunal would know to be the principles which, in current industrial practice, a reasonable employer would be expected to adopt. This is not a matter on which the chairman of this Appeal Tribunal feels that he can contribute much, since it depends on what industrial practices are currently accepted as being normal and proper. The two lay members of this Appeal Tribunal hold the view that it would be impossible to lay down detailed procedures which all reasonable employers would follow in all circumstances: the fair conduct of dismissals for redundancy must depend on the circumstances of each case. But in their experience, there is a generally accepted view in industrial relations that, in cases where the employees are represented by an independent union recognised by the employer, reasonable employers will seek to act in accordance with the following principles: 1. The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. 2. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria. 3. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service. 4. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection. 5. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment. The lay members stress that not all these factors are present in every case since circumstances may prevent one or more of them being given effect to. But the lay members would expect these principles to be departed from only where some good reason is shown to justify such departure. The basic approach is that, in the unfortunate circumstances that necessarily attend redundancies, as much as is reasonably possible should be done to mitigate the impact on the work force and to satisfy them that the selection has been made fairly and not on the basis of personal whim.’[40]In carrying out a redundancy exercise, an employer should begin by identifying the group of employees from which those who are to be made redundant will be drawn. This is the ‘pool for selection’ and it is to these employees that an employer will apply the chosen selection criteria to determine who will be made redundant.[41]However, an employer who omits to consider the question of pooling will not necessarily be acting unreasonably. In Wrexham Golf Co Ltd v Ingham EAT 0190/12 the Claimant worked as club steward. The Respondent decided that, to save money, it would combine its bar and catering functions, and the club steward’s duties could be divided among other staff, so the Claimant would be redundant. The Tribunal concluded that the dismissal was unfair because the Respondent had failed to consider the issue of a pool, and whether other bar staff should also have been placed at risk. On appeal the EAT noted that the word ‘pool’ is not found in s.98(4) ERA and held: ‘there is no rule that there must be a pool: an employer, if he has good reason for doing so, may consider a single employee for redundancy … there will be cases where it is reasonable to focus upon a single employee without developing a pool or even considering the development of a pool.’ The question which the Tribunal ought to have considered was whether, given the nature of the job of, it was reasonable for the Respondent not to consider developing a wider pool of employees.[42]Employers have flexibility in defining the pool from which they will select employees for dismissal. In Thomas & Betts Manufacturing Ltd v Harding [1980] IRLR 255 it was held that employers need only show that they have applied their minds to the problem and acted from genuine motives.[43]In applying section 98(4) ERA, the correct test is whether the employer acted reasonably, not whether the tribunal would have come to the same decision itself. In many cases there will be a 'range of reasonable responses', so that, provided that the employer acted as a reasonable employer could have acted, the dismissal will be fair: Iceland Frozen Foods Ltd v Jones [1982] IRLR 439. That test recognises that two employers faced with the same circumstances may arrive at different decisions, but both of those decisions might be reasonable.[44]In relation to the latter point, an employer should take such steps as are reasonable to secure alternative employment for an employee displaced because of redundancy. As a general rule it would be reasonable to provide the employee with such information about the terms and conditions applicable including the financial prospects see Fisher v Hoopoe Finance Ltd EAT0043/05.[45]The House of Lords case of Polkey v AE Dayton Services Ltd 1988 ICR 142, HL established that procedural fairness is an integral part of the reasonableness test now found in s98(4) ERA. Failure to follow correct procedures was likely to mean the dismissal was unfair. In relation to redundancy dismissals, Lord Bridge, stated that meant ‘the employer will not normally act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by deployment within his own organisation’. Unauthorised Deduction from Wages[46]S.13 ERA provides:(1) An employer shall not make a deduction from wages of a worker employed by him unless— (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction.(2) In this section “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised— (a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or (b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion. Pensions[47]Pension payments are not defined as wages in section 27 of the Employment Rights Act 1996.[48]Regulation 10 (B) of the National Minimum Wage Regulations 2015 provides that pension payments are not counted as renumeration for the purposes of the National Minimum Wage.
Conclusions
[49]I remind myself that it is for the Respondent to show that the redundancy was for a potentially fair reason. I am satisfied that the Reverend Long genuinely believed that the role was no longer required, and that the redundancy situation was genuine. In terms of the redundancy process, the Claimant was in a unique position in that she was the only person in the pool of those being considered for redundancy. It is not for me to substitute my view in relation to this decision, but in light of the above findings of fact in relation to the Claimant’s role and the reduction in administrative work it was reasonable of the Respondent to put the Claimant in a pool of one. The Claimant was given advance warning and was consulted. The Respondent considered alternatives to dismissal, including a reduction in the Claimant’s hours, but this was not considered feasible, and, in my view, this was also reasonable. The appellant also given right of appeal which was conducted by an independent panel who had not been involved in the previous decision. The Claimant agreed that the appeal process was fair. Had I found any flaws in the original redundancy decision, it would have been remedied by the appeal. The redundancy decision therefore fell within range of reasonable responses. The process was conducted fairly. Therefore, the dismissal was not unfair.[50]I have found that the Claimant has been paid her final salary in full. Therefore, the claim of unauthorised deduction from wages in relation to the Claimant’s final pay is not well founded and is dismissed.[51]The Claimant has complained of being over-taxed because of the Respondent’s historic failures to implement the pay rises at the appropriate time. For the avoidance of doubt these are matters which should be raised by the Claimant with HMRC.[52]The Respondent argues that as a matter of law pension payments are not wages. I consider it arguable that the legal exclusions in relation to pension payments refer to contributions from the employer. Any unauthorised deduction of the employee’s contribution is arguably an unauthorised deduction from wages and/or a breach of contract. Therefore, I conclude that this claim is well founded and succeeds. Any losses that flow from the Respondent’s errors are also potentially a breach of contract. In any event there is an agreement between the parties in relation to the amount owed to the Claimant. Only issue is whether this has in fact been paid. The Respondent is ordered to pay the Claimant the amount owed within 28 days of receipt of this judgment, if they have not already done so.