Mr A Hoggins v Recruitment Solutions (Services) Ltd: 3300172/2017
JUDGMENT
[1]The Tribunal heard evidence on oath and read documents provided by the parties and determined as follows. Unfair Dismissal - section 98 Employment Rights Act 1996[2]The Claimant was dismissed with notice on 31 October 2016 and that was the effective date of termination. The dismissal was unfair. This complaint is successful. Failure to Give a Statement of Employment Particulars – section 38 Employment Act 2002[3]The Respondent was in breach of the duty to give the Claimant a statement of employment particulars when the proceedings were begun. This complaint is successful. Remedy Hearing[4]The case will now be listed for a one day hearing to determine what remedy is appropriate.REASONS
[5]This judgment was reserved and written reasons are attached.[1]Claimant On 31 January 2017 the Claimant presented complaints to the Employment Tribunal alleging unfair dismissal and failure to give a statement of employment particulars.[2]Respondent On 13 February 2017 the Respondent presented a response. All claims were resisted.Evidence
[3]The Tribunal heard evidence on oath from the Claimant Mr Andrew Hoggins.[4]The Tribunal also heard evidence on oath on behalf of the Respondent from Mr Mike Yardley (Director).[5]The Tribunal also read documents in a bundle provided by the parties.[6]From the evidence heard and read the Tribunal made the following findings of fact. Findings of FactBackground
[7]The Respondent is a recruitment company. The Claimant was initially employed on a temporary basis as a “Resourcer” on 7 January 2013. He was engaged on a permanent contract on 1 March 2013 and signed a contract of employment on that date. The Respondent employed 4 Resourcers alongside 4 Consultants. The role of a Consultant was to place suitable candidates to meet client requirements in order to generate revenue. The role of a Resourcer was to find candidates for vacancies which had been generated by the Consultants.[8]At some point (which was uncertain) between October 2013 and February 2015, the Claimant was promoted from Resourcer to Consultant. Thereupon his duties changed, his pay was increased, he earned commission on sales, and he was given additional benefits including the use of a company car and a mobile telephone. Despite this, the Respondent did not give the Claimant a written statement containing particulars of the change and this was conceded by the Respondent.[9]There was no dispute that the Claimant’s sales performance throughout 2015 met the Respondent’s expectations and the Respondent was pleased with his performance regarding sales and the profit generated.[10]The Claimant’s sales/profit performance dropped from the beginning of 2016 and he was consistently failing to meet his sales targets. In his evidence, he accepted that “between the period of January 2016 to May 2016 my figures had dropped in all but one month”.[11]The Claimant’s explanation for the drop in his performance was that his “Google” work had been shared with another consultant “Leah” and that had affected his figures. Also that the Resourcers were not filling vacancies he had procured.[12]Mr Yardley said that he had warned the Claimant that sales based upon Google enquiries were unreliable and that although the Claimant had been successful in 2015 based almost solely on Google enquiries, because of their unreliability, his sales/profit had dropped accordingly in 2016. He said he had told the Claimant on several occasions to get out more and sell directly to clients rather than relying upon the Google enquiries. Performance reviews[13]On 14 July 2016 Mr Yardley called the Claimant into his office for a performance review. He accepted that he did not give the Claimant any warning or notice of the meeting. Mr Yardley’s note of the meeting read as follows: “Andy Hoggins – Performance Review Thursday 14th July 2016 We have discussed your performance and figures across the first half of 2016. A failure to hit targets during this period coupled with a lack of sales activity has left us with cause for concern. It was agreed that you would spend two days a week out visiting clients in the Berkshire area, trying to win new or old business. I will need the sales day reports each week. A review will be taken in 4 weeks time. Hopefully, there will be a marked improvement in your figures and prospective clients and we can continue to grow your desk and push the company forward. However, if there is not an improvement, we will have no other option than to terminate your employment with Recruitment Solutions. I will be on hand to assist you as much as possible during this period. Please come to me with anything that you might feel will help you.[14]Mr Yardley claimed that there was a further review meeting on 18 August 2016 but the Claimant denied that any such meeting took place. There was evidence in the bundle to show that the Claimant had sent an email on 18 August 2016 asking for a review meeting and that Mr Yardley had agreed to a meeting but there is no record of the meeting actually taking place. Mr Yardley said that was his mistake and he should have recorded the meeting. The Tribunal preferred Mr Hoggins’ account that although both of them intended to hold a meeting, it did not take place. Mr Yardley had recorded all other aspects of the performance review meticulously in writing and, bearing in mind the seriousness of the situation whereby the Claimant had been warned his employment may be terminated, it was implausible that if the meeting had taken place, no record was made of it.