Miss M Rolak v AM:PM Organics Ltd and Others: 3314519/2023
EMPLOYMENT TRIBUNALS
Case No 3314519/2023
Between
Miss M. RolakClaimantAMRespondent
Before
Employment Judge S MatthewsNot represented for respondentDate 2 June 2025
JUDGMENT
[1]The first respondent made unauthorised deductions from wages by failing to pay the claimant the full amount of wages due from 31 May 2023 to 8 November 2023 and is ordered to pay to the claimant the sum of £28487.59 being the total gross sum. The claimant is responsible for the payment of any tax or National Insurance.[2]The first respondent made an unauthorised deduction from wages by failing to pay the claimant in lieu of accrued but untaken annual leave on termination of employment and is ordered to pay to the claimant the sum of £778.86 being the gross sum due. The claimant is responsible for the payment of any tax or National Insurance.[3]The first respondent was in breach of contract by dismissing the claimant without notice and the respondent is ordered to pay the claimant damages of £11,250 (being the gross sum due) for that breach. This figure has been calculated using gross pay to reflect the likelihood that the claimant will have to pay tax on it as Post Employment Notice Pay.[4]The first respondent was in breach of contract by failing to reimburse expenses of £309.60.[5]The claims against the second and third respondents are not upheld and are dismissed.[6]The total amount payable to the claimant is £ 28,487.59 (gross) £778.86 (gross) £11,250 (gross) £309.60 Total £ 40,826.05
REASONS
[1]The claimant commenced employment as a Trainer and Key Account Manager on 16 January 2023. The claimant became concerned about not being paid her salary from around April 2023. She has brought proceedings against 3 respondents (referred to in this Judgment as R1, R2 and R3), and the tribunal is required to determine which was her employer. R2 is the sole director of R1 and R3.[2]The claimant contacted Acas on 12 October 2023 in respect of R1 and a certificate was issued by Acas on 13 November 2023. The claimant contacted Acas on 13 November 2023 in respect of R2 and a certificate was issued by Acas on 14 November 2023. The claimant contacted Acas on 13 November 2023 in respect of R3 and a certificate was issued by Acas on 24 November 2023. The employment tribunal claim was presented to the tribunal on 12 December 2023.[3]None of the respondents responded to the claim. On 19 July 2024, the tribunal notified the claimant that a Judgment could be issued, following clarification of the quantification of the claim. The claim was listed for today’s remedy hearing by a letter dated 20 December 2024.[4]The attachment to the Particulars of Claim (P of C) refers to R2 as Herbal Community Ltd and R3 as Hans Kare Lundestad which differs from the numbering in the ET1 form. It is clearly an error. I have used the numbering in the ET1. Where the P of C refers to R3 I have assumed that intends to refer to R2, Hans Kare Lundestad, and where the P of C refers to R2 I have assumed that it intends to refer to R3, Herbal Community Ltd.[5]The claim, as expressed in the Schedule of Loss (S of L) is stated to be for unpaid salary, including statutory sick pay, pension contributions, holiday pay, notice pay in lieu and breach of contract. The claim for breach of contract comprises failure to provide medical and life insurance, medical expenses, and sundry workrelated items. The claimant also seeks a declaration regarding the failure to provide her with itemized pay statements.[6]I had before me a bundle of 319 pages. Numbers in brackets below are references to pages in the bundle (XY). I also had a signed statement from the claimant dated 4 March 2025. The claimant gave oral evidence confirming the contents of the statement and answering further questions from which I made findings of fact. References to the paragraphs in the claimant’s statement are set out below in brackets as (C/XY).[7]I identified the following issues at the beginning of the hearing: 1.Employment contract1.1 Who was the claimant’s employer?1.2 What was the date of termination of the claimant’s employment? 2. Unauthorised deductions 2.1 Did the relevant respondent make unauthorised deductions from the claimant’s wages and if so how much was deducted? 3. Breach of contract3.1 Did this claim arise or was it outstanding when the claimant’s employment ended?3.2 Did the relevant respondent do the following? 3.2.1 Fail to pay for medical, health and life insurance and/ or medical expenses? 3.2.1 Fail to reimburse the claimant for work-related expenses.3.3 Was that a breach of contract?3.4 How much should the claimant be awarded as damages? 4. Holiday pay4.1 What was the claimant’s leave year? How much of the leave year had passed when the claimant’s employment ended?4.2 How much leave had accrued for the year by that date?4.3 How much paid leave had the claimant taken in the year?4.4 How many days remain unpaid?4.5 What is the relevant daily rate of pay? 5. Wrongful dismissal/notice pay5.1 What was the claimant’s notice period?5.2 Was the claimant paid for that period? 6. Itemised pay statements 6.1 Was the relevant respondent in breach of its duty under s.8 Employment Rights Act 1996 to give the claimant itemised pay statements?
