C Harding v Halls Distribution Ltd (in voluntary liquidation): 3321200/2021

EMPLOYMENT TRIBUNALS

Case No 3321200/2021

Between

C HardingClaimant

Halls Distribution Ltd (in voluntary liquidation)Respondent

Before

Employment Judge Saward

In person for claimant

Not represented for respondent

Date 22 November 2022

JUDGMENT

[1]The respondent’s name is amended to Halls Distribution Ltd.

[2]The claim for redundancy pay is withdrawn by consent.

[3]The claimant’s claims for unfair dismissal, notice pay and holiday pay are well founded and succeed.

[4]The Tribunal will decide the question of remedy at a further Hearing.

REASONS

Conclusions

[1]By a claim form presented on 4 October 2021, the claimant complained of unfair dismissal, wrongful dismissal and holiday pay. The claimant also sought a redundancy payment. No response to the claim was filed.

[2]The respondent company is now in voluntary liquidation. The correct company name is Halls Distribution Ltd, rather than Halls Distribution. The claim should be amended accordingly.

[3]The respondent did not attend the Hearing and was not represented. In such circumstances, Rule 47 of the Employment Tribunals Rules of Procedure 2013 allows the Tribunal to proceed with the hearing in the absence of that party. Before doing so, it shall consider any information which is available to it, after any enquiries that may be practicable, about the reasons for the party’s absence.

[4]Having failed to file a response, the respondent would (under Rule 21) only be entitled to participate in any hearing to the extent permitted by the Judge. Given that the company is in liquidation, the lack of any response to Tribunal communications is unsurprising. In the circumstances, it was impracticable to make enquiries of the respondent. Having regard to the overriding objective, and the interests of the claimant in avoiding delay, the Tribunal decided it would be fair and just to proceed with the hearing in the absence of any representative for the respondent.

[5]The Tribunal heard live evidence from the claimant. Issues

Findings of fact

[6]The claim for redundancy pay was withdrawn by the claimant during the hearing. The issues before the Tribunal were:- 6.1.Did the claimant’s dismissal amounted to unfair dismissal 6.2 What was the claimant’s notice period? 6.3 Was the claimant paid for that notice period? 6.4 If not, did the claimant do something so serious that the respondent was entitled to dismiss without notice? 6.5 Did the respondent fail to pay the claimant for annual leave the claimant had accrued but not taken when their employment ended?

Findings of fact

[7]The claimant, Mr Harding, was employed by the respondent as a driver of 7.5 tonne vehicles from 6 April 2014 until his employment was terminated on 10 August 2021.

[8]On 5 May 2021 or thereabouts, the claimant was involved in a road traffic accident along the M25 motorway whilst at work. He was suspended from work on full pay pending investigation of the circumstances giving rise to the accident. The claimant was dismissed with immediate effect on 10 August 2021. The claimant was told that the insurer would no longer insure him. The claimant asserts that is false and the respondent wanted to “get rid of me”.

[9]The claimant was issued with written terms of employment particulars but he does not have a copy. The claimant did not receive payslips.

[10]The claimant believes that his contract provided for 4 weeks’ notice of termination. The claimant did not receive any payment in lieu of notice.

[11]The claimant’s annual leave year began on 1st January. The claimant had accrued but untaken holiday at the date of his dismissal for which he was not paid. The claimant was uncertain of the precise number but thought it was about 20 days’ pay. The Law Unfair dismissal

[12]Section 94 of the Employment Rights Act 1996 (‘ERA’) confers on employees the right not to be unfairly dismissed. Enforcement of the right is by way of complaint to the Tribunal under section 111. The employee must show that he was dismissed by the respondent under section 95. This is also satisfied by the respondent admitting that it dismissed the claimant (within section 95(1)(a) ERA ).

The Law

[13]Section 98 ERA deals with the fairness of dismissals. There are two stages within section 98. First, the employer must show that it had a potentially fair reason for the dismissal within section 98(2). Second, if the respondent shows that it had a potentially fair reason for the dismissal, the Tribunal must consider, without there being any burden of proof on either party, whether the respondent acted fairly or unfairly in dismissing for that reason. Breach of contract/ notice pay

[14]A contract of employment for an indefinite term may be terminated by either party giving proper notice. If proper notice is given then the contract will terminate with no liability for breach of contract whatever the reason for termination.

[15]Where there is a contract of employment with an express term stating the period of notice then that is the period applicable provided it is not shorter than the statutory minimum period within section 86 ERA.