[15]A further review meeting between the Claimant and Mr Yardley took place on 26 September 2016. That was recorded in writing as follows: “Weekly Sales Report Consultant: Andy Hoggins Date 26/09/16 Number of temporary workers currently out 15 Number of clients currently supplied 8 Notes Focus on achieving meetings, increase margins as neutral vendors margins are small. Targets to be reached for Monday 31st October 2016 Site visits 15 per week Telesales calls 30 per day Sales email 10 per day Client meetings attended 1 per week Number of temporary workers 30 (Target) Number of clients supplied 12 (Target) Gross Profit for the 5 week month £12,500 (Target) I agree that the Monthly targets outlined are realistic and achievable in the next five weeks and are to be reviewed at the end of this period. I understand that to reach these targets I will have to concentrate my efforts whilst in the office on telesales and produce a high number of cold calls and visits to potential new customers. Signed by Consultant [A Hoggins] Date 26/09/16 Signed by Director [M Yardley] Date 26/09/16” Dismissal[16]Despite this 5 week performance improvement plan agreed in writing on 26 September 2016, 9 days later, on 5 October 2016, Mr Yardley considered that the Claimant’s sales figures were still unsatisfactory and decided to terminate his employment. He called the Claimant to a meeting at a Costa coffee shop and informed him that after failing to hit any targets in 2016, and with his figures continually falling, the Respondent had no other option but to terminate his employment.[17]The Claimant’s dismissal was confirmed in a letter of the same date as follows: “Wednesday 5th October 2016 REF: Termination of Employment Dear Mr Hoggins Further to our meeting earlier today, I can confirm the termination of your employment with Recruitment Solutions (Services) Ltd with your notice period ending on Monday 31st October 2016. You are not expected to attend work during your notice period but need to make yourself available to take phone calls with any queries that may arise. Full payment of outstanding holidays, all commission earned and outstanding holiday will be paid to you on Monday 31st October and your P45 will follow. This is on the agreement that all company property is returned prior to that date including the Company Car, Mobile Phone, all keys to the premises and any other company property that you are in possession of. We thank you for your hard work and commitment during your employment and wish you all the success in the future. I will be happy to receive any reference requests on your behalf to assist your quest for new employment.”[18]The Claimant was not given any warning or notice in advance of the dismissal meeting and nor was he given an opportunity to appeal afterwards.[19]On 31 January 2017 the Claimant presented his complaint to the Employment Tribunal.Relevant Law
[20]Under section 94 of the Employment Rights Act 1996 an employee has the right not to be unfairly dismissed by his employer.[21]Section 98. General.(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- (a) relates to the capability or qualifications of the employee for performing work of the kid which he was employed by the employer to do. (b) relates to the conduct of the employee, …(3) In subsection 2(a) – (a) “capability” in relation to an employee means his capability assessed by reference to skill, aptitude, health or any other physical or mental quality …(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.[22]In James v Waltham Holy Cross UDC [1973] ICR, it was said that an employer should be slow to dismiss an employee for incapability without first telling the employee of the respects in which he was failing to do his job adequately, warning him of the possibility or likelihood of dismissal on this ground and giving him an opportunity of improving his performance. In other words, there should be:(a) Proper investigation/appraisal of the employee’s performance and identification of the problem;(b) Warning of the consequences of failing to improve; and(c) A reasonable chance to improve.[23]In Alidair v Taylor [1978] ICR 445, the Court of Appeal said that the test of a fair capability dismissal (aside from procedure) has two elements:(a) Does the employer honestly believe the employee is incompetent or unsuitable for the job?(b) Are the grounds for that belief reasonable?[24]A Tribunal has to decide whether there was sufficient material in front of the employer which satisfied him of the employee’s competence or unsuitability and for which it was reasonable to dismiss. An employer must therefore produce evidence of poor performance and show that this was the real reason for dismissing the employee.[25]An employer will not be expected to create a new post for an employee in such a case but if a suitable alternative job is available it may be unreasonable not to offer this post to the Claimant rather than dismiss him.[26]The Tribunal must not substitute its own view for that of the employer, but must assess the employer’s conduct against the range or reasonable responses.[27]In the ACAS Code of Practice on Disciplinary and Grievance Procedures, the introduction to the code states that it is designed to help employers and employees deal with disciplinary and grievance situations in the workplace and confirms that disciplinary situations include poor performance. The code contains the steps which employers must normally follow in such cases. That is, establish the facts of each case, inform the employee of the problem, hold a meeting with the employee to discuss the problem, allow the employee to be accompanied at the meeting, decide on appropriate action and provide employees with an opportunity to appeal.