Findings of Fact
[8]Having considered the documentation in the bundle and heard the claimant’s oral evidence, I make the following findings of fact on the balance of probabilities.[9]The claimant commenced employment on 16 January 2023. The employment contract names R1 as the employer (38-50). A letter confirming she had passed her probation was issued by R1 on 24 April 2023 (240).[10]The bundle contains letters signed on 5 July 2023 (51) by R2 and 7 July 2023 by accountants for R1 (52) confirming the claimant as an employee of R1.[11]R2 was the sole director of R1. The company was a ‘start up'. The claimant and R2 were the only company employees for most of the period of the claimant’s employment. The claimant explained in evidence that she and R2 communicated regularly and the tasks she did were controlled and delegated to her solely by R2. Under his direction she started to do some work for R3 around March 2023 (P of C). R3 was also a ‘start up’ company of which R2 was the sole director.[12]There was discussion between the claimant and R2 about the claimant moving to R3 from around July/ August 2023. The claimant was doing more work for R3 by then. However that move never took place. Although they reached the stage of a draft contract being provided on 19 September 2023 (56-66), it contained errors, and the claimant declined to sign it (C/23) (307).[13]R2 provided a warranty in respect of payment by R1 on 24 April 2023 (37) (C/17) ‘With this Email i hereby confirm that I Mr Hans Kåre Lundestad (091169-44909) as a Norwegian Citizen with the formal address registered as Skovveien 22, 0257 Oslo Norway give you Mrs Marta Rolak an warranty for unpaid salary, taxes and expenses on behalf of the company AM:PM Organics Ltd with the registration 14609326 and with the official address registered at Grunberg & Co, 5 Technology Park, Colindeep Lane, London United Kingdom, NW9 6BX. The warranty covers all unpaid salary, taxes and expenses related to your position as an employee and your signed agreement with the company AM:PM Organics Ltd. And it covers the period from January 16 to July 1th (sic) 2023.’[14]On 11 October 2023 the claimant became ill and took sick leave until the date of termination of her employment. The bundle contains a Fit note for the period from 11 October 2023 to 11 November 2023 (210).[15]The claimant submits that her employment terminated on 8 November 2023. This is the date she has put on her S of L and in her statement. She started selfemployed work on 9 November 2023 (C/26). She did not send a letter resigning (C/12). It was clear by that date that R1 was in breach of the employment contract by failing to pay her wages and she resigned in response to that.[16]R1 issued itemized payslips for the period to the end of November 2023. For the extent that she was paid (see paragraph 17 below) R2 paid the claimant out of his own private account (C/13). He said this was while he was trying to set up a company bank account in the UK (51).[17]The claimant’s agreed gross salary was £45,000 a year, that is £3750 per month or £173.07 per day. She was paid £1538.05 (net) on 17 February 2023, for January 2023. She was paid £8656 (net) on 15 May 2023. That was intended to cover the period February, March and April 2023 (C/13).[18]The payment on 15 May 2023 should have been £8527.28, but it was £8656 because R1 omitted to deduct the £129.20 Nest pension payment (C/16). R2 agreed he would adjust it in the May or June payroll (290), and I have adjusted it in the calculations below.[19]The claimant was not paid for the remainder of her employment. From 1 May 2023 to 11 October 2023 there are 163 days. The gross pay she was due would therefore be (63 x £173.07) £28,210.41. When deducting the £129.20 for the Nest pay referred to above it would be £28081.21.[20]The claimant’s S o L and statement (C/27) miscalculate the amount due. She deducts the amount received in May from her calculation, appearing to overlook that sum was for the period to end of April 2023. I am satisfied, having heard evidence from her and from paragraph 13 of her statement that sum should not be deducted as it related to the earlier period. She also appears to have overlooked pay for the month of May 2023 in her S of L. Again I am satisfied from the evidence I heard and her statement that she was not paid for the month of May 2023.[21]From 11 October 2023 to termination on 8 November 2023 the claimant was on sick leave and had a fit note which entitled her to statutory sick pay (SSP). SSP is not paid for the first 3 days off sick. The rate is £109.40 a week. The claimant was therefore entitled to 3 weeks and 4 days (£15.63 a day x 26 days) which totals £406.38 (gross).[22]The claimant indicated that she would like to claim employer’s pension contributions. That was not included in the claim form and she sought leave to amend. However her claim is misconceived. The amounts of £129.20 which she claims represent employee contributions, not employer contributions. As the claim is not misconceived I do not allow leave to amend.[23]The claimant’s contract provides for 3 months notice or pay in lieu of notice (45) which entitles her to the sum of £11,250 (£3750 x 3).[24]Annual leave is provided for in the claimant’s contract (42-43) at 1/260th (£173.08) for each day of untaken entitlement. The period over which that is calculated is 213 working days (excluding weekends but including bank holidays). She was entitled to 16.5 days during that period during which she took 12 days’ holiday. Therefore 4.5 days remain for which she should have been paid £778.86 (4.5 x £173.08).[25]The claimant’s contract provides for medical insurance and life insurance. These were not provided. The claimant paid physiotherapy expenses and claims reimbursement. The claimant has not provided evidence that any policy provided would cover her for these medical expenses.[26]The claimant claims sundry expenses of £309.60. She says she was entitled to claim these expenses but she was not given an expense form except once on 23 April 2023 (221-224). The bundle contains a message to R2 in which the claimant refers to expenses of £309.60 (303). There is no correspondence to suggest the claim is disputed. I accept, on a balance of probabilities, that the claim was accepted on behalf of R1 and the claimant is entitled to be reimbursed.