[16]The amount of notice to which an employee is entitled should be set out in a written statement of employment particulars (section 1 ERA). Until 6 April 2020, employers were required to give employees this statement within 2 months of starting employment.

[17]In the absence of an express contractual term, it is implied in every indefinite contract of employment that it can be terminated on reasonable notice. What is ‘reasonable’ depends on the facts of each case but it must not be less than the statutory minimum.

[18]The statutory notice required to be given to terminate the contract of employment of a person who has been continuously employed for one month or more but less than 2 years is not less than one week’s notice (section 86(1) ERA). Where employed for a continuous period of 2 years or more (but less than 12 years) the period is not less than one weeks’ notice for each year of continuous employment. Where employed for 12 years or more, then the employee is entitled to not less than 12 weeks’ notice. This does not prevent a party from waiving their right to notice (section 86(3)).

[19]An employer will be in breach of contract if they terminate an employee’s contract without the notice to which the employee is entitled, unless the employee has committed a fundamental breach of contract which would entitle the employer to dismiss without notice (e.g. misconduct).

[20]Where the employer is in breach of contract, the purpose of damages is to put the claimant in the position they would have been in had there been compliance with the contract of employment. Holiday pay

[21]There will be an unauthorised deduction from wages if the employer fails to pay to the claimant in lieu of any accrued but untaken leave upon termination of employment.

[22]A worker is entitled to be paid a week’s pay for each week of leave. A week’s pay is calculated in accordance with the provisions of sections 221-224 ERA, with some modifications. Conclusions The respondent has not contested the claim.

[24]In the circumstances, the Tribunal accepts the claimant’s version of events and finds in his favour. The complaint of unfair dismissal is well founded and is upheld. This means the respondent unfairly dismissed the claimant. The claims for notice pay and holiday also succeed.

[25]No schedule of loss had been provided. That being so, the remedy to be awarded will be decided at a further hearing provisionally listed for 4 January 2023. A separate Case Management Order will be issued. REMEDY JUDGMENT 1. Following the Judgment as to liability on 21 November 2022, the respondent is ordered to pay to the claimant £5,586.99 calculated as follows:- 7 weeks net pay for wrongful dismissal £1,534.61 Pay in lieu of holiday accrued but not taken £761.55 Unfair dismissal Basic award (10.5 x £253.85) £2665.43 Compensatory Award(i) Loss from 28.9.21 to 5.10.21 £175.40

(ii) Loss of statutory rights £450 Total compensatory award £625.40 TOTAL AWARD £5,586.99 2. The Employment Protection (Recoupment of Benefits) Regulations 1996 do not apply to this award.

[1]Judgment on liability was entered in favour of the claimant at a full merits Hearing on 21 November 2022 in respect of his claims for unfair dismissal, wrongful dismissal (notice pay) and holiday pay. The claimant had not sent details of his losses prior to that Hearing for a financial award to be calculated and so this Remedy Hearing was listed to enable a schedule of loss and supporting information to be provided.

[2]As the respondent company has ceased trading, reinstatement or reengagement of the claimant is not an option.

[3]No response having being filed, the claim is uncontested in its entirety.

[4]The Tribunal took sworn evidence from the claimant who had also provided an email with his calculations as to the sums claimed.

[5]The issue before the Tribunal was how much should the claimant be awarded. Findings of fact

[6]At the date of dismissal on 10 August 2021, the claimant was aged 64 and had been employed continuously by the respondent for 7 complete years. He was employed to work 40 hours per week over 5 days.

[7]The claimant stated that he was paid at an hourly rate of £9.50, being £380 per week equating to £1,646 per month gross. This differs from the ET1 claim form where the claimant stated that his gross monthly salary was £1,100 and net salary of £950 per month. The claimant was unable to provide an explanation for the disparity and thought his claim form must be wrong.

[8]The claimant was issued with written terms of employment particulars but he has not kept a copy. The claimant was issued with payslips prior to being suspended but has not retained them. The claimant stated that his salary was paid into his joint bank account with his wife. No bank statements were produced to evidence the amount of salary received or any other supporting documentary material whatsoever.

[9]The claimant believes that his contract provided for 4 weeks’ notice of termination. This is less than the minimum statutory notice of 7 weeks for an employee with 7 years continuous service. The claimant received no payment in lieu of notice.

