Mr S Atkinson and Mr R Atkinson v Bond Freight Trading Ltd: 3313013/2023 and 3313014/2023 Mr S Atkinson and Mr R Atkinson v Bond Freight Trading Ltd: 3313013/2023 and 3313014/2023
JUDGMENT
[1]The claim for unfair dismissal is dismissed due to a failure to establish a two-year qualifying period of service.[2]Any arrears of pay, arrears of holiday pay and notice pay, if not already paid, are due and owing to the claimants. The claimants would be entitled to the Statutory minimum of one week notice.[3]I find it just an equitable to award a 4 weeks’ pay for the respondent’s failure to provide a written statement of employment particulars.REASONS
(page numbers in () refer to the pdf numbering of the bundle prepared for the final hearing)Background
[1]Before addressing the substantive facts in issue I mention that the paperwork disclosed a possible issue regarding jurisdiction. The representative at the outset of the hearing confirmed that this point was no longer being pursued. The respondent company is incorporated in the United Kingdom (England) and so the jurisdictional issue previously raised was no longer being relied upon.[2]This left the claims advanced in the ET 1 and the unfair dismissal claim that was subsequently added during Case Management to be considered.[3]The preparation of this Judgment has been delayed due to unforeseen circumstances. During the first two days of the hearing the respondent’s representative fell ill. This necessitated an adjournment. The matter was then set down for a further day. Unfortunately, the respondent representative was unable to attend. The newly instructed representative wished to proceed with the hearing. However, whilst the evidence could be completed the representative was not in a position to make submissions given a lack of any note from her colleague. In the circumstances it was agreed between the parties that the claimants’ representative would make his oral submissions. The respondent would then be afforded time to present written submissions. The claimant was then provided with an opportunity to respond. An extension of time was needed for the respondent to obtain the notes from the representative previously instructed and to prepare the written submissions. The submissions were eventually submitted to the Tribunal. The claimant was afforded an opportunity to respond. The administration of these matters has led to delay in the preparation of these reasons for the reserved judgment.Issues
[4]The parties agreed the unfair dismissal claim would depend upon whether 2 years qualifying service had been established. The other heads of claim in the ET 1 would depend upon factual findings. The list of issues was set out at (42) as being: ‘53.0 Unfair dismissal;53.1 Wrongful dismissal (i.e. notice pay)53.2 Holiday pay (they say that their leave year ran from 1 April to 31 March each year and that they had taken no annual leave in the leave year in which their employment came to an end)53.3 Arrears of pay (the period 1 – 25 September 2023)‘Evidence
[5]This hearing lasted for three days. I heard evidence from both the claimants Mr S Atkinson and Mr R Atkinson and from the two witnesses for the respondent Mr T Mallon and Ms D Sands. All four witnesses had prepared witness statements and there was a bundle of evidence running to 311 (PDF) pages. Submissions[6]I have taken into account the detailed oral and written submissions made by the Representatives. I do not propose to repeat their submissions herein having regard to rule 62(5) Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, as amended. I took into account the authorities I was referred to, as well as the ACAS Code.Findings
[7]I set out the factual findings in some detail as they are necessary for the conclusion that I draw therefrom. Mr S Atkinson has been involved in the freight/transport business for many years. He has had various companies that organise and transport goods throughout the United Kingdom and Europe. His son Mr R Atkinson has joined him in these businesses. Brexit provided both challenges and a business opportunity. One individual whom the Atkinsons had worked with was Mr M Morgan. Both he and Mr S Atkinson were well acquainted with each other having worked together for many years. Mr M Morgan has, and continues to have, his own separate business interests. They discussed setting up a company that would enable their businesses to continue with the new trade Regulations surrounding Brexit.[8]Mr S Atkinson was seeking to retire and unfortunately has a very unwell wife whom he needed to spend time with. The general plan was that a business would be created in Northern Ireland by Mr M Morgan. He and Mr R Atkinson would be 50% owners/shareholders in this business. Mr S Atkinson would work alongside them for approximately 12 months. The purpose of this was Mr S Atkinson knew all the various clients. He was to be on board with this new company to bring these clients over and to, as it were, transition the business from him to Mr Morgan and Mr R Atkinson. At the end of this estimated 12 month period. Mr Morgan was then to pay a lump sum to Mr S Atkinson for his business. This would enable Mr S Atkinson to retire. As I state this was the general plan. The subsequent events meant this did not happened.[9]Regarding the claim for unfair dismissal it is the claim that both Mr R Atkinson and Mr S Atkinson have the necessary two-year qualifying period of employment to be able to bring a claim. From the evidence provided I do not accept that this has been established. Various pieces of evidence drew me to this adverse conclusion.[10]The claim form does not raise a claim of unfair dismissal (page 8). I do not place any reliance upon this. The claimants are not legally qualified. It was only having had a discussion with a Judge at a previous Case Management hearing that the possibility of an unfair dismissal claim was raised. The Judge may have been influenced by the employment start date which is recorded as 21 January 2020. This is a date well before, even on the claimants’ evidence, that they were employed. However, the witness statements as drafted for the claimants stated their start dates were 21 January 2022. Initially in his evidence Mr S Atkinson confirmed repeatedly that he had been employed since 2022. He later changed this to say in fact he had made a mistake and his start date was in 2021. However, repeatedly during his evidence Mr S Atkinson stated that he had worked for approximately 12 to 18 months for the respondent company. This would fit with how his witness statement was initially drafted. It would also fit with the respondent’s documentation at (page 306) which lists both claimants starting their employment on 1 March 2022. Further there is the payslip for Mr S Atkinson at (page 303) which records a net payment of £3000. The “taxable gross pay” in the year to date would show that that was the only payment made in 2022. Had he been working for the respondent company any earlier I would expect this figure to be far higher. The evidence of Mr S Atkinson was that both he and his son started working for the company at the same time. Mr R Atkinson did not give any evidence to the contrary.[11]Aside from their oral evidence there are a couple of pieces of information that would point to a different start date of employment. The first would be (page 311) which is a letter from the respondent company stating that Mr R Atkinson has been a permanent employee since 1 January 2021. I do not find that this letter has credible details recorded. It was confirmed during the hearing it was prepared for the purposes of a visa application. Mr R Atkinson accepts that his date of employment was not in fact 1 January 2021. I do not therefore accept that any credible checks were made before this letter was prepared. For the same reasons I do not accept that Mr R Atkinson’s wage slip at (page 302) bears accurate details. There is the email from Mr Morgan (pages 150/151) that suggests that the claimants have been “working in” the respondent company since it commenced in 2021. This email was sent to try and consolidate the client base with the respondent company. The email also accuses the claimants of “scheming” behind the respondent company. I again do not accept that this accurately reflects the employment position of the claimants. Further, there is the evidence of Mr R Atkinson. He stated that in November 2021 there was a meeting at Luton airport where the prospect of putting into action what I have referred to as the ‘general plan’ above was discussed. He stated that issues such as changing over the telephone and email accounts so that the telephone numbers could be maintained and there be no issue with their existing client base were discussed. He confirmed that this process would take some time before it was put into effect. As this meeting was in November 2021 I find that the employment with the respondent company would more logically sit with a start date in March 2022 rather than in March 2021 as claimed. Whilst therefore Mr S Atkinson and to a lesser extent Mr R Atkinson may well have been in discussion with Mr Morgan regarding the setting up of the respondent company and how Mr S Atkinson would exit the business, and these discussions may have been ongoing for a period of time, I find that the employment of the claimants with the respondent company did not commence until 2022. As at the date of dismissal they did not therefore have the necessary two-year qualifying period to bring a claim for unfair dismissal.[12]It is not in dispute that the claimants set up a company referred to as ‘Stateline’. In addition to this they set up ‘Stateline freight’. Stateline freight was incorporated in June 2023. This is when the claimants were still employed by the respondent. Stateline freight was registered in Ireland to enable the claimants to carry out a line of business activity in a similar vein to that of Bond Freight Trading Ltd and move goods through Ireland to comply with the new European Regulations. Having heard the evidence it is clear that both the claimants and Mr M Morgan had various other business interests. It appears that when the business need suited the respondent company would utilise the services of Stateline and vice versa. The business model for the respondent company was to seek to obtain monies from clients from three sources. The first is they would have to pay for the goods, the second was they had to pay for the transport and thirdly a, usually, 5% commission was added. As the post Brexit landscape and trading routes started to reopen this 5% commission was an issue for various clients. I accept the evidence of Mr S Atkinson and Mr R Atkinson that some were prepared to pay the commission. Whilst other clients were not prepared to pay and threatened to take their business elsewhere. I accept that Mr S Atkinson discussed this with Mr M Morgan. It appears there may have been some confusion. Mr M Morgan possibly believed that he was going to lose the 5% commission across all clients. This was not the true position. Mr S Atkinson confirmed that only some clients were not prepared to continue to pay commission. The plan, as far as Mr S Atkinson envisaged it, was for the clients who were not prepared to pay the commission to be invoiced through Stateline, and those that would pay would continue to be invoiced through the respondent company. I accept that various conversations took place between, primarily Mr S Atkinson and Mr M Morgan regarding this.[13]Alongside the commission point was the fact that Mr S Atkinson was still trying to negotiate his exit from the business. He was seeking to agree a settlement figure with Mr M Morgan. Mr M Morgan appears to have wished to have bought Mr S Atkinson’s client base out right but did not want Mr R Atkinson to maintain his role within the business. This was not acceptable to Mr S Atkinson as he wished his son to be able to continue in the business. Due to a combination of these factors Mr S Atkinson and Mr M Morgan never agreed on a package or sale price to buy Mr S Atkinson out of the business. There was the further complication that the claimants set up a company Stateline freight with a registered trading address in Northern Ireland. Whether this was set up in direct competition with the respondent or not I find that this further complicated the relationship between the claimants and respondent. The respondent found out about Stateline freight shortly before the actions of Mr Morgan in late September to close down the respondent’s UK office based in Huntington.[14]I find that in late September 2023 Mr M Morgan decided to close or shut out the claimants from the respondent business. I found their evidence credible that upon turning up to work on 25 September 2023 they found that the managed offices which were paid for by the respondent company were closed. I accept their evidence that they knew the manager of the office and she allowed them into the building to obtain their personal effects. For a short period of time the company mobiles that they had were still in operation. This is how they heard of the email sent by the respondent to the client base. There is an email at (page 157) dated 2 October 2023 from Mr R Atkinson to the respondent giving informal notice and asking for the reasons why he has been told by various customers of the respondent that he is no longer an employee. He asked for a response within 7 days. His evidence was he has had no response. The respondent has not provided any evidence of a response. The evidence was that ACAS made repeated approaches to the respondent for a response. In assessing all the evidence I find the respondent has not been forthcoming in this regard. I accept the evidence that in effect Mr M Morgan simply closed down the managed offices in Huntington and after a relatively short period of time cancelled the mobile phone and email contracts. He in effect froze the claimants out of the business.[15]The evidence of Mr Mallon would support this finding, he gave evidence to the effect that the claimants were shut out of the business they were ’not deserving’ of a response and so none was offered. At this time both the respondent and the claimants started to try and protect what they respectively saw as their own business interests.[16]I do not find that the grounds have been established to evidence the claimants could have been sacked for gross misconduct. Although they had set up a company in Northern Ireland I accept there was a potential business need to do this so the customers who were not going to pay commission could be managed through a different invoicing route. Further, there was the issue that the client base and the sale of the same had not been finally negotiated and so Mr S Atkinson may well have needed to leave a viable trading route for his son Mr R Atkinson to work through. I find there may have been misunderstanding and possibly even some mistrust / doubt behind the parties actions but there were not grounds for immediate dismissal.[17]Given the above findings I find that the claim for unfair dismissal is dismissed due to a failure to establish a two-year qualifying period of service.[18]I find that any arrears of pay, arrears of holiday pay and notice pay due at the date of termination, if not already paid, are due and owing to the claimants. The claimants would be entitled to notice. Statutory minimum of one week given on my findings there is one year completed employment and no contract of employment to point to a contrary position.Remedy
[19]From the findings as set out above I find the claimants are entitled to: i) One week’s notice pay; ii) Any unpaid Holiday pay (the parties stated that their leave year ran from 1 April to 31 March each year and that they had taken no annual leave in the leave year in which their employment came to an end); iii) Arrears of pay (the period 1 – 25 September 2023); iv) As the respondent was in breach of its duty to give the claimants a written statement of employment particulars, I find it just and equitable to award 4 weeks’ pay under section 38 of the Employment Act 2002.[20]If the parties cannot agree these sums they are at liberty to apply to the Tribunal for a remedy hearing. Due to the issues caused by the change of representative these matters could not be finalised within the allotted 3 days. Approved By First Tier Tribunal Judge G D Davison sitting as an