The law
[27]In Ms Madeleine Clark v Harney Westwood & Riegels & 4 Others: UKEAT/0018/20/BA (para 52) Mr Justice Choudhury (at that time President of the EAT) identified 5 factors relevant to determining the identity of parties to an employment contract as follows: “In my judgment, the following principles, relevant to the issue of identifying whether a person, A, is employed by B or C, emerge from those authorities:a. Where the only relevant material to be considered is documentary, the question as to whether A is employed by B or C is a question of law: Clifford at [7].b. However, where (as is likely to be the case in most disputes) there is a mixture of documents and facts to consider, the question is a mixed question of law and fact. This will require a consideration of all the relevant evidence: Clifford at [7].c. Any written agreement drawn up at the inception of the relationship will be the starting point of any analysis of the question. The Tribunal will need to inquire whether that agreement truly reflects the intentions of the parties: Bearman at [22], Autoclenz at [35].d. If the written agreement reflecting the true intentions of the parties points to B as the employer, then any assertion that C was the employer will require consideration of whether there was a change from B to C at any point, and if so how: Bearman at [22]. Was there, for example, a novation of the agreement resulting in C (or C and B) becoming the employer?e. In determining whether B or C was the employer, it may be relevant to consider whether the parties seamlessly and consistently acted throughout the relationship as if the employer was B and not C, as this could amount to evidence of what was initially agreed: Dynasystems at [35].[28]The cases referred to are Clifford v Union of Democratic Mineworkers [1991] IRLR 518; Secretary of State for Education and Employment v Bearman & Others [1998] IRLR 431; Autoclenz Ltd v Belcher [2011] ICR 1157; and Dynasystems for Trade and General Consulting v Moseley, UKEAT/0091/17/BA.[29]S.13(1) of the Employment Rights Act 1996 provides:- “ 13 Right not to suffer unauthorised deductions.(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) 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.”[30]The question of what is properly payable requires interpretation of the relevant terms of the contract and a factual analysis of the claim.[31]S.27 Employment Rights Act 1996 defines wages as: 27 Meaning of “wages” etc. (1) In this Part “wages,” in relation to a worker, means any sums payable to the worker in connection with his employment, including— (a)any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise, (b)statutory sick pay under Part XI of the Social Security Contributions and Benefits Act 1992, It excludes payments for expenses incurred by the worker in carrying out his employment.[32]The Working Time Regulations 1998 provide for minimum periods of annual leave and for payment to be made in lieu of any leave accrued but not taken in the leave year in which the employment ends. The Regulations provide for 5.6 weeks leave per annum. There will be an unauthorised deduction from wages if the employer fails to pay the claimant on termination of employment in lieu of any accrued but untaken leave.[33]The time limit for bringing a claim is three months beginning with the date of payment of wages from which the deduction was made (s. 23(2)(a)), unless there is a series of deductions or payments in which case the time limit runs from the last deduction in the series (s. 23 (3)). The determination of whether there is a series of deductions is a question of fact for the tribunal.[34]The Employment Tribunal’s Extension of Jurisdiction (England and Wales) Order 1994 allows employees to bring claims for breach of contract in the employment tribunal for the recovery of damages (other than a claim for personal injuries) if the claim arises or is outstanding on termination of the employee’s employment. It must relate to a claim for damages for breach of contract of employment or other contract connected with employment (Article 3 of the 1994 Order and s.3(2) Employment Tribunals Act 1996).[35]Provided the employee is not in fundamental breach of contract an employment contract can only lawfully be terminated by the giving of notice in accordance with the contract or, if the contract so provides, by a payment in lieu of notice.[36]Section 8 Employment Rights Act 1996 provides that a worker has a right to be given a written, itemised, pay statement containing the gross amount of the wages or salary, the amounts of any deductions and the net amount of wages or salary. Where an employer has failed to give a worker an Itemised pay statement the tribunal may make a declaration to that effect (s.12 Employment Rights Act 1996). Submissions[37]I heard detailed oral submissions from Mr. Wijewardane and he had also prepared a skeleton argument in advance of the hearing. I carefully considered his submissions when reaching my conclusions. Conclusions Identity of Employer