[10]The claimant obtained another job working as a self-employed driver on 5 October 2021 earning a higher rate of pay. Until then, the claimant was unemployed from the date of dismissal on 10 August 2021. He had applied to numerous transport companies for work as a driver and also to supermarkets.

[11]The claimant’s annual leave year began on 1st January. The claimant had accrued but untaken holiday at the date of his dismissal for which he was not paid. The claimant’s annual leave entitlement was 25 days plus bank/public holidays. 221 days of the claimant’s leave year had elapsed at the date of his dismissal. He had accrued 15 days annual leave entitlement. He had not taken any leave in 2021 due to the coronavirus pandemic.

[12]The claimant did not claim any state benefits whilst unemployed.

The Law

[13]Section 119 of the Employment Rights Act 1996 (‘ERA’) sets out provisions for calculating the basic award. For an employee who was not below the age of 41 years throughout his employment, it amounts to one and half week’s pay for each year of employment.

[14]Section 122 ERA – Basic award reductions (2) Where the tribunal considers that any conduct of the complainant before the dismissal was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.

[15]Section 123 ERA deals with the compensatory award and provides: (1) Subject to the provisions of this section and sections 124, 124A and 126, the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. (4) In ascertaining the loss referred to in subsection (1) 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… (6) Where the tribunal finds that the dismissal was to any extent caused or contributed by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.

[16]Section 124 sets out limits of compensatory awards made under section 123. In this instance, the award must not exceed 52 weeks gross pay.

[17]Where an employer has failed to follow procedures, the tribunal, when determining any compensatory award under section 123(1) of ERA, must ask itself what would or might have happened if a fair procedure had been followed. This involves an element of speculation. The proposition comes from the case of Polkey v AE Dayton Services Ltd

[1988] ICR 142

, HL, which held that where there is an unfair dismissal on procedural grounds, compensation may be reduced to reflect the likelihood that the employee would have been dismissed anyway had a proper procedure been followed. Breach of contract/ notice pay

[18]Where there is a contract of employment with an express term stating the period of notice then that is the period applicable provided it is not shorter than the statutory minimum period within section 86 ERA.

[19]The statutory notice required to be given to terminate the contract of employment of a person who has been continuously employed for a period of 2 years or more (but less than 12 years) is not less than one weeks’ notice for each year of continuous employment (section 86(1)(b) ERA).

[21]A worker is entitled to be paid a week’s pay for each week of leave. A week’s pay is calculated in accordance with the provisions of sections 221-224 ERA, with some modifications.

[22]If there is no contractual right to payment in lieu of accrued leave, the claim would be for leave calculated in accordance with the statutory formula set out within regulation 14(3)(b) of the Working Time Regulations 1998. If an employee has worked only part of a leave year, reg 13(5) of the Regulations provide for pro rata accrual. Consideration and

Conclusions

[23]Whilst the claimant gave sworn oral evidence as to his income, there was wide disparity with figures originally provided in the ET1 claim form and no adequate explanation. In the absence of any supporting information and without the provision of any net figures, I have utilised the original figures of £1,100 per month gross and £950 per month net as the basis for calculations.

[24]Should further information become available to indicate that the figures are wrong, then it is open to the claimant to apply for a reconsideration within 14 days of my written decision being sent out.

[25]The claimant was entitled to 7 weeks’ statutory notice. He is therefore due the sum of £1534.61 net (£219.23 per week x 7) for wrongful dismissal.

[26]The claimant suffered an unlawful deduction from wages in respect of accrued but untaken holiday entitlement of 15 days, and is due the sum of £761.55 gross.

[27]As the claim is uncontested there is no evidence before me to indicate that any deductions would be appropriate to an award for unfair dismissal by reason of contributory fault or Polkey.

[28]The total basic award for unfair dismissal is calculated on the basis of 1.5 weeks’ gross pay for each year of employment in which the employee was not below the age of 41. Throughout his 7 years’ service the claimant was aged over 41. His gross weekly pay was £253.85. Therefore, he is entitled to a basic award of £2665.43.

[29]Turning to the compensatory award. Having been awarded 7 weeks’ notice pay, compensation can only be awarded from the end of the notice period ending on 28 September 2021. As the claimant had secured self-employed work at a higher rate of pay with effect from 5 October 2021, there remained 4 working days when the claimant would have suffered financial loss. He is therefore awarded 4 days net pay compensation amounting to £175.40.

[30]The claimant has suffered a loss of statutory rights for which the sum of £450 shall be awarded. Employment Judge Saward