[28]This complaint was set out in paragraphs 22 and 23 of the ET1 particulars of claim as follows: “22. If, which is denied, the Tribunal is of the view that the Claimant was dismissed for a potentially fair reason, the Claimant will say that his dismissal was unfair and did not fall within the band of reasonable responses. In particular the Claimant will say:22.1 Recruitment Solutions did not implement and follow any investigation and/or appraisal of the Claimant’s performance and identification of the problem before taking the decision to dismiss the Claimant;22.2 Recruitment Solutions failed to put in place any real objective procedure for measuring performance and/or allowing the Claimant the opportunity to undertake the same;22.3 the Claimant was not provided with support and/or training during any alleged period of appraisal of his performance before his dismissal. The Claimant will say that he was not offered specific training on marketing/networking to procure new business or provided with the support of a competent Resourcer that was able to fulfil his new referrals;22.4 the Claimant was not provided with warnings of the consequences of his failure to improve;22.5 the Claimant was not afforded a reasonable opportunity to improve before the decision to dismiss was taken;22.6 Recruitment Solutions did not consider other alternatives to dismissal such as redeployment; and22.7 the Claimant was not afforded the right of appeal to his dismissal on 5 October 2016. 23. The Claimant will say that all times of his employment, until his dismissal, he had a clean employment record; with no prior disciplinary warnings for performance of his duties. In addition the Claimant will say that the first-time Recruitment Solutions enacted any form of capability procedure was from 26 September 2016 and he was dismissed one week into any such procedure.”[29]The Claimant was not provided with written reasons for his dismissal but he accepted that the reason was capability which is a potentially fair reason for dismissal under section 98(2) and (3) of the Act.[30]The Tribunal found that the reason for dismissal in this case was capability. No other reason was suggested or apparent.[31]The Claimant claimed, however, that the dismissal was both procedurally and substantively unfair. The Tribunal found that to be so.[32]Other than warning the Claimant of the consequences of there being no improvement in his sales figures on 14 July 2016, none of the procedural requirements set out in James v Waltham Holy Cross UDC were complied with.[33]There was no proper investigation or appraisal of the Claimant’s performance. Nor any identification of the problem with his sales figures other than to require him to spend 2 days a week out visiting clients hoping to win new or old business. There was no evidence of any enquiry into the Claimant’s complaint that his Google enquiries work had been shared with another employee or that the Resourcers were not filling vacancies he had procured. Nor was there any enquiry into his assertion that he had made efforts to attract new clients and been out of the office trying to sell to new clients.[34]In particular, the Claimant had not been given a reasonable opportunity to improve. The 5 week performance improvement plan agreed between Mr Yardley and the Claimant on 26 September 2016 was summarily terminated by Mr Yardley on 5 October 2016. Mr Yardley’s account of the dismissal meeting referred to a 12 week opportunity to improve referring back to the review in July 2016. He made no reference, however, to the 5 week performance plan agreed between them in writing on 26 September 2016.[35]There was no evidence that at any point the Respondent offered the Claimant any additional training or supervision in order to improve his performance.[36]The Claimant had a legitimate expectation that he would have a full 5 weeks to improve his performance and that it would be reviewed on 31 October 2016. The summary termination of that plan was unreasonable in the circumstances.[37]Additionally, there was a failure to follow the basic steps set out in the ACAS Code of Practice on disciplinary procedures. Indeed, Mr Yardley accepted during cross-examination that no process was followed. The Claimant was not warned or given any notice of the dismissal meeting on 5 October 2016. He was not informed that he was entitled to be accompanied at the meeting. There was no written evidence produced at the meeting and the claimant was not given any right to appeal against the dismissal. No alternatives to dismissal were considered.[38]In these circumstances there was no reasonable investigation and no sufficient evidence in front of the Respondent to show incapability for which it was reasonable to dismiss. The dismissal was outside the range of reasonable responses.[39]The Tribunal found that the dismissal was both procedurally and substantively unfair. Failure to give statement of change of employment particulars – Section 38 Employment Act 2002[40]The Respondent conceded that when the proceedings were begun, it was in breach of the duty under section 4 of the Act to give a statement of particulars of the changes to the Claimant’s employment when he was promoted from Resourcer to Consultant.[41]The Tribunal found this complaint proved.Remedy
[42]The case will now be listed for a hearing to determine what remedy is appropriate in view of the above findings. REMEDY JUDGMENTRemedy
Introduction
[1]BY CONSENT the Claimant is awarded £21,924.36 in compensation for Unfair Dismissal. An agreed calculation of award is attached to this Judgment.[2]The Employment Protection (Recoupment of Benefits) Regulations 1996 apply to the above award for loss of earnings. The dates of the period to which the prescribed element is attributable are 1 November 2016 to 26 February 2017. The prescribed element is £8,309.60. The monetary award is £21,924.36. The amount by which the monetary award exceeds the prescribed element is £13,614.76.[3]Reasons for this Judgment were given orally at the hearing. Written reasons are also attached at the request of the Respondent.[1]This is a remedy hearing following the full merits hearing on 8 August 2017. In a reserved judgment dated 20 September 2017 the Claimant was found to have been unfairly dismissed.Evidence
[2]I heard evidence on oath from the Claimant and read documents in a remedy bundle and in the original full merits hearing bundle. I heard helpful Page 1 of 6 submissions from Mr Morton for the Respondent and from Ms Boakes for the Claimant.Issues
[3]The Claimant’s rates of pay and dates of employment have been agreed between the parties in an amended schedule of loss. Three areas of disagreement remain between the parties.[4]First, whether the Claimant has mitigated his loss under section 123(4) Employment Rights Act 1996. Second, what, if any, increase should be awarded for unreasonable failure to comply with the ACAS Code of Practice under section 207A Trade Union and Labour Relations (Consolidation) Act 1992. Third, what increase should be awarded in the compensatory award under section 38 Employment Act 2002 for failure to provide an updated statement of employment particulars under section 4 Employment Rights Act 1996.[5]For the avoidance of doubt, there is no application by the Respondent for a reduction in the compensatory award under the principle in Polkey or by way of contributory conduct.Findings of fact
[6]The Claimant was employed by the Respondent from 7 January 2013 until he was dismissed on 5 October 2016 from his employment as a Recruitment Consultant earning £32,000 per annum. The effective date of termination was 31 October 2016.[7]During October 2016 the Claimant worked for one week as an agency worker for the Respondent but further work was, he said, then denied him.[8]In mid-November 2016 he got married and spent two weeks away on honeymoon. Thereafter, in the period December 2016 to February 2017, he had decided not to seek any further employment in the recruitment industry. He never enquired about or applied for such work but sought jobs in the leisure and fitness industries. He was unsuccessful but eventually secured part-time employment with UPS on 27 February 2017 as a sorter/loader at a salary of £11,190 per annum. He said that he sought promotion internally thereafter within UPS and did not seek any alternative work outside UPS. No promotion within UPS has to date been forthcoming.[9]In June 2017 the Claimant applied to join Test Valley police force as a Police Constable. He received a provisional offer on 17 November 2017 with a start date of 12 March 2018 subject to medical and fitness tests which he is confident in passing. His starting salary will be £19,977 per annum. Page 2 of 6[10]Accordingly, at the date of this hearing 16 January 2018, the Claimant is employed part-time by UPS awaiting the start of his police career on 12 March 2018. Mitigation[11]Section 123(4) of the Employment Rights Act 1996 provides that: (4) In ascertaining the loss sustained by the claimant, the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales.[12]In Archbold Freightage Ltd v Wilson [1974] IRLR 10 it was said that: “The dismissed employee’s duty to mitigate his or her loss will be fulfilled if he or she can be said to have acted as a reasonable person would do if he or she had no hope of seeking compensation from his or her previous employer.”[13]In Savage v Saxena [1998] ICR 357 the Employment Appeal Tribunal recommended a three step approach to determining whether an employee has failed to mitigate his loss: “1. Identify what steps should have been taken by the claimant to mitigate his or her loss. 2. Find a date upon which such steps would have produced an alternative income; and 3. Thereafter reduce the amount of compensation by the amount of income which would have been earned.”[14]The burden of proof rests upon the Respondent to show a failure to mitigate by the Claimant.[15]In determining whether an employee has sufficiently mitigated his loss, much will depend on variables such as local levels of unemployment, whether the employee’s skills are readily transferable to other available employment, and the personal characteristics of the employment.[16]In Tandem Bars Ltd v Pilloni [2012] EAT/0050/12 the Employment Appeal Tribunal stressed that rather than concentrating on what the employee actually did to find work, the Tribunal’s focus should be on the steps that were reasonable for him or her to take in the circumstances.[17]I am required to consider what steps were reasonable for the Claimant to take in his prevailing circumstances. His personal circumstances are as follows. He is now 29 years of age. He is fit, intelligent and clearly motivated to succeed. He does not have a car and says that there is no public transport in his village. In my view it is not reasonable to expect Page 3 of 6 suitable alternative employment to be available in his village, and it is not unreasonable to expect him to purchase a car to assist in mitigating his loss. He holds a driving licence.[18]I do not consider that his marriage or his honeymoon made any significant impact on his ability to mitigate his loss. Indeed, the Claimant said that he made an application for a job whilst on honeymoon.[19]It is wrong to say that the Respondent has not produced evidence of job opportunities sufficient to satisfy the burden of proof regarding the Claimant’s duty to mitigate his loss. Evidence was given on oath in crossexamination by the Claimant on these matters and the documentary evidence in the two bundles was not challenged.[20]The Respondent has produced 11 job adverts during the period 27 March 2017 to 21 April 2017 for Recruiting Consultants and Trainee Consultants. All the jobs appear to be within commuting distance of the Claimant’s home in Abingdon. The salaries range from £17,000 to £30,000 per annum. In cross-examination the Claimant confirmed that if he was seeking further employment in the recruiting industry it is likely he would be qualified for at least some of those jobs and that he would be interested in applying for them.[21]It was also wrong to suggest that he would fail due to a lack of necessary sales training or experience or performance. The evidence at the full merits hearing was that during 2015, and previously, the Claimant was very successful in his role as a Consultant and it was his reduced sales performance in the first 9 months of 2016 which gave rise to his dismissal. Before that, he had a proven track record of excellent performance.[22]In my view it would have been reasonable for the Claimant to have sought employment in his field of expertise of Recruitment Consultancy before looking elsewhere for what would inevitably be lower paid jobs. Consultant and Trainee Consultant jobs were clearly available in March and April 2017. It is reasonable to assume that similar vacancies were available both before and after that period, which is simply a snapshot period.[23]Making an estimate on the available evidence before me, I find that, given his track record of success in 2015 and before, it was likely he would have been successful had he applied for some of those jobs. He failed, however, to even test the market by researching vacancies and making formal applications rather than making a couple of informal enquiries of former colleagues. In cross-examination he accepted that three of his former colleagues who were still working at the Respondent when he left, have themselves also left and since secured employment as Recruitment Consultants.[24]In these circumstances, I find that the Claimant has failed to fully mitigate his loss. If he had taken reasonable steps, he could have successfully Page 4 of 6 secured an alternative position within the recruitment industry. He could and should have done so no later than 30 April 2017, that is 6 months after his dismissal. If he had done so, taking account of his previous experience and the positions and salaries available, I estimate that by that date, he would have secured one of those positions earning at least £23,000 per annum.[25]Thereafter, it is likely that with the hard work and dedication of which he is clearly capable, he would have achieved his former salary of £32,000 or thereabouts within the next 6 months, that is by 30 September 2017 which is approximately one year after his dismissal.[26]I therefore find that it is just and equitable to award full loss of earnings for the period 1 November 2016 to 30 April 2017. Then to award the difference between £23,000 and £32,000 per annum for the next 5 months up to 30 September 2017. I make no award for future loss of earnings and the Claimant will have to give credit for his actual earnings during those periods. Failure to comply with ACAS Code of Practice[27]As set out in paragraph 37 of the Tribunal’s judgment, there was no process followed regarding the dismissal and there was no offer of an appeal. But there was some capability process which preceded it. There were at least two meetings at which the Claimant was warned about his performance, warned about the consequences of failure to improve, and given some opportunity to improve although of course that opportunity was unreasonably cut short.[28]There was an unreasonable failure to comply with the Code of Practice, but not a complete failure. It is just and equitable to award a 15% increase for unreasonable failure to comply with the ACAS Code of Practice. Failure to Give an Updated Statement of Employment Particulars[29]This failure under section 38 Employment Act 2002 is admitted. There was a duty under section 4 Employment Rights Act 1996 to provide an updated statement of employment particulars but again, not a complete failure. The Claimant had the original statement and it was on promotion to Recruitment Consultant between the dates of October 2013 to February 2015 that the failure occurred. This was not a case where there was a complete failure to provide any particulars of employment, nor was it a case where the Claimant had asked for particulars and they had been refused. It is just and equitable to award 2 weeks’ pay for that failure.[30]Those are my findings and my decisions. Given those decisions on mitigation and increases under section 207A and section 38, I suggest that I could leave the parties to agree the detailed calculations. Page 5 of 6[31]Following the hearing the parties presented an agreed calculation of award, a copy of which is attached to this judgment.