Conclusions
[38]The identity of the claimant’s employer is a matter of fact and law. I have made findings of fact about what happened between the parties in order to discern their true intentions.[39]The documents in the bundle provide clear evidence that the parties understood throughout the course of the relationship that the claimant was employed by R1. Those documents include the contract of employment (38-50), the warranty provided by R1 on 24 April 2024 (37), letters written in July 2024 (51-52) and the payslips which cover the period to 30 November 2024 (97-101).[40]I make no finding on the enforceability of the warranty because that is outside the tribunal’s jurisdiction. But in itself it is evidence that the claimant remained an employee of R1. If she had been an employee of R2 it would not be necessary for him to provide a warranty on behalf of R1.[41]Although the claimant was initially paid by R2 the July 2024 letters and the payslips show that the parties acknowledged that the party with responsibility for paying the claimant’s wages was R1.[42]Although the claimant was instructed on a day to day basis by R2 that is not inconsistent with R1 being the employer; R2 was the director of R1 and there was no-one else in the company to give instructions.[43]Although the parties discussed the claimant moving her employment to R3 that did not happen (paragraph 12 above) and R1 remained her employer.[44]The claimant appears to have understood R1 to be her employer when she first brought her claim to the tribunal. She did not contact ACAS in respect of R2 and R3 until ACAS issued a certificate in respect of R1.[45]I find the documentation and all interactions between the claimant and the parties were consistent with R1 being her sole employer from the outset and remaining her employer. Wages[46]I am satisfied that the failure by R1 to pay the claimant her wages from 1 May 2023 to 8 November 2023 was a series of unauthorised deductions ending on 8 November 2023 and the claim is brought within the statutory time limit.[47]In total there was an unauthorised deduction of £28,487.59. That sum is the gross figure and is inclusive of statutory sick pay (paragraphs 19 and 21 above). I order the first respondent to pay this sum to the claimant.[48]The claimant claims interest in the S of L, but the statutory provisions referred to do not apply in the employment tribunal. The claimant has not provided evidence of loss in support of the claim for interest. Accordingly I do not make an award of interest. Pension[49]The claimant’s application to amend her claim to include pension contributions is not allowed. It is not particularised. In any event the sums claimed in the S of L are employee contributions which would have been deducted from her pay. As I have allowed for the full loss of wages without deduction, to allow the sum again would amount to double recovery. Notice pay[50]I find that the claimant’s employment terminated on 8 November 2023. The claimant resigned in response to a fundamental breach of contract by R1.[51]I find that the claimant is entitled to 3 months notice under the terms of her contract, and I award the gross sum of £11250 in respect of that. Holiday pay[52]I calculate that the claimant was entitled to accrued holiday pay of £778.86 (paragraph 24 above). I order the first respondent to pay that sum to the claimant. Expenses[53]The claimant has not established a loss for failure to provide medical and life insurance and I do not make an award to reflect that breach of contract. The claimant has not established on a balance of probabilities that medical insurance would have covered her physiotherapy costs and I do not make an award for that (paragraph 25 above).[54]I accept the claimant was entitled to claim expenses in the sum of £309.60 (paragraph 26 above) and I make an award for that. Failure to provide itemized pay slips.[55]I do not make a declaration that the claimant was not provided with itemised payslips. I found that she was provided with itemised pay slips, although unfortunately she was not paid from 1 May 2023 onwards. Summary[56]I therefore order the first respondent to pay the total sum of £40,826.05 to the claimant (subject to deduction of tax and national insurance in respect of the sums at paragraphs 1,2 and 3 of the Judgment). Approved by: