Mr L Fuyal v Mr R Randev and Mr P Randev T/a The Eagle Lodge: S/4100575/2016

EMPLOYMENT TRIBUNALS (SCOTLAND)

Case No 4100575/2016

Between

Mr L FuyalClaimant

Mr R Randev and Mr P Randev T/a The Eagle LodgeRespondent

Date 4 December 2017

JUDGMENT

Four Hundred EMPLOYMENT on 8, 9, 10 and 11 May and 30 and 31 October are ordered to pay to the claimant the sum of £1,471 (One Protection Judge: Mrs M Kearns (sitting alone) OF THE EMPLOYMENT Case No: and Seventy TRIBUNALS (SCOTLAND) (Recoupment S/4100575/2016 One Pounds) of Jobseekers’ Consultant Ms J Barnett Represented Respondents Solicitor Mr M Allison Represented by: Claimant TRIBUNAL for unfair dismissal. in payment by: Allowance Two for &

[2]Issues 1 . (3) S/41 00575/201 6 (vi) (v) (iv) (iii) (ii) (i) The Tribunal identified the following issues:- arrears of pay and other payments. The respondents resisted all claims. Employment On 29 January claimant, who is now 34 years of age, worked for the respondents as a chef. Lodge and a number of other restaurants The respondents and Twenty are ordered to pay to him the sum of £1 ,929 (One Thousand, The respondents Whether the claimant is owed arrears of pay; Whether the claimant is owed holiday pay; If so, the remedy to which he is entitled; If so, whether that dismissal was unfair; Whether the claimant was dismissed; performance Whether Nine Pounds). Tribunal in which he claimed Page 2 the contract are a partnership unlawfully and consequently unenforceable; the REASONS deducted of employment claimant engaged in the operation of The Eagle sums from the claimant’s presented in and around Glasgow. unfair dismissal; was tainted by illegality an application Nine Hundred holiday pay; wages The and in

[6]5. 4. Findings in Fact 3. Evidence S/41 00575/201 6 which specializes move took place through a recruitment agency called Five Star International, moved to the respondents’ 2010 on a sponsorship completed three years’ service. He came to the UK in or around September of his employment The claimant was born in Nepal on 21 August 1 983. At the time of termination Indian sub-continent chefs and kitchen staff at the restaurant come from abroad, often from the Immigration Rahul Randev has held an A rated Sponsor Licence from UK Visas and partnership employs a number of workers from abroad. Since 8 July 2009 Mr employs Lodge, 2 Hilton Road, Bishopbriggs, restaurants The respondents The following facts were admitted or found to be proved:- Ms Pauline Monaghan. Randev, Mr Pravesh Randev, Mrs Marion Rumsby, Mr Graeme Brown and at the Eagle Lodge. The respondent called the following witnesses: Mr Rahul evidence from the claimant and Mr Gokrana Raj Panthi, a former colleague The parties lodged a Joint Bundle of Documents (“J”). (vii) Whether other payments are due to him. around 100 staff, 40 of whom work at the Eagle Lodge. which permits the firm to employ migrant workers. Many of the in and around Glasgow. One of their restaurants are brothers who work in partnership running a number of in placing migrant with the respondents visa. He initially worked for another employer, but he employment as a chef on 6 February 2012. The workers G64 2PN. In total the partnership he was 32 years of age and had with employers. The Tribunal is The Eagle Mr Rahul heard The

[8]7. S/41 00575/201 6 £1,627; 2014 - 15 from Mr Rahul Randev, Mr Pravesh Randev from 6 April Mr Pravesh Randev from 6 April 2013 to 5 April 2014 Pay £17,584.80 to 05 April 2013 Pay £6,820 Tax £645.80; 2013 - 4 from Mr Rahul Randev, £806.00; from Mr Rahul Randev, Mr Pravesh Randev from 22 October 2012 Eagle Lodge from 23 April 2012 to 21 October 2012 Pay £8,089.90 show he received the following sums: '2012 - 13 from P&R Randev t/a The The claimant has recently established worked by him, nor were other migrant employees. this was done. The claimant was not, at any stage paid for any overtime simple gross figure without adjustments by BACS into his bank account and around six months, Five Star International accommodation The accountant the books and tax and National £270. With effect from 23 April 2012 the claimant’s salary was put through gross salary would have been £346.15 and he was only receiving tax and National Insurance had been deducted and remitted to HMRC as his Insurance were not remitted to HMRC for this period. The claimant assumed accountant who handled payroll had not been notified and tax and National although made for accommodation fluctuated and when he queried this he was told that adjustments 78). He was receiving around £270 per week at this time. However, his pay the first six or seven months he received his weekly wages in cash (J 77 & Initially the claimant was not clear how his pay was being calculated and for issues. department which assists them with visa applications and other immigration addition Randev uses the agency to engage all the firm’s migrant employees. sums to finding and recruiting Mrs Rumsby when she received notification from his manager. paid and travel. He believed was paid in cash net, Mrs Rumsby, or travel. Between 2 February and 22 April 2012, claimant Insurance the employees fluctuated from HMRC (J84) that their records he was being paid lawfully. advised that he should be paid a were paid on it by the firm’s due the agency has a legal to adjustments the firm’s had been around After Tax Tax for In

[10]9. S/41 00575/20 16 of service. from January to December. Notice on both sides was one week for each year as soon as possible. ” The contract also provided that the holiday year ran must be taken up with your manager immediately. give as much notice as possible of such requirement. prepared to work such hours as may be necessary and the management week to week and overtime working is frequently is a seven-day as are necessary for the discharge of your duties. The licensed trade industry “Your working week comprises 40 hours. You are required to work such hours Under the heading “Hours of Work” the statement provided at paragraph deductions will be notified to you beforehand and itemised on your payslip. ” negligence made to you by the Employer or losses suffered by it as a result of your you to the Employer including without limitation any overpayments absolute discretion to deduct from your pay any sums which may be due by not monthly. The clause also stated: “The Employer reserves the right in its salary shall be reviewed annually shall be paid monthly calculated at the gross yearly rate of £1 8,000. 00. Your Remuneration at statement was dated 6 February 2012. In relation to pay, the statement stated signature was witnessed by Dan Doherty of Five Star International. of terms and particulars of employment” (J96 to 101) which he signed. His Some months after the claimant started work he was issued with a “statement £9,346.05 Tax £767.20’. Randev, Mr Pravesh Randev from 6 April 2015 to 8 November 2015 Pay 2014 to 5 April 2015 Pay £17,999.80 paragraph or breach of the Employer's week operation. Hours of working in restaurants shall be £18,000.00” under the heading .... "The claimant was in fact paid weekly, The paragraph Tax £1,598; 2015 - 16 Mr Rahul rules and regulations. “Remuneration”’, Any errors will be rectified required. You must be Any errors in payment went on: “Your wage “Your total vary from Any such or loans The will 5:

[12]1 1 . S/41 00575/201 6 way. He now understands a lawful way and that the respondents acquiesce in any such arrangement. and National have any say in how much he was given. The claimant did not know that tax staff were given in tips and how the tips were divided. The claimant did not distribute them to the staff. It was Mr R Randev who decided how much the Graeme around £40. He would do the same for the other staff. Pauline Monaghan or them the tips he was allocating in cash. He normally allocated the claimant normally on a Saturday, he would make up envelopes for staff and put into The procedure around the end of 2014 the claimant received around £40 per week in tips. for tips so that the kitchen staff participated as well. The effect was that from Mr Randev’s proposed solution was that he would change the arrangements claimant and some of the other kitchen staff raised this with Mr Rahul Randev. properly for the number of hours they were working. In or about 2014 the not paid for overtime the claimant considered that they were not being paid week. Because he and the other migrant employees were salaried and were per annum for a 40 hour week but in reality he was working 55 hours per made a specific request. Under his contract the claimant was earning £1 8,000 handed out by others and not always received by the claimant unless he wages. Although The claimant repeatedly paid for overtime worked over 40 hours per week. normally worked 55 hours per week (J1 03). However, he was not, at any point Regulations (as amended) shall not apply to your employment. "The claimant overtime, for each 7 day period as set out in Regulation 4 of the Working Time “You agree that the limit of an average working time of 48 hours, including Paragraph 1 4 of the contract is headed Working Brown Insurance Page 6 brought in by Mr Randev at that time was that each week, would then come through, Mrs Rumsby were not being paid on these tips and did not raised with Mr Rahul Randev an issue with his that where an employer dictates the amount an printed payslips He assumed that he was being paid in were dealing with PAYE in the usual pick up the envelopes Time Regulations’. every week, these were It states: and 1 3. S/41 00575/20 16 document was in the following terms:- undertaking to the claimant that he would only get his letter for the ILR if he signed the Leave to Remain (ILR) Undertaking” the claimant “sign a form” before he would give him the letter. Mr Randev then presented ongoing employment. (“ILR”) and would require a letter from him confirming that he was making an application for indefinite leave to remain in the UK In or about late September 201 5 the claimant mentioned to Mr Rahul Randev relevant PAYE payments are made. (J56 para 2). employee (a) You shall repay the company as follows:- the attainment of your ILR. associated some or all of the fees, expenses including your visa/work permit/sponsorship) statusfand after the Company consideration significant financial investment in obtaining your immigration status. In Kingdom, “Upon receives he (the employer) and if he did not sign it his employment may not continue. STAND AT £4,200. The amount that you will be required required within one month of you being granted ILR status you will be (employment is terminated on the grounds of gross misconduct, If you resign from your position with the Company, with a document Page 7 being granted all other previous costs associated with your immigration you acknowledge with of this, you agree that if your employment Mr Randev indicated that the claimant would have to to pay 100% of the Costs WHICH your has incurred Indefinite immigration (J45) entitled “The Eagle Lodge Indefinite that the Company and told him to sign it. He made it clear is responsible liability for the cost of your ILR Leave status and other costs (the to Remain you will be liable to repay up for ensuring will have made a to the details AT PRESENT and in the terminates or if your including that the Costs) United of his The to

[14]S/41 00575/201 6 was not correct. The claimant had paid his own UK Visas and Immigration standing at’ £4,200 toward the claimant’s visa/work permit/ sponsorship, this the document He felt coerced into doing so and did not consent to it voluntarily. Although sign. The claimant accordingly signed the document on 29 September 201 5. He implied that the claimant’s employment may not continue if he refused to the respondents would not complete the letter he needed to secure his ILR. evidence. However, Mr Rahul Randev told him that if he did not sign it then to in the undertaking extension himself. He therefore did not understand how the £4,200 referred his ILR application. He had also paid UK Visas and Immigration unhappy about it because he had paid his own initial visa fee and the fee for understood and agreed to its terms. Initially, he refused to sign it. He was very The claimant from your final salary or any outstanding payments due to you. " You agree to the Company deducting the sums under this clause You shall not be required to repay any of the costs if:- (c) (b) (a) month you have worked since you obtained your ILR status. repay the Company will be reduced by 1/1 8 th for each complete was told to sign the document asserts fundamental breach by the Company. You terminate your employment in response to a employment summarily; or where it was entitled to and did terminate your The Company terminates your employment, granted ILR status; You left the Company more than 18 months after being had been calculated and he was given no supporting that the respondents had paid costs 'at present to say that he had read, for his visa except

[16]1 5. S/41 00575/201 6 after tax. The claimant said that if he was not paid for his additional hours and being paid for 40 hours. He said he should be getting at least £400 per week hours. The claimant was in fact normally working 55 hours per week but only be included in his wages. He asked for an increment to cover his additional but if he had to do the long hours he wanted to request that payment for them review. He said that he was working long hours and this was difficult for him about being refused two days’ leave. He also asked Mr Randev for a salary discussion, When Mr Randev arrived, he and the claimant went to the banquet hall for a The claimant carried on with his work. called Mr Rahul Randev who said he would come and speak to the claimant. shortages. The claimant made clear that he was unhappy and the Head Chef The Head Chef refused the claimant’s leave request saying that he had staff busy, so the claimant was concerned that he might lose his remaining leave. holidays in December that it would not carry forward to the next year. Staff are not permitted to take of his annual leave entitlement. The claimant understood from the other staff year. So far, in the year to October 2015, the claimant had taken one week days for his family. The claimant was entitled to 5.6 weeks’ annual leave per from the Head Chef, Mr Graeme Brown. He told him he really needed the two On or about 1 1 October 201 5 the claimant requested two days’ annual leave 6/2/2012. therein that the claimant Randev provided the letter he needed (J48) on 5 October 2015. He stated the claimant had signed the document other costs paid by the respondents which were specific to the claimant. Once application.” extension of Tier 2 (General) Visa, including preparation and submission January 2015 (J121) for: “Re: Lekha Nath Fuyal: Work in connection fees. Mr Randev had paid an invoice to Five Star International which took place in Hindi. The claimant told him he was upset The invoice was for £1,000 plus VAT. However, there were no because it is too busy. November was also looking had been employed on 29 September by the respondents 2015 Mr Rahul dated 26 from with of 20 15 30 25

[18]17. S/41 00575/201 6 then tried to contact Mr Randev himself to request payment of his wages but was not contactable and that the claimant could not meet him. The claimant Mr Randev had not replied. Eventually the Head Chef said that Mr Randev sort it out. Each time the claimant chased this with the Head Chef he was told the Head Chef Graeme Brown, who said he would contact Mr Randev and respondents on 1 9 October 201 5. He raised this non-payment repeatedly with October Star on 15 October 2015 for this. He received his ILR documents The claimant’s ILR was granted on 13 October 2015. He paid £400 to Five payment he received from the respondents. hours. His salary was always paid a week in arrears. This was the last by BACS on 12 October 201 5. This was £346.1 5 gross being payment for 40 The claimant was paid the sum of £294.81 by the respondents two weeks. application. The claimant continued to work for the respondents for a further granted) was worried that Mr Randev might jeopardise his ILR (which had not yet been the claimant calmed himself down, went downstairs and started working. He salary on his payslips). Mr Randev’s suggestion was not adopted. After that, claimant was planning to purchase a property and needed evidence of his Randev that his payment must all be done properly through the bank. (The The claimant did not agree to this suggestion from Mr Randev. He told Mr others was to put 1 6 hours on his payslip and pay the remainder cash in hand. he could not give this to him, but that what he could do, and had done for increment to cover his additional hours plus two days’ leave. Mr Randev said would make him happy so he would want to stay. The claimant said the leave. The claimant felt trapped. Mr Randev then asked the claimant what before finalising his ILR application undertaking to stay and he could not just to him: “How can you /eave?" He reminded him that he had signed a contract not allowed to take his holidays he would consider leaving. Mr Randev said 2015. by contacting Immigration was not paid his weekly and withdrawing his support wages in net salary by the for the on 16 30 25

[19]S/41 00575/201 6 subject heading “Resignation” The claimant emailed Mr Rahul Randev later on 27 October 2015 with the not work his notice. was also owed 3.6 weeks’ holiday pay amounting to £1 ,471 . The claimant did owed two weeks’ wages plus his lie week, making a gross total of £1 ,226. He what was going on. At the point his employment terminated, the claimant was did not take or return his calls and did not instruct the Head Chef to tell him wages for two weeks with no explanation in circumstances purposes stated therein. Finally, the last straw was the non-payment respondents undertaking Leave to Remain Undertaking* on 29 September would lose it; the fact that he had been coerced into signing the ‘Indefinite likelihood that he would be unable to take his remaining annual leave and Randev’s refusal to properly address this on 1 1 October 2015; the perceived requirement receive put his resignation job and he had begun looking for alternative work. Mr Randev asked him to week his wages were not paid that he would probably have to look for another no explanation and was running out of money. He had realised after the first working day was 25 October 201 5. He had not been paid for two weeks with claimant said to him and to the Head Chef that he could not return. His last about 25 October 2015 Mr Rahul Randev came into the restaurant explanation on that date to find out why he had now not been paid for two weeks with no also not paid his wages on 25 October. He attempted to telephone Mr Randev he could not get any reply and did not receive payment. The claimant yours management. “Dear sir. his salary. The reasons and Mr Randev was not returning his calls. Finally, late on or if he left, most of which had not been genuinely incurred for the required that he work additional hours for the same low pay and Mr I would like to mention a few experiences of working with in writing. The claimant did so hoping he would then him to ‘repay’ unspecified I left job because you make fake contract before (J38) in the following terms:- for his resignation “costs” of £4,200 2015. The fact that this were the continual where Mr Randev and the of his to the was 15 10 21 . 20. S/41 00575/201 6 following terms Mr Rahul Randev wrote an undated response to the claimant’s email in the 3 week holiday...” pay me then I left job. . .how ever he still need to pay my 4 week weages and was expecting to have days off. . .He wasn ’t positive to do that. . . when he stop which wasn’t fear. I request him to pay my pending wedges after my ILR & I International. On the same “Dear Lekhanath Lekanath Fuyal” Yours sincerely me. If no then I have to get help from legal remedy. holidays to be payed on my account. . ..Any thing you want added reply service. I wold like to mansion my 4 week weages and 3 week pending all the help saport cooperation that they have given to me during my working operchuneat. I wold like to thanks management last week conversation with you on 18/9/15 till 2 week notice. However Dear sir I would like to tender my resignation Management To Rahul Randev you never take proper response. How ever. call you & text you many time. I try call you Sunday on 25/10/15 but week wedges & 3 week holiday. Head chef say that we was trying to expecting to payed my wedges on time. You still have to payed my 4 My ILR (which I still can explain on right place upon request) I was In his email he stated: '7 left job because he make fake contract Page 12 date the claimant of oregano I wold like to thanks all the team members for emailed of oregano that provide me with to Teresa upon yours ask. Of the Doherty of Five Star 15 10 S/41 00575/20 16 status.” resigned from our employment In addition, we will write to UK Immigration to inform them that you through the small claims court, our behalf. Action taken by the debt company will include legal action matter to a debt collecting company who will recover these costs on there remains an outstanding balance of £2,555. We have passed the with your contract of employment It is correct we have withheld wages due to you. This is on accordance alone exceed £4,000. [amended in hand-writing to £4,200.] amount of investment on our part, costs attributed to your employment opportunity Company, As following attainment on their ILR status. Company experiences a high level of attrition with sponsored workers which you refer. Our legal advisers status within the company For the avoidance of doubt, all sponsored workers reaching their ILR of your ILR. position that you signed a fake contract prior to receiving notification Company I write further to your recent communications RESIGNATION you have accepts your resignation. to work within the UK. To do so, requires a significant through FROM EMPLOYMENT acknowledged your sponsorship are required to sign the undertaking within four days of receiving your ILR within and your signed undertaking. I do not however accept drafted this document has provided your communications, and confirm you with that the as the your the the As to

[23]Observations 22. S/41 00575/201 6 had begun on 2 February 2012, he then changed this in evidence to 23 April Immigration on 5 October 201 5 and in his ET3 that the claimant’s employment employment than 40 hours. average of 45 hours; and then again that he did not need staff to work more put on the rota for 40 to 50 hours by the Head Chef; that they worked an working more than 40 hours; that the general practice was that people were of the following: that there was no requirement for his business to have staff unpaid in excess of their contractual hours. In cross examination he stated all contradicted himself in relation to whether staff were required to work hours Rahul corroborated by Mr Panthi, whose evidence I also accepted. By contrast, Mr their happened with tips and migrant workers being made to work far in excess of The claimant witnesses, particularly Where the claimant’s salary is £22,000 per annum. working 45 hours per week for the Village Hotel and Spa at Atlantic Quay. His His net weekly pay was £265. On 27 October 2016 the claimant Street, working 30 hours per week at £10 per hour. His gross pay was £300. claimant had secured employment few days of the termination weekly pay was £346.15 plus £40. His net weekly pay was £294.81 . Within a week. He was working an average of 55 hours per week. (J 103). His gross annum with the respondent plus a share of tips amounting to around £40 per week. At the time of his resignation withholding three weeks’ wages and three weeks’ holiday pay net at £294 per The figure of £2,555 was calculated by Mr R Randev on the basis that he was contracted Randev’s on the evidence start date. Having stated in a formal letter for UK Visas and made He also contradicted hours evidence appropriate Mr Rahul Randev I preferred the claimant’s account. evidence and of his employment was receiving conflicted concessions. unsatisfactory at the Devoncote the claimant was earning £18,000 per himself less with that of the respondents’ favourable His evidence regarding with the respondents and Hotel on Sauchiehall inconsistent. treatment the claimant’s about what began was He the

[24]S/41 00575/201 6 him to put through fewer hours and pay them the balance in cash he was had introduced the ILR undertaking) cross examination and volunteered (in answer to a question about when he which did not reflect well on his credibility. Indeed, he elaborated not averse to defrauding the Revenue but did not want to risk getting caught, prepared to make. "This statement appeared to suggest that Mr Randev was hand. Anything more than that was too much a risk and not a jeopardy I was Randev said 'The £50 cash was the most I could put through for him cash in much in terms of defrauding paid cash in hand but that Mr Randev had refused to do it because it was “too claimant) that only 16 hours went through the books and the remainder all. Ms Barnett put to the claimant that the suggestion had come from him (the the respondents had not agreed to it and that it was not adopted. Indeed, it was accepted by others. He was clear that this suggestion had come from Mr Randev, that he cash in hand and putting through 16 hours the same way he had done for done through the bank but that Mr Randev had said he would be paying it denied this. He said that he had told Mr Randev that his payment must be remainder of his working hours paid cash in hand. The claimant vehemently asked Mr Randev to put through only 16 hours per week and wanted the Mr Randev would say that the claimant did ask for £400 after tax but that he per week after tax. Ms Barnett put to the claimant in cross examination The claimant accepted that he had asked that his salary be raised to £400 R Randev concerned The most important conflict between the claimant’s evidence and that of Mr truthful witness. the numerous Insurance were paid on the claimant’s salary per that letter. I concluded from The 23 April 2012 date coincides with the date from which tax and National sight in the bundle of the claimant’s letter of 2 February 2017 from HMRC. 2012. Mr Allison suggested that the change was occasioned by Mr Randev’s contradictions that from that point Mr Randev did not pay the claimant at the content of the conversation in his evidence that he was not a frank and the Revenue”. that when migrant workers requested In his witness statement of 11 October 2015. on this in was that Mr

[25]S/41 00575/201 6 and then worked on as that made no sense in the circumstances. before he resigned. I did not accept that he resigned verbally on 1 1 October have worked for at least one week and on his own evidence probably two J40 states that wages had been withheld from the claimant. Thus, he must attempted call on 25 October to Mr Randev. Mr R Randev's undated letter at wages being part of the reason 2015. The claimant’s email of 27 October 2015 refers to four weeks’ unpaid that it was sent at 22:04 on the claimant’s the date. Doing my best to try and piece the evidence together I concluded sent after the claimant’s resignation, nothing on the copy lodged assisted with wetness for I’m going to cases him shortly.” Although this text was clearly I have email to Rahul but he never reply me. Anyway you will be proper was happy to work with you if he payed 4 week wedges and 3 week holiday been explane everything with you before I left that job about my payment. I the good time chef. Had really wander full good experience with you. I have Head Chef dated only “Yesterday him to ask if he had lost his bus pass. A third text from the claimant to the said that he would be 20 minutes late. On 1 3 October the Head Chef texted Monday 12 October that he was still employed on that date as his message that date. It was clear from a text the claimant had sent the Head Chef on October 2015, but they accepted that he had worked in the premises after respondents’ concluding claimant’s resignation and I have done my best on the evidence available, There was confusion on the part of all the witnesses about the date of the been granted and received by him. reasons set out below and not least because at that date his ILR had not yet conclude that the claimant had resigned verbally at that meeting, for all the conversation level. sometimes able to help and put it through for them, but it depended on the This that the claimant reflected position was that the claimant had verbally resigned was agreed by both parties to be 11 October 2015. I did not Page 16 poorly on Mr Randev’s resigned 22:04” stated: “Thanks you so much for all for his resignation. late on 25 October last working day of 25 October credibility. It also refers to an The 2015. The date on 11 I also of 15 10 25 20

[26]S/41 00575/201 6 getting. She also admitted that she could not say that the claimant had been could have been his tips and she did not really know what the claimant was claimant open an envelope and take out cash, Ms Monaghan admitted that it she was washing dishes to be frankly incredible. With regard to seeing the Hindi and English upstairs in the function suite through an open door while 11 October 2015 because she had overheard the exact terms of it in mixed corroborate Mr R Randev’s account of his conversation with the claimant on evidence in a careful and measured way and I found her claim that she could interpreter texts and emails in the bundle, it is abundantly clear why he requires claimant had an interpreter. Having read the claimant’s written English in his involved in the case and give evidence primarily by anger on hearing that the with the evidence of Ms Monaghan. it with him. I did not find his evidence credible. I was similarly unimpressed did not claim to have seen him open it and admitted never having discussed claimant’s tips) when he said he had no involvement in the alleged process, to the claimant (and, in particular, to explain how he could possibly have known what was in an envelope given was paying the claimant an additional cash in hand payment. He was unable His evidence appeared tailored to support Mr Rahul Randev’s claim that he process it accordingly. she was given from Mr R Randev and the managers at face value and simply but did not deal with tips. Generally, Mrs Rumsby would take the information respondents’ business practices. She was responsible for reporting to HMRC best to give frank evidence. respondents’ evasive as to be of little assistance to the Tribunal. Mrs Marion Rumsby, the With regard to the other witnesses, Mr Pravesh Randev’s evidence was so October because his resignation might have put the ILR in jeopardy. thought it unlikely he would have resigned before he received his ILR on 16 for formal court proceedings. accountant was a professional and honest witness who did her Page 17 I did not find Mr Brown to be a satisfactory She was clearly unaware how he knew it was cash, but not the She admitted being motivated Ms Monaghan did not give her of some of the witness. to get an 20 15 30 25 29. 28. 27. Constructive Applicable Law S/41 00575/201 6 breach of the implied term of mutual trust and confidence. In these proceedings (iv) (iii) (ii) (i) contract by the respondent. the common without notice by reason of the employer’s conduct are judged according to The circumstances an employee is dismissed if establish that he has been dismissed. In a claim for constructive to account for these himself. told that tax and National Insurance had not been paid on his tips and he had Unfair Dismissal that he did not delay too long in resigning. reason; and that he resigned that the breach was sufficiently serious to justify his resignation; that there was a breach of a contractual term by the respondent; “(c) terminate it without notice by reason of the employer’s conduct. ” employed the employee Page 18 law. in which an employee is entitled to terminate a contract The claimant must establish the claimant’s case was that the respondent in response In essence, the claimant requires to prove: in circumstances terminates dismissal to the breach and not for any other Section 95(1 )(c) of ERA provides that the onus rests on the claimant the contract in which a repudiatory under he is entitled That term was which breach of was in he is to to 15 10

[32]31 . 30. S/41 00575/201 6 then move on to the second stage and apply Section 98(4) which provides:- If the employer is successful (Section 98(1)). show the reason for the dismissal dismissal is fair. There are two stages. The first stage is for the employer to 98 of ERA sets out how it should approach If the T ribunal is satisfied that there has been a dismissal in this case, Section Ltd

1981 ICR 666

EAT:- Wilkinson J (as he then was) in Woods v WM Car Services (Peterborough) no reasonable destroy it or be calculated or likely to destroy it. Furthermore, to the root of the trust and confidence between employer and employee prove that the respondent was guilty of conduct that was so serious as to go In order to establish a breach of the implied term the claimant requires term that:- described by the House of Lords in Malik v BCCI

[1997] IRLR 462

HL as a it." sensibly, is such that the employee cannot be expected to put up with and determine whether it is such that its effect, judged reasonably “The tribunal's function is to look at the employer's conduct as a whole and employee." damage the relationship itself in a manner calculated “The employer shall not, without reasonable and proper cause conduct and proper cause for the conduct. in establishing of trust and confidence between and that it is a potentially and [or] likely to destroy or seriously the reason, the Tribunal the question of whether In the words of Brown there must be fair reason employer must and and the to

[33]Illegality Discussion S/41 00575/201 6 me to Hall v Woolston Hall Leisure Ltd

2000 IRLR 578

CA in which the Court illegal. With regard to participation, shown that the employee knew about the facts that made the performance secondly there must be participation. conditions must be met: Firstly, the employee must know of the illegality, and performance, this result. object of defrauding HMRC, or had performed the contract in a way that had employer to show that it had either contracted with the employee with the v Cebrian (UK) Ltd

2004 ICR 568

CA that the burden of proof is on the As Mr Allison submitted, the Court of Appeal made clear in Colen and another way, for example through some tax evasion in the way the employee is paid. performance illegality employment The respondents* first submission and Decision (b) (a) unfair (having regard to the reasons shown by the employer) - (1), the determination “ ... Where the employer has fulfilled the requirements in performance As Ms Barnett occurs where a lawfully made contract is performed in an illegal between substantial merits of the case.” Shall sufficient reason for dismissing the employee, and employer acted reasonably or unreasonably and administrative resources of the employer's undertaking) the Depends on whether in the circumstances such as to prevent enforcement Page 20 be determined and consequently submitted, of the question whether the dismissal is fair or Mr Allison and Ms Barnett both referred in this case was that the contract and the respondents in accordance With regard to knowledge, in order to establish unenforceable. of the contract, with (including the size equity in treating it as a was tainted by of sub-section illegality Illegality it must be two basic and the in in of 15 10

[36]35. 34. S/41 00575/201 6 and that this was the “General Manager”. Conveniently, Mr R Randev claimed that the business had a ‘troncmaster’ additional cash in hand supplement as he alleged. was, in fact a reference to his allocation of the tips and that there was no would put £40 cash into an envelope each week for the claimant and others together because I concluded that Mr Rahul Randev’s description of how he of £40 (ET3) or £50 (R Randev witness statement) per week on top of his tips and (b) the allegation that the claimant was paid a cash in hand supplement I have considered(a) the failure to pay tax and National Insurance (c)

(b) (a) In the present case the respondent relies upon:- party to a deception on the Revenue?’ The essential question was said to be ‘Has the employee knowingly been a statute or common law, precluding of the employee’s knowingly commit a fraud on the Inland Revenue in the payment and receipt 359 in which the EAT held that where both the employer and employee to the case of Newland v Simons and Wilier (Hairdressers) sufficient degree of participation performance. facts that make the performance contract that has been performed illegally if, in addition to knowing about the of Appeal held that an employee Other allegations of possible illegality. to his wages; and/or The allegation that the claimant was paid a cash in hand supplement The failure to pay tax and National Insurance on tips; and/or It is a question of fact in each case whether there has been a Page 21 remuneration, by the employee. Ms Barnett drew attention illegal he actively participated in the illegal the contract becomes will only be prevented the enforcement of employment this was said to be a one prohibited from enforcing in relation to tips Ltd 1981 IRLR on tips; rights. by a 30 25 S/41 00575/201 6 credible. At the end of it he stated that it was the duty of his four managers at getting in tips. His evidence on this issue was contradictory and simply not HMRC themselves for tips and also that he knew how much the claimant was that all staff including the claimant had been told that they had to account to say 7fs not my responsibility”; discussed at a staff meeting so that if the taxman were to ask him, he could ignorant of the division of tips that he would leave the room if they were was that on the one hand he was so scrupulous about remaining completely did I believe his evidence about having nothing to do with tips. His testimony that he had given the claimant a cash in hand payment on top of his tips, nor Rumsby's testimony on this point and did not believe Mr Randev’s evidence that as far as she knew, tips aside, this did not happen. I accepted receiving cash supplements over and above their wages paid by BACS and and its end of year accounts) said she had no awareness of some staff Rumsby, (who is responsible for the firm’s payroll, its declarations to HMRC it was £40, not £50 and he agreed!) Significantly the firm’s accountant, Mrs However, it was then put to him in a leading question in re-examination witness statement, amount the claimant accepted receiving in tips. Mr Randev’s evidence in his with his pay slip. (The amount per the ET3 was claimed to be £40, the same personally used to put cash in an envelope for the claimant every week along mentioned his share of the tips and that it was generally between £35 and £40. As that the only cash he received weekly from the respondents was payment of effectively the troncmaster. Mr R Randev himself decided how much staff would get in tips and was ‘protested too much’ about this and I preferred the claimant’s evidence that claimed he (Mr Rahul Randev) had nothing to do with the tips. I felt he worked at the Eagle Lodge. Neither was called to give evidence.) Mr Randev (Significantly, witness, Kevin Holmes, who, Mr R Randev claimed, had now left and would not be a or possibly, above, Mr R Randev testified Mr Brown stated that both Kevin Holmes and Mark Taylor still Page 22 maintained Mark Taylor who would not be a witness The claimant’s evidence, which I accepted was but on the other hand, that he knew for certain in cross examination in some detail about how he was that it was £50. either. Mrs that

[37]S/41 00575/201 6 the deception of HMRC. to pay tax. I am also not satisfied that the claimant knowingly participated knowledge circumstances paid on his tips. I do not find that the contract was unenforceable claimant should somehow have known from his payslips that tax had not been put before me to the contrary, to negate Ms Barnett’s submission Guidance at (J56). The guidance would appear, in the absence of anything assume this had been done. That seems to be the effect of the Government make sure the tax was paid on the tips and the claimant was entitled seems to have been correct. It was the responsibility in this deception of HMRC. Mr Randev testified there was a tronc and that asked questions. However, I am satisfied that he did not knowingly participate normally. The claimant may have relied on assumptions and may not have being paid in a lawful way and that the respondents were dealing with PAYE and did not acquiesce in any such arrangement. not know that tax and National Insurance were not being paid on these tips claimant did not have any say in how much he was given. The claimant did how much the staff were given in tips and how they were divided. above. Put shortly, on the facts of this case, it was Mr R Randev who decided Mr Panthi for all the reasons set out in the observations The claimant also denied this. I preferred the evidence of the claimant say this was that they were “completely Panthi’s response when it was put to him in cross examination that they would kitchen staff started receiving tips they were told they were tax deductible. It was claimed in evidence by Mr Brown and Ms Monaghan that when the knocking, it’s their responsibility, up his position as “All I know is, if a troncmaster is in place and HMRC come that he had said to them ‘Whatever way you do it is down to you" He summed The Eagle Lodge to make sure the tips were put on employees’ payslips, but of the fact that the troncmaster was not meeting his responsibility as I am not satisfied that the claimant had the necessary not mine. ’’ lying". “Nobody ever told me that." He assumed that he was of the troncmaster on the evidence in these that the The and Mr in to to Was the claimant dismissed? Unfair Dismissal claim 41 . 40. 39. 38. S/41 00575/201 6 rejected. tainted by illegality in performance In summary the respondents’ no suggestion that the contract was actually performed in this way. claimant was on 12 October 2015, so even on the respondents’ event accepted HMRC, I preferred the claimant’s R Randev’s admitted willingness to remunerate staff in ways that may defraud by him. Given the unsatisfactory suggestion of the falsification of hours came from Mr Randev and was refused accepted that a discussion Randev should falsify his hours to reflect a 16 hour week. The claimant 2015 for a wage rise as a cash in hand payment, along with a request that Mr allegation that the claimant made a request to Mr R Randev on 16 October A further ground of possible illegality put forward by Ms Barnett was an know of or participate in the illegal performance. respondents facts therefore believed he was being paid lawfully. I have concluded from these salary would have been £346.15 and he was only receiving around £270. He National Insurance had been deducted and remitted to HMRC as his gross remitted to HMRC for this period. However, the claimant assumed tax and cash. Mrs Rumsby was not notified and tax and National Insurance were not Between 2 February and 22 April 2012, the claimant was paid his net pay in Looking at (c) other areas of possible illegality: that although between 6 February and 22 April 2012, the claimant that the last payment tax and National took place with Mr Randev but stated that the argument that the contract of employment was nature of the respondents’ account of this discussion. and is consequently made by the respondents Insurance were not paid by the unenforceable evidence and Mr It was, in any case there is did not is

[43]42. S/41 00575/201 6 (v) (iv) (iii) (ii)(i) set out at paragraph 1 1 of the ET 1 . These are:- number of what he described as ‘egregious breaches’ by the respondents Mr Allison submitted that this claim is a ‘last straw’ case. He referred to a (iv) (iii)

(ii) (i) probabilities’. to show that he has been dismissed. The standard of proof is the ‘balance of by reason of the employer's conduct”. The burden of proof is on the employee notice) in circumstances employee terminates the contract under which he is employed (with or without Section due, and to pay them thereafter. the respondents’ the refusal to allow the claimant to take leave; employment in exchange for cooperating with his ILR; the respondents he preparation of a contract based upon ‘false claims’; The respondent failed to pay the claimant the minimum wage; that he did not delay too long in resigning. reason; and that he resigned that the breach was sufficiently serious to justify his resignation; that there was a breach of a contractual term by the respondent; 95(1 )(c) ERA provides The claimant requires to establish: Page 25 failure to pay the claimant’s extorting in response to the breach and not for any other in which he is entitled to terminate it without notice that an employee the claimant’s signature wages when they fell is dismissed and continued if “the as

[46]45. 44. S/41 00575/201 6 claimant and the other migrant employees minimum employment. £346.15. His pay was accordingly £6.29 per hour for the whole period of his that the claimant evidence, that of Mr Panthi and the copy rota lodged by the claimant at J103 of their evidence, evidence lodged by the respondent, and in view of the unsatisfactory national From 2009 employers claimant’s period of employment went up each October and was as follows:- their cumulative I have considered each of Mr Allison’s arguments in turn, and then addressed his calls and did not instruct the Head Chef to tell him what was going on. with no explanation in circumstances where Mr Randev did not take or return stated therein; and the last straw non-payment respondents, this undertaking the ‘Indefinite Leave to Remain Undertaking’ on 29 September 201 5; and that annual leave and would lose it; the fact that he had been coerced into signing 2015; the perceived likelihood that he would be unable to take his remaining same low pay and Mr Randev’s refusal to properly address this on 1 1 October as follows: the continual requirement that he work additional hours for the I accepted the claimant’s evidence that the reasons for his resignation From October 201 5: From October 2014: From October 201 3: From October 2012: From October 201 1 : minimum wage prescribed Thus, from October 2013, the claimant was paid less than the most of which had not been genuinely incurred for the purposes Page 26 effect. With regard to (i) the minimum required him to repay unspecified worked 55 hours per week. His gross weekly pay was I have concluded wage. In the absence have not been permitted £6.70

£6.50

£6.31

£6.19

£6.08 per hour; by law. This was a breach of his contract. The on the basis of the claimant’s employed by the respondents of any contrary of his wages for two weeks to count tips toward the “costs” of £4,200 to the wage during the documentary nature were oral

[47]S/41 00575/201 6 visa extension. His answer (contrary to Ms Barnett’s submission) was that he claimant in cross examination to have been "invested in the claimant’s statement, which contains no specification at all in relation to the "costs” said that £1,000” would be that if he ever left working for me I would expect him to reimburse agreed and had said that he would contribute £1,000 “and the only thing extension because it was very expensive. him in November 2014 and asked if he could contribute to the cost of his visa September 201 5. Mr Randev’s evidence was that the claimant had spoken to referred to in the ILR undertaking public policy considerations. guaranteed seeking to extort from the claimant and other migrant employees about their employment. Mr Allison submitted that in effect, Mr R Randev was undertaking migrant employees, and in particular Mr R Randev forcing them to sign an Taking (ii) and (iii) together, Mr Allison referred to differential treatment his reasons for leaving was that he was being exploited and underpaid. it was clear from all the evidence, including that of Mr R Randev that one of he may not have realised that he was being paid less than the minimum wage, Randev’s refusal to properly address this on 1 1 October 2015. Thus, although additional hours for the same low pay applicable to his basic hours and Mr that he was taking issue with the continual the evidence he gave of the reasons for his resignation. However, it was clear than the NMW from October 2013, he did not express the issue in this way in thereby exploited. It is fair to say that although the claimant was paid less for no additional pay. It is difficult to escape the conclusion that they were per week but required to work hours far in excess of their contractual requirement were not as free to change employment period of employment before agreeing to sign a letter confirming factual information for immigration sponsorship. This alleged conversation Page 27 He expressed that Mr Randev had paid £1 ,000 toward his the claimant had been made to sign in or a sum of money and that this raised was not in Mr Randev’s They were engaged for 40 hours sponsorship”. Mr Randev testified that he had as other staff because his concern about the £4,200 requirement It was put to the that he work witness either a of their hours of 25 20 15 10

[48]S/41 00575/201 6 monthly retainer to engage migrant staff and that about £1 ,000 of the £4,200 made up, Mr Randev went on to say that his firm were paying Five Star a relation to the claimant. Asked to explain how the balance of the £4,200 was from the lack of vouching that no other costs were incurred specifically or those of Five Star, failing which, an explanation If this were true then vouching ought to have been available from their records paid a further £1 ,200 to the agency (Five Star) when recruiting the claimant. been incurred by them. Mr Randev stated in cross examination that he had produced by the respondents for the remainder of the £4,200 alleged to have Apart from this single fee note from Five Star, no other vouching evidence placed before me was a fee to Five Star for work done by them. himself. ILR, I accepted the claimant’s oral evidence that he had paid these outlays had paid fees to the Home Office for either the Tier 2 Visa extension or the towards his ILR. Thus, in the absence of any evidence that the respondents showed that he had made a payment of £400 to Five Star on 1 5 October 201 5 agreed between Ms Barnett and Mr Allison that the claimant’s bank account inconsistent is charged by them on the whole sum so the claimant’s evidence was not Immigration does not appear as an outlay on the Five Star invoice and VAT Home Office for this extension himself. The fee payment to UK Visas and claimant’s 2 (General) Visa, including preparation and submission of application". (J121) for: “Re: Lekha Nath Fuyal: Work in connection with extension of Tier An invoice was produced from Five Star to Mr Randev dated 26 January 201 5 not put to him and I did not conclude that this conversation in particular, that if he ever left he would have to reimburse the money were having asked for help. However, the alleged details of the conversation payment had been made to Five Star International. also put to him that that he had asked Mr Randev for financial help and a was not told anything and did not know whether anything was paid. It was The only vouched expense position, which I accepted was that he had paid the fee to the with the documentary evidence produced. Furthermore, incurred by the respondents of why not. I concluded had happened. on the denied it was was The and in

[50]49. S/41 00575/201 6 breach of contract. It was a matter of agreement that the claimant was paid and did not instruct the Head Chef to tell him what was going on was a clear explanation in circumstances Finally, the non-payment trust and confidence on his part. of the extent to which the respondents’ treatment of him had led to a loss of unable to take his remaining annual leave and would lose it was symptomatic and confidence in itself. However, the claimant’s concern that he would be October 201 5 amounted or contributed to a breach of the implied term of trust refusal to allow the claimant With regard to paragraph 43(iv) on the facts found I did not consider that the reason for resignation. not been genuinely incurred for the purposes stated therein were part of the to repay unspecified “costs” of £4,200 to the respondents, most of which had Undertaking’ on 29 September 2015; and that this undertaking claimant of the implied term of trust and confidence; (b) that cumulatively circumstances, He explained into staying in the employment of the respondents for a period of 18 months. M I think this is a figure which has simply been manufactured respondents are saying they paid, or how they arrived at the figure of £4,200. statement the claimant testified: 7 am entirely unclear about what it is the Nothing that he had paid his own fees and had paid for his own application time he personally spent going to see ‘them’. The claimant’s evidence was losing them. Finally, he said he had included an element for the amount of on payslips because ‘they’ (presumably, from the context migrant staff) kept represented the amount of time his book keeping staff would have to spend produced had been coerced that he felt coerced into signing the undertaking. I have concluded (a) that the facts support (ii) and (iii) above; by the respondents with the other points above they represented of the claimant’s wages for two weeks with no where Mr Randev did not take or return his calls into signing the ‘Indefinite to take the two days’ leave he requested contradicted and (c) That the fact that the that. In his witness Leave to Remain to scare people required him a breach In all the for ILR. in

[51]S/41 00575/201 6 implied term, and indeed the above quoted paragraph in which the claimant’s were not a legitimate statement of sums incurred. In any event, the manner he required for his ILR. Furthermore, the “costs” contained in the ‘undertaking’ that unless he signed it Mr Randev would not give him the purely factual letter give his consent. He was pressured into signing it by Mr Randev on the basis claimant’s evidence and the facts found that he did not sign it voluntarily or Allison submitted that it had been procured by extortion. It is clear from the deductions itemised and regulations. suffered by it as a result of your negligence or breach of the Employer’s rules limitation any overpayments any sums which may be due by you to the Employer Employer reserves the right in its absolute discretion to deduct from your pay The statement of employment to withhold his wages was in clear breach of his contract. to resign but he thought that he might do so after getting his ILR. His decision understand from the conversation itself that the claimant had gone as far as conversation probabilities, Randev the claimant’s on to refer to an outstanding balance of £2,555. Clearly, in order to withhold states: “It is correct that we have withheld wages due to you. "The letter goes that he was not paid for weeks when he worked. In that letter, Mr Randev letter from Mr Randev to the claimant at J40 supports the claimant’s evidence had failed to pay the claimant wages due to him. In addition, the undated weeks for which he was not paid. It was not in dispute that the respondent have found on the facts before me that the claimant worked for a further two on or about 12 October 2015 and that that was the last week he was paid. I and an instruction on your payslip.” However, made. The undertaking with the claimant on 1 1 October. Clearly, Mr Randev did not this action appeared to me likely to have been triggered by his wages, a deliberate decision must have been taken by Mr Any such deductions will be notified to you beforehand and wages were withheld was clearly in breach of the or loans made to you by the Employer or losses given by him to payroll. On the balance particulars was not, in my view enforceable. there was no proper basis for the contained a provision that: “The of the statement of including without Mr of

[54]53. 52. S/41 00575/201 6 prove that the respondent was guilty of conduct that was so serious as to go breached the implied term of trust and confidence. The claimant requires to I considered whether the claimant had established that the respondents Ltd

1981 ICR 666

EAT:- Wilkinson J (as he then was) in Woods v WM Car Services (Peterborough) no reasonable destroy it or be calculated or likely to destroy it. Furthermore, there must be to the root of the trust and confidence between employer and employee prove that the respondent was guilty of conduct that was so serious as to go In order to establish a breach of the implied term the claimant requires

[1997] IRLR 462

HL as a term that:- confidence. was that the respondent was in breach of the implied term of mutual trust and Considering acting in this way. trust and confidence in a manner clearly likely to destroy or seriously damage the relationship beforehand and itemised on the payslip. The act done in this case was done employment it.” sensibly, is such that the employee cannot be expected to put up with and determine whether it is such that its effect, judged reasonably “The tribunal’s function is to look at the employer’s conduct as a whole and employee” damage the relationship itself in a manner calculated “ The employer shall not, without reasonable and proper cause conduct That term was described by the House of Lords in Malik v BCCI the acts complained particulars Page 31 and proper cause for the conduct. and there was no reasonable which provides of trust and confidence of taken as a whole, the claimant's and [or] likely to destroy or seriously that deductions In the words of Brown and proper cause for between employer will be notified case had and and to of 25 20 15 10

[56]What was the reason for dismissal? 55. S/41 00575/201 6 was put forward, nor was reasonableness the claimant’s dismissal in terms of section 98(1) ERA. Indeed, no reason respondent had satisfied the onus upon it to show a potentially fair reason for As is not unusual in a constructive for any other reason; and that he had done so without unreasonable had resigned on or about 25 October 2015 in response to the breach and not the failure to pay his wages as set out above. I concluded that the claimant cumulatively as found, the claimant resigned following a number of matters which taken it than that as set out above. Ultimately, it is a question of fact. On the facts wage, that is something he is entitled to complain about, but there is more to refusal to agree a pay rise. Given that he was paid less than the minimum Barnett submitted that the claimant’s resignation was due to the respondents’ With regard to whether the claimant resigned in response to the breach, Ms serious to justify resignation. for the conduct. Any breach of the implied term is repudiatory and sufficiently reclaim his unspecified expenses amounted to reasonable and proper cause the implied term in this case. I did not consider that Mr Randev’s was likely to do so. I have no doubt that the claimant has shown a breach of went to the root of the trust and confidence between them and destroyed it or same time, not taking his calls and failing to explain was so serious that it Randev’s conduct in deliberately payment breach of the respondent’s term. The non-payment course of conduct in this case clearly amounted to a breach of the implied destroy it or be calculated or likely to destroy it. It appeared to me that the to the root of the trust and confidence between employer and employee of his wages, but it was also a breach of the implied term. Mr amounted to a breach of the implied term. The last straw was of the claimant’s obligations under the contract to make timeous withholding the claimant’s pay and at the dismissal case, I did not find that the addressed under section 98(4). wages was not only an actual delay. wish to and

[59]Past loss to date of hearing 58. Compensatory 57. Basic Award Remedy for Unfair Dismissal S/41 00575/201 6 Hearing is calculated as follows:- was dismissed £368.50. Tips are not included in calculation of pay for NMW purposes. Corrected At the time of his dismissal the claimant was earning £346.1 5 gross per week. taken by the employer. n consequence circumstances “ shall be such amount as the tribunal considers just and equitable in all the Under s. 1 23(1 ) ERA 1 996, the amount of any compensatory sum is £1,106. However, it requires to be corrected for the minimum wage. The corrected service. The basic award was agreed between the parties at £1,038.00. 32 years. His gross weekly salary was £346.15. He had 3 completed The claimant is entitled to a basic award. At the time of dismissal he was aged Corrected net pay including tips: £337.15 per week. Corrected gross weekly pay £368.50 plus £40 tips = £408.50 Award for payment of the minimum wage this would be 55 x £6.70 = of the dismissal in so far as that loss is attributable to action Page 33 having regard to the loss sustained by the claimant in on 25 October 2015. His loss to the date of the Tribunal award years’ He

[62]Claim for holiday pay 61. Future loss 60. S/41 00575/201 6 nearest whole pound. therefore had 3.6 weeks remaining. £408.50 x 3.6 = £1,471 rounded to the weeks. 43/52 x 5.6 = 4.6. The claimant had taken one week’s leave and he This was 43 weeks into the holiday year. His annual entitlement was 5.6 to December. The claimant’s employment terminated With regard to holiday pay, the respondents’ date. than he earned with the respondents The claimant secured employment £17,532 -£13,780 = £3,752. £17,532. Deduct net earnings from Devoncote Hotel 52 x £265 = (£13,780). Loss from 25 October 2015 to 27 October 2016 = 52 weeks. 52 x £337.15 = Award: Compensatory Basic Award: Total Compensatory Add: loss of statutory rights Past net loss: The payment on 27 October 2016 at a higher salary so there is no ongoing loss from that is gross. The claimant award holiday year ran from January on 25 October 2015. is therefore £4,152.00

£3,752.00

£1,106.00

£400.00 15 10 65. 64. Claim for overtime pay 63. Claim for arrears of pay S/4100575/2016 comprises 40 hours. You are required to work such hours as are necessary “Hours of Work” the statement provides at paragraph 5: “Your working week £18,000.00. “Your wage shall be paid monthly calculated “Your total Remuneration relation to pay, paragraph see whether there is an express term regarding payment for overtime. Clearly, it is necessary is not. submitted that that would have to be expressly set out in the contract and it the claimant he was entitled to paid overtime under his contract. Mrs Rumsby testified that The claimant claims overtime payments and there is an issue about whether £408.50 x 3 = £1 ,226 rounded to the nearest whole pound. in this case. The claimant is accordingly owed three weeks’ arrears of pay: breach by the “Company”. the “costs” if he terminates undertaking had been valid, it provides that the claimant is not required to pay was not entitled to withhold the claimant’s September do so. He founds upon the undertaking weeks’ pay from the claimant. The first question is whether he was entitled to Mr R Randev conceded it. required to account to HMRC for any tax and National Insurance payable on 2015. For the reasons set out above I have concluded Your salary shall be reviewed annually was salaried Page 35 to examine statement of employment in cross examination There is accordingly no right to withhold payment shall be £18,000.00” 2 states under the heading “Remuneration”; and not entitled his employment he made the claimant sign on 29 pay. In any event, even if the in response to a fundamental to overtime at the gross yearly rate of that he had withheld The paragraph ” Under the heading pay. Mr Allison particulars goes on: that he three In to 15 10

[67]66. S/41 00575/201 6 NMW exceeded his salary and 12 October 2015 when he was last underpaid claimant and the National Minimum Wage from 1 October 201 3 when the I am, however required to award the difference between the sums paid to the schedule of loss. evidence for a reconsideration additional hours worked. If I am wrong about this Mr Allison will doubtless ask of the contract for its entire duration was that overtime was not paid for but there did not appear to be a basis for this on the facts. The performance express term entitling him to payment for overtime applied to other ‘salaried’ staff. I considered whether, in the absence of an that he was not paid in respect of overtime at any time and that this also accept his evidence that he normally worked 55 hours per week. It is clear the claimant’s position here and am concerned that he has been exploited. I notified otherwise by Mr Rahul Randev. I have a great deal of sympathy for worked, this would not affect her calculation pay. She went on that however many hours a member of salaried staff per the respondents’ rotas were irrelevant. She said that the claimant was a member of salaried to her by their managers for payroll purposes. However, for salaried staff the practice. Her testimony was that the hours of hourly paid staff were provided Mrs Rumsby payment for overtime. I have looked very carefully your manager immediately. possible of such requirement. hours as may be necessary and the management overtime working is frequently required. You must be prepared to work such week operation. Hours of working in restaurants vary from week to week and for the discharge of your duties. The iicensed trade industry is a seven-day before me for the overtime payments gave evidence but at present I can see no contractual basis on the system. He was not, therefore eligible for overtime Any errors will be rectified as soon as possible. ” at the statement Any errors in payment must be taken up with about how the contract of their pay unless she was but I can find no mention will give as much notice as set out in the claimant’s a term could be implied was performed staff in 30 25 Regulations Protection any claim for Jobseekers The claimant found alternative employment pound. arrears of pay is £702.90 + £1,226 = £1,929, rounded to the nearest whole other unlawful deductions referred to above the total sum I can award for October 201 5) = £45. 1 0. £57.20 + £600.60 + £45. 1 0 = £702.90. Added to the NMW was £6.70. The difference was £0.41. £0.41 x 55 x 2 weeks (to 12 difference 55 x 52 = £57.20. From 1 October 2014 the NMW was £6.50 per hour. The the claimant was paid £6.29. The underpayment by the respondent. From 1 October 2013 the NMW was £6.31 per hour and is £0.21. £0.21 x 55 x 52 = £600.60. From 1 October 2015 the (Recoupment 1996 accordingly do not apply to this award. of Jobseekers’ Allowance or other benefits. Allowance immediately is £0.02 per hour. £0.02 x & Income The Employment and did not make Support) CERTIFICATE OF CORRECTION Employment Tribunals Rules of Procedure 2013 In accordance with the power set out in Rule 69 of the Employment Tribunal Rules of Procedure 2013, 1 hereby correct the clerical error in the Judgment sent to the parties on 13 December 2017: Judgment Page 2 Line 2 Delete: "(One Thousand, Two Hundred and Twenty Nine Pounds)” Insert: “(One Thousand, Nine Hundred and Twenty Nine Pounds)” An amended version of the Judgment is attached. Important note to parties: Any dates for the filing of appeals or reconsideration are not changed by this certificate of correction or the amended Judgment or Case Management Order. These time limits still run from the date of the original Judgment or Case Management Order, or if reasons were provided later, from the date that those were sent to you. Employment Judge: Mary Kearns Date: 16 February 2018 Sent to parties: 21 February 2018 I EMPLOYMENT TRIBUNALS (SCOTLAND) Case No: S/41 00575/201 6 Held in Glasgow on 8, 9, 10 and 11 May and 30 and 31 October 2017 Employment Judge: Mrs M Kearns (sitting alone) Mr L Fuyal Claimant Represented by: Mr M Allison Solicitor Mr Rahul Randev and Mr Pravesh Randev Respondents t/a The Eagle Lodge Represented by: Ms J Barnett Consultant

REASONS

1 . The respondents are a partnership engaged in the operation of The Eagle Lodge and a number of other restaurants in and around Glasgow. The claimant, who is now 34 years of age, worked for the respondents as a chef. On 29 January 2016 the claimant presented an application to the Employment Tribunal in which he claimed unfair dismissal; holiday pay; arrears of pay and other payments. The respondents resisted all claims.

Issues

[2]The Tribunal identified the following issues:-(i) Whether the contract of employment was tainted by illegality in performance and consequently unenforceable;

(ii) Whether the claimant was dismissed;

(iii) If so, whether that dismissal was unfair;

(iv) If so, the remedy to which he is entitled; 30

(v) Whether the claimant is owed holiday pay;

(vi) Whether the claimant is owed arrears of pay;

(vii) Whether other payments are due to him. Evidence

[3]The parties lodged a Joint Bundle of Documents (“J”). The Tribunal heard evidence from the claimant and Mr Gokrana Raj Panthi, a former colleague at the Eagle Lodge. The respondent called the following witnesses: Mr Rahul Randev, Mr Pravesh Randev, Mrs Marion Rumsby, Mr Graeme Brown and Ms Pauline Monaghan. Findings in Fact

[4]The following facts were admitted or found to be proved:-

[5]The respondents are brothers who work in partnership running a number of restaurants in and around Glasgow. One of their restaurants is The Eagle Lodge, 2 Hilton Road, Bishopbriggs, G64 2PN. In total the partnership employs around 100 staff, 40 of whom work at the Eagle Lodge. The partnership employs a number of workers from abroad. Since 8 July 2009 Mr Rahul Randev has held an A rated Sponsor Licence from UK Visas and Immigration which permits the firm to employ migrant workers. Many of the chefs and kitchen staff at the restaurant come from abroad, often from the Indian sub-continent.

[6]The claimant was born in Nepal on 21 August 1 983. At the time of termination of his employment with the respondents he was 32 years of age and had completed three years’ service. He came to the UK in or around September 2010 on a sponsorship visa. He initially worked for another employer, but he moved to the respondents’ employment as a chef on 6 February 2012. The move took place through a recruitment agency called Five Star International, which specializes in placing migrant workers with employers. Mr Rahul Randev uses the agency to engage all the firm’s migrant employees. In addition to finding and recruiting the employees the agency has a legal department which assists them with visa applications and other immigration issues.

[7]Initially the claimant was not clear how his pay was being calculated and for the first six or seven months he received his weekly wages in cash (J77 & 78). He was receiving around £270 per week at this time. However, his pay fluctuated and when he queried this he was told that adjustments had been made for accommodation or travel. Between 2 February and 22 April 2012, although the claimant was paid in cash net, Mrs Rumsby, the firm’s accountant who handled payroll had not been notified and tax and National Insurance were not remitted to HMRC for this period. The claimant assumed tax and National Insurance had been deducted and remitted to HMRC as his gross salary would have been £346.15 and he was only receiving around £270. With effect from 23 April 2012 the claimant’s salary was put through the books and tax and National Insurance were paid on it by the firm’s accountant Mrs Rumsby when she received notification from his manager. The sums paid to the claimant fluctuated due to adjustments for accommodation and travel. He believed he was being paid lawfully. After around six months, Five Star International advised that he should be paid a simple gross figure without adjustments by BACS into his bank account and this was done. The claimant was not, at any stage paid for any overtime worked by him, nor were other migrant employees.

[8]The claimant has recently established from HMRC (J84) that their records show he received the following sums: ‘2012 - 13 from P&R Randev t/a The Eagle Lodge from 23 April 2012 to 21 October 2012 Pay £8,089.90 Tax £806.00; from Mr Rahul Randev, Mr Pravesh Randev from 22 October 2012 to 05 April 2013 Pay £6,820 Tax £645.80; 2013 - 4 from Mr Rahul Randev, Mr Pravesh Randev from 6 April 2013 to 5 April 2014 Pay £17,584.80 Tax £1,627; 2014 - 15 from Mr Rahul Randev, Mr Pravesh Randev from 6 April 2014 to 5 April 2015 Pay £17,999.80 Tax £1,598; 2015-16 Mr Rahul Randev, Mr Pravesh Randev from 6 April 2015 to 8 November 2015 Pay £9,346.05 Tax £767.20’.

[9]Some months after the claimant started work he was issued with a “ statement of terms and particulars of employment” (J96 to 101) which he signed. His signature was witnessed by Dan Doherty of Five Star International. The statement was dated 6 February 2012. In relation to pay, the statement stated at paragraph 14 Remuneration”, 2 under the heading “Your total Remuneration shall be £18,000.00” The paragraph went on: “Your wage shall be paid monthly calculated at the gross yearly rate of £18,000. 00. Your salary shall be reviewed annually "The claimant was in fact paid weekly, not monthly. The clause also stated: “The Employer reserves the right in its absolute discretion to deduct from your pay any sums which may be due by you to the Employer including without limitation any overpayments or loans made to you by the Employer or losses suffered by it as a result of your negligence or breach of the Employer's rules and regulations. Any such deductions will be notified to you beforehand and itemised on your payslip. "

[10]Under the heading “Hours of Work” the statement provided at paragraph 5: “Your working week comprises 40 hours. You are required to work such hours as are necessary for the discharge of your duties. The licensed trade industry is a seven-day week operation. Hours of working in restaurants vary from week to week and overtime working is frequently required. You must be prepared to work such hours as may be necessary and the management will give as much notice as possible of such requirement. Any errors in payment must be taken up with your manager immediately. Any errors will be rectified as soon as possible.” The contract also provided that the holiday year ran from January to December. Notice on both sides was one week for each year of service. 1 1 . Paragraph 1 4 of the contract is headed ‘Working Time Regulations’. It states: “You agree that the limit of an average working time of 48 hours, including overtime, for each 7 day period as set out in Regulation 4 of the Working Time Regulations (as amended) shall not apply to your employment. "The claimant normally worked 55 hours per week (J 1 03). However, he was not, at any point paid for overtime worked over 40 hours per week.

[12]The claimant repeatedly raised with Mr Rahul Randev an issue with his wages. Although Mrs Rumsby printed payslips every week, these were handed out by others and not always received by the claimant unless he made a specific request. Under his contract the claimant was earning £1 8,000 per annum for a 40 hour week but in reality he was working 55 hours per week. Because he and the other migrant employees were salaried and were not paid for overtime the claimant considered that they were not being paid property for the number of hours they were working. In or about 2014 the claimant and some of the other kitchen staff raised this with Mr Rahul Randev. Mr Randev’s proposed solution was that he would change the arrangements for tips so that the kitchen staff participated as well. The effect was that from around the end of 2014 the claimant received around £40 per week in tips. The procedure brought in by Mr Randev at that time was that each week, normally on a Saturday, he would make up envelopes for staff and put into them the tips he was allocating in cash. He normally allocated the claimant around £40. He would do the same for the other staff. Pauline Monaghan or Graeme Brown would then come through, pick up the envelopes and distribute them to the staff. It was Mr R Randev who decided how much the staff were given in tips and how the tips were divided. The claimant did not have any say in how much he was given. The claimant did not know that tax and National Insurance were not being paid on these tips and did not acquiesce in any such arrangement. He assumed that he was being paid in a lawful way and that the respondents were dealing with PAYE in the usual way. He now understands that where an employer dictates the amount an employee receives he (the employer) is responsible for ensuring that the relevant PAYE payments are made. (J56 para 2). 1 3. In or about late September 2015 the claimant mentioned to Mr Rahul Randev that he was making an application for indefinite leave to remain in the UK C'lLR”) and would require a letter from him confirming the details of his ongoing employment. Mr Randev indicated that the claimant would have to "sign a form" before he would give him the letter. Mr Randev then presented the claimant with a document (J45) entitled “The Eagle Lodge Indefinite Leave to Remain (ILR) Undertaking” and told him to sign it. He made it clear to the claimant that he would only get his letter for the ILR if he signed the undertaking and if he did not sign it his employment may not continue. The document was in the following terms:- “Upon being granted Indefinite Leave to Remain in the United Kingdom, you acknowledge that the Company will have made a significant financial investment in obtaining your immigration status. In consideration of this, you agree that if your employment terminates after the Company has incurred liability for the cost of your ILR status(and all other previous costs associated with your immigration including your visa/work permit/sponsorship) you will be liable to repay some or all of the fees, expenses and other costs (the Costs) associated with your immigration status up to and including the attainment of your ILR. You shall repay the company as follows:-(a) If you resign from your position with the Company, or if your (employment is terminated on the grounds of gross misconduct, within one month of you being granted ILR status you will be required to pay 100% of the Costs WHICH AT PRESENT STAND AT £4,200. The amount that you will be required to repay the Company will be reduced by 1/1 8 th for each complete month you have worked since you obtained your ILR status. You shall not be required to repay any of the costs if:~ (a) You left the Company more than 18 months after being granted ILR status;

(b) The Company terminates your employment, except where it was entitled to and did terminate your employment summarily; or

(c) You terminate your employment in response to a fundamental breach by the Company. You agree to the Company deducting the sums under this clause from your final salary or any outstanding payments due to you. "

[14]The claimant was told to sign the document to say that he had read, understood and agreed to its terms. Initially, he refused to sign it. He was very unhappy about it because he had paid his own initial visa fee and the fee for his ILR application. He had also paid UK Visas and Immigration for his visa extension himself. He therefore did not understand how the £4,200 referred to in the undertaking had been calculated and he was given no supporting evidence. However, Mr Rahul Randev told him that if he did not sign it then the respondents would not complete the letter he needed to secure his ILR. He implied that the claimant’s employment may not continue if he refused to sign. The claimant accordingly signed the document on 29 September 2015. He felt coerced into doing so and did not consent to it voluntarily. Although the document asserts that the respondents had paid costs ‘at present standing at’ £4,200 toward the claimant’s visa/work permit/ sponsorship, this was not correct. The claimant had paid his own UK Visas and Immigration S/41 00575/201 6 Paged fees. Mr Randev had paid an invoice to Five Star International dated 26 January 2015 (J121) for 7?e: Lekha Nath Fuyal: Work in connection with extension of Tier 2 (General) Visa, including preparation and submission of application." The invoice was for £1,000 plus VAT. However, there were no other costs paid by the respondents which were specific to the claimant. Once the claimant had signed the document on 29 September 2015 Mr Rahul Randev provided the letter he needed (J48) on 5 October 2015. He stated therein that the claimant had been employed by the respondents from 6/2/2012. 1 5. On or about 1 1 October 201 5 the claimant requested two days’ annual leave from the Head Chef, Mr Graeme Brown. He told him he really needed the two days for his family. The claimant was entitled to 5.6 weeks’ annual leave per year. So far, in the year to October 2015, the claimant had taken one week of his annual leave entitlement. The claimant understood from the other staff that it would not carry forward to the next year. Staff are not permitted to take holidays in December because it is too busy. November was also looking busy, so the claimant was concerned that he might lose his remaining leave. The Head Chef refused the claimant’s leave request saying that he had staff shortages. The claimant made clear that he was unhappy and the Head Chef called Mr Rahul Randev who said he would come and speak to the claimant. The claimant carried on with his work.

[16]When Mr Randev arrived, he and the claimant went to the banquet hall for a discussion, which took place in Hindi. The claimant told him he was upset about being refused two days’ leave. He also asked Mr Randev for a salary review. He said that he was working long hours and this was difficult for him but if he had to do the long hours he wanted to request that payment for them be included in his wages. He asked for an increment to cover his additional hours. The claimant was in fact normally working 55 hours per week but only being paid for 40 hours. He said he should be getting at least £400 per week after tax. The claimant said that if he was not paid for his additional hours and not allowed to take his holidays he would consider leaving. Mr Randev said to him: “How can you leave?" He reminded him that he had signed a contract before finalising his ILR application undertaking to stay and he could not just leave. The claimant felt trapped. Mr Randev then asked the claimant what would make him happy so he would want to stay. The claimant said the increment to cover his additional hours plus two days' leave. Mr Randev said he could not give this to him, but that what he could do, and had done for others was to put 1 6 hours on his payslip and pay the remainder cash in hand. The claimant did not agree to this suggestion from Mr Randev. He told Mr Randev that his payment must all be done properly through the bank. (The claimant was planning to purchase a property and needed evidence of his salary on his payslips). Mr Randev's suggestion was not adopted. After that, the claimant calmed himself down, went downstairs and started working. He was worried that Mr Randev might jeopardise his ILR (which had not yet been granted) by contacting Immigration and withdrawing his support for the application. The claimant continued to work for the respondents for a further two weeks.

[17]The claimant was paid the sum of £294.81 by the respondents in net salary by BACS on 12 October 2015. This was £346.15 gross being payment for 40 hours. His salary was always paid a week in arrears. This was the last payment he received from the respondents.

[18]The claimant's ILR was granted on 13 October 2015. He paid £400 to Five Star on 15 October 2015 for this. He received his ILR documents on 16 October 2015. The claimant was not paid his weekly wages by the respondents on 19 October 201 5. He raised this non-payment repeatedly with the Head Chef Graeme Brown, who said he would contact Mr Randev and sort it out. Each time the claimant chased this with the Head Chef he was told Mr Randev had not replied. Eventually the Head Chef said that Mr Randev was not contactable and that the claimant could not meet him. The claimant then tried to contact Mr Randev himself to request payment of his wages but he could not get any reply and did not receive payment. The claimant was also not paid his wages on 25 October. He attempted to telephone Mr Randev on that date to find out why he had now not been paid for two weeks with no explanation and Mr Randev was not returning his calls. Finally, late on or about 25 October 2015 Mr Rahul Randev came into the restaurant and the claimant said to him and to the Head Chef that he could not return. His last working day was 25 October 2015. He had not been paid for two weeks with no explanation and was running out of money. He had realised after the first week his wages were not paid that he would probably have to look for another job and he had begun looking for alternative work. Mr Randev asked him to put his resignation in writing. The claimant did so hoping he would then receive his salary. The reasons for his resignation were the continual requirement that he work additional hours for the same low pay and Mr Randev’s refusal to properly address this on 1 1 October 2015; the perceived likelihood that he would be unable to take his remaining annual leave and would lose it; the fact that he had been coerced into signing the ‘Indefinite Leave to Remain Undertaking' on 29 September 2015. The fact that this undertaking required him to ‘repay* unspecified “costs” of £4,200 to the respondents if he left, most of which had not been genuinely incurred for the purposes stated therein. Finally, the last straw was the non-payment of his wages for two weeks with no explanation in circumstances where Mr Randev did not take or return his calls and did not instruct the Head Chef to tell him what was going on. At the point his employment terminated, the claimant was owed two weeks’ wages plus his lie week, making a gross total of £1 ,226. He was also owed 3.6 weeks’ holiday pay amounting to £1 ,471 . The claimant did not work his notice.

[19]The claimant emailed Mr Rahul Randev later on 27 October 2015 with the subject heading “Resignation" (J 38) in the following terms:- “Dear sir..., I would like to mention a few experiences of working with yours management. I left job because you make fake contract before My ILR (which I still can explain on right place upon request) I was expecting to payed my wedges on time. You still have to payed my 4 week wedges & 3 week holiday. Head chef say that we was trying to call you & text you many time. I try call you Sunday on 25/10/15 but you never take proper response. How ever. To Rahul Randev Management of oregano Dear sir I would like to tender my resignation upon yours ask. Of the last week conversation with you on 18/9/15 till 2 week notice. However I wold like to thanks management of oregano that provide me with to working operchuneat. I wold like to thanks all the team members for all the help saport cooperation that they have given to me during my service. I wold like to mansion my 4 week weages and 3 week pending holidays to be payed on my account. . ..Any thing you want added reply me. If no then I have to get help from legal remedy. Yours sincerely Lekanath Fuyal”

[20]On the same date the claimant emailed Teresa Doherty of Five Star International. In his email he stated: 7 left job because he make fake contract which wasn't fear. I request him to pay my panding wedges after my ILR & I was expecting to have days off. . .He wasn 't positive to do that. . . when he stop pay me then I left job., .how ever he still need to pay my 4 week weages and 3 week holiday...” 21 . Mr Rahul Randev wrote an undated response to the claimant's email in the following terms:- “Dear Lekhanath RESIGNATION FROM EMPLOYMENT I write further to your recent communications and confirm that the Company accepts your resignation. I do not however accept your position that you signed a fake contract prior to receiving notification of your ILR. For the avoidance of doubt, all sponsored workers reaching their ILR status within the company are required to sign the undertaking to which you refer. Our legal advisers drafted this document as the Company experiences a high level of attrition with sponsored workers following attainment on their ILR status. As you have acknowledged within your communications, the Company, through your sponsorship has provided you with the opportunity to work within the UK. To do so, requires a significant amount of investment on our part, costs attributed to your employment alone exceed £4,000. [amended in hand-writing to £4,200.] It is correct we have withheld wages due to you. This is on accordance with your contract of employment and your signed undertaking. As there remains an outstanding balance of £2,555. We have passed the matter to a debt collecting company who will recover these costs on our behalf. Action taken by the debt company will include legal action through the small claims court, In addition, we will write to UK Immigration to inform them that you resigned from our employment within four days of receiving your ILR status.

[22]The figure of £2,555 was calculated by Mr R Randev on the basis that he was withholding three weeks’ wages and three weeks’ holiday pay net at £294 per week. At the time of his resignation the claimant was earning £18,000 per annum with the respondent plus a share of tips amounting to around £40 per week. He was working an average of 55 hours per week. (J103). His gross weekly pay was £346.15 plus £40. His net weekly pay was £294.81 . Within a few days of the termination of his employment with the respondents the claimant had secured employment at the Devoncote Hotel on Sauchiehall Street, working 30 hours per week at £10 per hour. His gross pay was £300. to His net weekly pay was £265. On 27 October 2016 the claimant began working 45 hours per week for the Village Hotel and Spa at Atlantic Quay. His salary is £22,000 per annum. Observations on the

Evidence

[23]Where the claimant’s evidence conflicted with that of the respondents’ witnesses, particularly Mr Rahul Randev I preferred the claimant's account. The claimant made appropriate concessions. His evidence about what happened with tips and migrant workers being made to work far in excess of 20 their contracted hours and receiving less favourable treatment was corroborated by Mr Panthi, whose evidence I also accepted. By contrast, Mr Rahul Randev’s evidence was unsatisfactory and inconsistent. He contradicted himself in relation to whether staff were required to work hours unpaid in excess of their contractual hours. In cross examination he stated all 25 of the following: that there was no requirement for his business to have staff working more than 40 hours; that the general practice was that people were put on the rota for 40 to 50 hours by the Head Chef; that they worked an average of 45 hours; and then again that he did not need staff to work more than 40 hours. He also contradicted himself regarding the claimant's employment start date. Having stated in a formal letter for UK Visas and Immigration on 5 October 2015 and in his ET3 that the claimant’s employment had begun on 2 February 201 2, he then changed this in evidence to 23 April 2012. Mr Allison suggested that the change was occasioned by Mr Randev’ s sight in the bundle of the claimant’s letter of 2 February 2017 from HMRC. The 23 April 2012 date coincides with the date from which tax and National Insurance were paid on the claimant’s salary per that letter. I concluded from the numerous contradictions in his evidence that he was not a frank and truthful witness.

[24]The most important conflict between the claimant’s evidence and that of Mr R Randev concerned the content of the conversation of 11 October 2015. The claimant accepted that he had asked that his salary be raised to £400 per week after tax. Ms Barnett put to the claimant in cross examination that Mr Randev would say that the claimant did ask for £400 after tax but that he asked Mr Randev to put through only 16 hours per week and wanted the remainder of his working hours paid cash in hand. The claimant vehemently denied this. He said that he had told Mr Randev that his payment must be done through the bank but that Mr Randev had said he would be paying it cash in hand and putting through 16 hours the same way he had done for others. He was clear that this suggestion had come from Mr Randev, that he had not agreed to it and that it was not adopted. Indeed, it was accepted by the respondents that from that point Mr Randev did not pay the claimant at all. Ms Barnett put to the claimant that the suggestion had come from him (the claimant) that only 16 hours went through the books and the remainder was paid cash in hand but that Mr Randev had refused to do it because it was "too much in terms of defrauding the Revenue". In his witness statement Mr Randev said “The £50 cash was the most I could put through for him cash in hand. Anything more than that was too much a risk and not a jeopardy I was prepared to make". This statement ppeared to suggest llidl Mr Randev was not averse to defrauding the Revenue but did not want to risk getting caught, which did not reflect well on his credibility. Indeed, he elaborated on this in cross examination and volunteered (in answer to a question about when he had introduced the ILR undertaking) that when migrant workers requested him to put through fewer hours and pay them the balance in cash he was sometimes able to help and put it through for them, but it depended on the level. This reflected poorly on Mr Randev’s credibility. The date of conversation was agreed by both parties to be 11 October 2015. I did not conclude that the claimant had resigned verbally at that meeting, for all the reasons set out below and not least because at that date his ILR had not yet been granted and received by him.

[25]There was confusion on the part of all the witnesses about the date of the claimant’s resignation and I have done my best on the evidence available, concluding that the claimant resigned late on 25 October 2015. The respondents’ position was that the claimant had verbally resigned on 11 October 2015, but they accepted that he had worked in the premises after that date. It was clear from a text the claimant had sent the Head Chef on Monday 1 2 October that he was still employed on that date as his message said that he would be 20 minutes late. On 1 3 October the Head Chef texted him to ask if he had lost his bus pass. A third text from the claimant to the Head Chef dated only “Yesterday 22:04” stated: “Thanks you so much for all the good time chef. Had really wander full good experience with you. I have been explane everything with you before I left that job about my payment. I was happy to work with you if he payed 4 week wedges and 3 week holiday I have email to Rahul but he never reply me. Anyway you will be proper wetness for I’m going to cases him shortly. " Although this text was clearly sent after the claimant’s resignation, nothing on the copy lodged assisted with the date. Doing my best to try and piece the evidence together I concluded that it was sent at 22:04 on the claimant’s last working day of 25 October 2015. The claimant's email of 27 October 2015 refers to four weeks’ unpaid wages being part of the reason for his resignation. It also refers to an attempted call on 25 October to Mr Randev. Mr R Randev’s undated letter at J40 states that wages had been withheld from the claimant. Thus, he must have worked for at least one week and on his own evidence probably two before he resigned. I did not accept that he resigned verbally on 1 1 October and then worked on as that made no sense in the circumstances. I also thought it unlikely he would have resigned before he received his ILR on 16 October because his resignation might have put the ILR in jeopardy.

[26]With regard to the other witnesses, Mr Pravesh Randev’s evidence was so evasive as to be of little assistance to the Tribunal. Mrs Marion Rumsby, the respondents’ accountant was a professional and honest witness who did her best to give frank evidence. She was clearly unaware of some of the respondents’ business practices. She was responsible for reporting to HMRC but did not deal with tips. Generally, Mrs Rumsby would take the information she was given from Mr R Randev and the managers at face value and simply process it accordingly. I did not find Mr Brown to be a satisfactory witness. His evidence appeared tailored to support Mr Rahul Randev’s claim that he was paying the claimant an additional cash in hand payment. He was unable to explain how he could possibly have known what was in an envelope given to the claimant (and, in particular, how he knew it was cash, but not the claimant’s tips) when he said he had no involvement in the alleged process, did not claim to have seen him open it and admitted never having discussed it with him. I did not find his evidence credible. I was similarly unimpressed with the evidence of Ms Monaghan. She admitted being motivated to get involved in the case and give evidence primarily by anger on hearing that the claimant had an interpreter. Having read the claimant’s written English in his texts and emails in the bundle, it is abundantly clear why he requires an interpreter for formal court proceedings. Ms Monaghan did not give her evidence in a careful and measured way and I found her claim that she could corroborate Mr R Randev’s account of his conversation with the claimant on 11 October 2015 because she had overheard the exact terms of it in mixed Hindi and English upstairs in the function suite through an open door while she was washing dishes to be frankly incredible. With regard to seeing the claimant open an envelope and take out cash, Ms Monaghan admitted that it could have been his tips and she did not really know what the claimant was getting. She also admitted that she could not say that the claimant had been told that tax and National Insurance had not been paid on his tips and he had to account for these himself. Applicable Law Constructive Unfair Dismissal

Applicable Law

[27]In a claim for constructive dismissal the onus rests on the claimant to establish that he has been dismissed. Section 95(1 )(c) of ERA provides that an employee is dismissed if “(c) the employee terminates the contract under which he is employed in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct. ”

[28]The circumstances in which an employee is entitled to terminate a contract without notice by reason of the employer’s conduct are judged according to the common law. The claimant must establish a repudiatory breach of contract by the respondent. In essence, the claimant requires to prove:(i) that there was a breach of a contractual term by the respondent;

(ii) that the breach was sufficiently serious to justify his resignation;

(iii) that he resigned in response to the breach and not for any other reason; and

(iv) that he did not delay too long in resigning.

[29]In these proceedings the claimant's case was that the respondent was in breach of the implied term of mutual trust and confidence. That term was described by the House of Lords in Malik v BCCI [1 9971 IRLR 462 HL as a term that:- “ The employer shall not, without reasonable and proper cause conduct itself in a manner calculated and [or] likely to destroy or seriously damage the relationship of trust and confidence between employer and employee”

[30]In order to establish a breach of the implied term the claimant requires to prove that the respondent was guilty of conduct that was so serious as to go destroy it or be calculated or likely to destroy it. Furthermore, there must be no reasonable and proper cause for the conduct. In the words of Brown Wilkinson J (as he then was) in Woods v WM Car Services (Peterborough) Ltd

1981 ICR 666

EAT:- "The tribunal’s function is to look at the employer’s conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it” 31 . If the Tribunal is satisfied that there has been a dismissal in this case, Section 98 of ERA sets out how it should approach the question of whether the dismissal is fair. There are two stages. The first stage is for the employer to show the reason for the dismissal and that it is a potentially fair reason (Section 98(1)).

[32]If the employer is successful in establishing the reason, the Tribunal must then move on to the second stage and apply Section 98(4) which provides:- "... Where the employer has fulfilled the requirements of sub-section (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reasons 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. ” Discussion and Decision Illegality

[33]The respondents' first submission in this case was that the contract of employment between the claimant and the respondents was tainted by illegality in performance and consequently unenforceable. Illegality in performance occurs where a lawfully made contract is performed in an illegal way, for example through some tax evasion in the way the employee is paid. As Mr Allison submitted, the Court of Appeal made clear in Colen and another v Cebrian (UK) Ltd

2004 ICR 568

CA that the burden of proof is on the employer to show that it had either contracted with the employee with the object of defrauding HMRC, or had performed the contract in a way that had this result. As Ms Barnett submitted, in order to establish illegality in performance, such as to prevent enforcement of the contract, two basic conditions must be met: Firstly, the employee must know of the illegality, and secondly there must be participation. With regard to knowledge, it must be shown that the employee knew about the facts that made the performance illegal. With regard to participation, Mr Allison and Ms Barnett both referred me to Hall v Woolston Hall Leisure Ltd

2000 IRLR 578

CA in which the Court of Appeal held that an employee will only be prevented from enforcing a contract that has been performed illegally if, in addition to knowing about the facts that make the performance illegal he actively participated in the illegal performance. It is a question of fact in each case whether there has been a sufficient degree of participation by the employee. Ms Barnett drew attention to the case of Newland v Simons and Wilier (Hairdressers) Ltd

1981 IRLR 359

in which the EAT held that where both the employer and employee knowingly commit a fraud on the Inland Revenue in the payment and receipt of the employee’s remuneration, the contract becomes one prohibited by io statute or common law, precluding the enforcement of employment rights. The essential question was said to be 'Has the employee knowingly been a party to a deception on the Revenue?'

[34]In the present case the respondent relies upon:-(a) The failure to pay tax and National Insurance on tips; and/or

(b) The allegation that the claimant was paid a cash in hand supplement to his wages; and/or

[35]I have considered(a) the failure to pay tax and National Insurance on tips; and

(b) the allegation that the claimant was paid a cash in hand supplement of £40 (ET3) or £50 (R Randev witness statement) per week on top of his tips together because I concluded that Mr Rahul Randev’s description of how he would put £40 each into an envelope each week for the claimant and others was, in fact a reference to his allocation of the tips and that there was no additional cash in hand supplement as he alleged.

[36]Mr R Randev claimed that the business had a 'troncmaster' in relation to tips and that this was the “General Manager”. Conveniently, this was said to be a Kevin Holmes, who, Mr R Randev claimed, had now left and would not be a witness, or possibly, Mark Taylor who would not be a witness either. (Significantly, Mr Brown stated that both Kevin Holmes and Mark Taylor still worked at the Eagle Lodge. Neither was called to give evidence.) Mr Randev claimed he (Mr Rahul Randev) had nothing to do with the tips. I felt he ‘protested too much' about this and I preferred the claimant’s evidence that Mr R Randev himself decided how much staff would get in tips and was effectively the troncmaster. The claimant’s evidence, which I accepted was that the only cash he received weekly from the respondents was payment of his share of the tips and that it was generally between £35 and £40. As mentioned above, Mr R Randev testified in some detail about how he personally used to put cash in an envelope for the claimant every week along with his pay slip. (The amount per the ET3 was claimed to be £40, the same amount the claimant accepted receiving in tips. Mr Randev’s evidence in his witness statement, maintained in cross examination was that it was £50. However, it was then put to him in a leading question in re-examination that it was £40, not £50 and he agreed!) Significantly the firm’s accountant, Mrs Rumsby, (who is responsible for the firm’s payroll, its declarations to HMRC and its end of year accounts) said she had no awareness of some staff receiving cash supplements over and above their wages paid by BACS and that as far as she knew, tips aside, this did not happen. I accepted Mrs Rumsby’s testimony on this point and did not believe Mr Randev’s evidence that he had given the claimant a cash in hand payment on top of his tips, nor did I believe his evidence about having nothing to do with tips. His testimony was that on the one hand he was so scrupulous about remaining completely ignorant of the division of tips that he would leave the room if they were discussed at a staff meeting so that if the taxman were to ask him, he could say “its not my responsibility 1'; but on the other hand, that he knew for certain that all staff including the claimant had been told that they had to account to HMRC themselves for tips and also that he knew how much the claimant was getting in tips. His evidence on this issue was contradictory and simply not credible. At the end of it he stated that it was the duty of his four managers at The Eagle Lodge to make sure the tips were put on employees' payslips, but that he had said to them ‘Whatever way you do it is down to you”. He summed up his position as “All I know is, if a troncmaster is in place and HMRC come knocking, it’s their responsibility, not mine. ”

[37]It was claimed in evidence by Mr Brown and Ms Monaghan that when the kitchen staff started receiving tips they were told they were tax deductible. Mr Panthi’s response when it was put to him in cross examination that they would say this was that they were “completely lying”. “Nobody ever told me that. " The claimant also denied this. I preferred the evidence of the claimant and Mr Panthi for all the reasons set out in the observations on the evidence above. Put shortly, on the facts of this case, it was Mr R Randev who decided how much the staff were given in tips and how they were divided. The claimant did not have any say in how much he was given. The claimant did not know that tax and National Insurance were not being paid on these tips and did not acquiesce in any such arrangement. He assumed that he was being paid in a lawful way and that the respondents were dealing with PAYE normally. The claimant may have relied on assumptions and may not have asked questions. However, I am satisfied that he did not knowingly participate in this deception of HMRC. Mr Randev testified there was a tronc and that seems to have been correct. It was the responsibility of the troncmaster to make sure the tax was paid on the tips and the claimant was entitled to assume this had been done. That seems to be the effect of the Government Guidance at (J56). The guidance would appear, in the absence of anything put before me to the contrary, to negate Ms Barnett's submission that the claimant should somehow have known from his payslips that tax had not been paid on his tips. I do not find that the contract was unenforceable in these circumstances as I am not satisfied that the claimant had the necessary knowledge of the fact that the troncmaster was not meeting his responsibility to pay tax. I am also not satisfied that the claimant knowingly participated in the deception of HMRC.

[38]Looking at (c) other areas of possible illegality:

[39]Between 2 February and 22 April 2012, the claimant was paid his net pay in cash. Mrs Rumsby was not notified and tax and National Insurance were not remitted to HMRC for this period. However, the claimant assumed tax and National Insurance had been deducted and remitted to HMRC as his gross salary would have been £346.15 and he was only receiving around £270. He therefore believed he was being paid lawfully. I have concluded from these facts that although tax and National Insurance were not paid by the respondents between 6 February and 22 April 2012, the claimant did not know of or participate in the illegal performance.

[40]A further ground of possible illegality put forward by Ms Barnett was an alienation that the claimant made a request to Mr R Randev on 16 October for a wage rise as a cash in hand payment, along with a request that Mr Randev should falsify his hours to reflect a 16 hour week. The claimant accepted that a discussion took place with Mr Randev but stated that the suggestion of the falsification of hours came from Mr Randev and was refused by him. Given the unsatisfactory nature of the respondents’ evidence and Mr R R idev’s admitted willingness to remunerate staff in ways that may defraud MRC, I preferred the claimant’s account of this discussion. It was, in any event accepted that the last payment made by the respondents to the claimant was on 12 October 2015, so even on the respondents' case there is no suggestion that the contract was actually performed in this way. 41 . In summary the respondents’ argument that the contract of employment was tainted by illegality in performance and is consequently unenforceable is rejected. Unfair Dismissal claim Was the claimant dismissed?

[42]Section 95(1 )(c) ERA provides that an employee is dismissed if “the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct" The burden of proof is on the employee to show that he has been dismissed. The standard of proof is the 'balance of probabilities’. The claimant requires to establish:(i) that there was a breach of a contractual term by the respondent;

(ii) that the breach was sufficiently serious to justify his resignation;

(iii) that he resigned in response to the breach and not for any other reason; and

(iv) that he did not delay too long in resigning.

[43]Mr Allison submitted that this claim is a ‘last straw’ case. He referred to a number of what he described as 'egregious breaches’ by the respondents as set out at paragraph 1 1 of the ET 1 . These are:-(i) The respondent failed to pay the claimant the minimum wage;

(ii) he preparation of a contract based upon ‘false claims’;

(iii) the respondents extorting the claimant’s signature and continued employment in exchange for cooperating with his ILR;

(iv) the refusal to allow the claimant to take leave;

(v) the respondents’ failure to pay the claimant's wages when they fell due, and to pay them thereafter.

[44]I accepted the claimant's evidence that the reasons for his resignation were as follows: the continual requirement that he work additional hours for the same low pay and Mr Randev’s refusal to properly address this on 1 1 October 2015; the perceived likelihood that he would be unable to take his remaining annual leave and would lose it; the fact that he had been coerced into signing the ‘Indefinite Leave to Remain Undertaking' on 29 September 2015; and that this undertaking required him to repay unspecified "costs” of £4,200 to the respondents, most of which had not been genuinely incurred for the purposes stated therein; and the last straw non-payment of his wages for two weeks with no explanation in circumstances where Mr Randev did not take or return his calls and did not instruct the Head Chef to tell him what was going on.

[45]I have considered each of Mr Allison's arguments in turn, and then addressed their cumulative effect. With regard to (i) the minimum wage during the claimant’s period of employment went up each October and was as follows:- From October 201 1 : £6.08 per hour; From October 201 2: £6.1 9 From October 201 3: £6.31 From October 2014: £6.50 From October 2015: £6.70

[46]From 2009 employers have not been permitted to count tips toward the national minimum wage. In the absence of any contrary documentary evidence lodged by the respondent, and in view of the unsatisfactory nature of their evidence, I have concluded on the basis of the claimant’s oral evidence, that of Mr Panthi and the copy rota lodged by the claimant at J 103 that the claimant worked 55 hours per week. His gross weekly pay was £346.1 5. His pay was accordingly £6.29 per hour for the whole period of his employment. Thus, from October 2013, the claimant was paid less than the minimum wage prescribed by law. This was a breach of his contract. The claimant and the other migrant employees employed by the respondents were not as free to change employment as other staff because of their requirement for immigration sponsorship. They were engaged for 40 hours per week but required to work hours far in excess of their contractual hours for no additional pay. It is difficult to escape the conclusion that they were thereby exploited. It is fair to say that although the claimant was paid less than the NMW from October 2013, he did not express the issue in this way in the evidence he gave of the reasons for his resignation. However, it was dear that he was taking issue with the continual requirement that he work additional hours for the same low pay applicable to his basic hours and Mr Randev’s refusal to properly address this on 1 1 October 201 5. Thus, although he may not have realised that he was being paid less than the minimum wage, it was clear from all the evidence, including that of Mr R Randev that one of his reasons for leaving was that he was being exploited and underpaid.

[47]Taking (ii) and (iii) together, Mr Allison referred to differential treatment of migrant employees, and in particular Mr R Randev forcing them to sign an undertaking before agreeing to sign a letter confirming factual information about their employment. Mr Allison submitted that in effect, Mr R Randev was seeking to extort from the claimant and other migrant employees either a guaranteed period of employment or a sum of money and that this raised public policy considerations. He expressed his concern about the £4,200 referred to in the ILR undertaking the claimant had been made to sign in September 2015. Mr Randev’s evidence was that the claimant had spoken to him in November 2014 and asked if he could contribute to the cost of his visa extension because it was very expensive. Mr Randev testified that he had agreed and had said that he would contribute £1,000 “and the only thing would be that if he was ever left working for me I would expect him to reimburse that £1,000”. This alleged conversation was not in Mr Randev’s witness statement, which contains no specification at all in relation to the “costs" said to have been “invested in the claimant’s sponsorship". It was put to the claimant in cross examination that Mr Randev had paid £1 ,000 toward his visa extension. His answer (contrary to Ms Barnett’s submission) was that he was not told anything and did not know whether anything was paid. It was also put to him that that he had asked Mr Randev for financial help and a payment had been made to Five Star International. The claimant denied having asked for help. However, the alleged details of the conversation and in particular, that if he ever left he would have to reimburse the money were not put to him and I did not conclude that this conversation had happened. An invoice was produced from Five Star to Mr Randev dated 26 January 201 5 (J121) for: “Re: Lekha Nath Fuyal: Work in connection with extension of Tier 2 (General) Visa, including preparation and submission of application”. The claimant’s position, which I accepted was that he had paid the fee to the Home Office for this extension himself. The fee payment to UK Visas and Immigration does not appear as an outlay on the Five Star invoice and VAT is charged by them on the whole sum so the claimant’s evidence was not inconsistent with the documentary evidence produced. Furthermore, it was agreed between Ms Barnett and Mr Allison that the claimant’s bank account showed that he had made a payment of £400 to Five Star on 1 5 October 2015 towards his ILR. Thus, in the absence of any evidence that the respondents had paid fees to the Home Office for either the Tier 2 Visa extension or the ILR, I accepted the claimant’s oral evidence that he had paid these outlays himself. The only vouched expense incurred by the respondents on the evidence placed before me was a fee to Five Star for work done by them.

[48]Apart from this single fee note from Five Star, no other vouching was produced by the respondents for the remainder of the £4,200 alleged to have been incurred by them. Mr Randev stated in cross examination that he had paid a further £1,200 to the agency (Five Star) when recruiting the claimant. If this were true then vouching ought to have been available from their records or those of Five Star, failing which, an explanation of why not. I concluded from the lack of vouching that no other costs were incurred specifically in relation to the claimant. Asked to explain how the balance of the £4,200 was made up, Mr Randev went on to say that his firm were paying Five Star a monthly retainer to engage migrant staff and that about £1 ,000 of the £4,200 represented the amount of time his book keeping staff would have to spend on payslips because 'they' (presumably, from the context migrant staff) kept losing them. Finally, he said he had included an element for the amount of time he personally spent going to see 'them'. The claimant’s evidence was that he had paid his own fees and had paid for his own application for ILR. Nothing produced by the respondents contradicted that In his witness statement the claimant testified: 7 am entirely unclear about what it is the respondents are saying they paid, or how they arrived at the figure of £4,200. I think this is a figure which has simply been manufactured to scare people into staying in the employment of the respondents for a period of 18 months. " He explained that he felt coerced into signing the undertaking. In all the circumstances, I have concluded(a) that the facts support (ii) and (iii) above;

(b) that cumulatively with the other points above they represented a breach of the implied term of trust and confidence; and

(c) That the fact that the claimant had been coerced into signing the ‘Indefinite Leave to Remain Undertaking’ on 29 September 2015; and that this undertaking required him to repay unspecified "costs” of £4,200 to the respondents, most of which had not been genuinely incurred for the purposes stated therein were part of the reason for resignation.

[49]With regard to paragraph 43(iv) on the facts found I did not consider that the refusal to allow the claimant to take the two days’ leave he requested in October 201 5 amounted or contributed to a breach of the implied term of trust and confidence in itself. However, the claimant’s concern that he would be unable to take his remaining annual leave and would lose it was symptomatic of the extent to which the respondents’ treatment of him had led to a loss of trust and confidence on his part.

[50]Finally, the non-payment of the claimant’s wages for two weeks with no explanation in circumstances where Mr Randev did not take or return his calls and did not instruct the Head Chef to tell him what was going on was a clear breach of contract. It was a matter of agreement that the claimant was paid on or about 12 October 2015 and that that was the last week he was paid. I have found on the facts before me that the claimant worked for a further two weeks for which he was not paid. It was not in dispute that the respondent had failed to pay the claimant wages due to him. In addition, the undated letter from Mr Randev to the claimant at J40 supports the claimant’s evidence that he was not paid for weeks when he worked. In that letter, Mr Randev states: “It is correct that we have withheld wages due to you. "The letter goes on to refer to an outstanding balance of £2,555. Clearly, in order to withhold the claimant’s wages, a deliberate decision must have been taken by Mr Randev and an instruction given by him to payroll. On the balance of probabilities, this action appeared to me likely to have been triggered by his conversation with the claimant on 11 October. Clearly, Mr Randev did not understand from the conversation itself that the claimant had gone as far as to resign but he thought that he might do so after getting his ILR. His decision to withhold his wages was in clear breach of his contract.

[51]The statement of employment particulars contained a provision that: “The Employer reserves the right in its absolute discretion to deduct from your pay any sums which may be due by you to the Employer including without limitation any overpayments or loans made to you by the Employer or losses suffered by it as a result of your negligence or breach of the Employer’s rules and regulations. Any such deductions will be notified to you beforehand and itemised on your payslip.” However, there was no proper basis for the deductions made. The undertaking was not, in my view enforceable. Mr Allison submitted that it had been procured by extortion. It is clear from the claimant’s evidence and the facts found that he did not sign it voluntarily or give his consent. He was pressured into signing it by Mr Randev on the basis that unless he signed it Mr Randev would not give him the purely factual letter he required for his ILR. Furthermore, the “costs" contained in the 'undertaking’ were not a legitimate statement of sums incurred. In any event, the manner in which the claimant’s wages were withheld was clearly in breach of the implied term, and indeed the above quoted paragraph of the statement of employment particulars which provides that deductions will be notified beforehand and itemised on the payslip. The act done in this case was done in a manner clearly likely to destroy or seriously damage the relationship of trust and confidence and there was no reasonable and proper cause for acting in this way.

[52]Considering the acts complained of taken as a whole, the claimant's case was that the respondent was in breach of the implied term of mutual trust and confidence. That term was described by the House of Lords in Malik v BCCI

[1997] IRLR 462

HL as a term that:- “The employer shall not, without reasonable and proper cause conduct itself in a manner calculated and [or] likely to destroy or seriously damage the relationship of trust and confidence between employer and employee”

[53]In order to establish a breach of the implied term the claimant requires to prove that the respondent was guilty of conduct that was so serious as to go destroy it or be calculated or likely to destroy it. Furthermore, there must be no reasonable and proper cause for the conduct. In the words of Brown Wilkinson J (as he then was) in Woods v WM Car Services (Peterborough) Ltd

1981 ICR 666

EAT:- uThe tribunal’s function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot expected to put up with it”

[54]I considered whether the claimant had established that the respondents had breached the implied term of trust and confidence. The claimant requires to prove that the respondent was guilty of conduct that was so serious as to go destroy it or be calculated or likely to destroy it. It appeared to me that the course of conduct in this case clearly amounted to a breach of the implied term. The non-payment of the claimant’s wages was not only an actual breach of the respondent’s obligations under the contract to make timeous payment of his wages, but it was also a breach of the implied term. Mr Randev’s conduct in deliberately withholding the claimant’s pay and at the same time, not taking his calls and failing to explain was so serious that it went to the root of the trust and confidence between them and destroyed it or was likely to do so. I have no doubt that the claimant has shown a breach of the implied term in this case. I did not consider that Mr Randev’s wish to reclaim his unspecified expenses amounted to reasonable and proper cause for the conduct. Any breach of the implied term is repudiatory and sufficiently serious to justify resignation.

[55]With regard to whether the claimant resigned in response to the breach, Ms Barnett submitted that the claimant’s resignation was due to the respondents* refusal to agree a pay rise. Given that he was paid less than the minimum wage, that is something he is entitled to complain about, but there is more to it than that as set out above. Ultimately, it is a question of fact. On the facts as found, the claimant resigned following a number of matters which taken cumulatively amounted to a breach of the implied term. The last straw was the failure to pay his wages as set out above. I concluded that the claimant had resigned on or about 25 October 201 5 in response to the breach and not for any other reason; and that he had done so without unreasonable delay. What was the reason for dismissal?

[56]As is not unusual in a constructive dismissal case, I did not find that the respondent had satisfied the onus upon it to show a potentially fair reason for the claimant’s dismissal in terms of section 98(1) ERA. Indeed, no reason was put forward, nor was reasonableness addressed under section 98(4). Remedy for Unfair Dismissal Basic Award

[57]The claimant is entitled to a basic award. At the time of dismissal he was aged 32 years. His gross weekly salary was £346.15. He had 3 completed years' service. The basic award was agreed between the parties at £1,038.00. However, it requires to be corrected for the minimum wage. The corrected sum is £1,106. Compensatory Award

[58]Under s. 123(1 ) ERA 1996, the amount of any 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 claimant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. n Past loss to date of hearing

[59]At the time of his dismissal the claimant was earning £346. 1 5 gross per week. Corrected for payment of the minimum wage this would be 55 x £6.70 = £368.50. Tips are not included in calculation of pay for NMW purposes. He was dismissed on 25 October 2015. His loss to the date of the Tribunal Hearing is calculated as follows:- Corrected gross weekly pay £368.50 plus £40 tips = £408.50 Corrected net pay including tips: £337.15 per week.

[60]Loss from 25 October 201 5 to 27 October 2016 = 52 weeks. 52 x £337.15 = £17,532. Deduct net earnings from Devoncote Hotel 52 x £265 = (£13,780). £17,532 -£13,780 = £3,752. Future loss

[61]The claimant secured employment on 27 October 2016 at a higher salary than he earned with the respondents so there is no ongoing loss from that date. Basic Award: £1,106.00 Compensatory Past net loss: £3,752.00 Award: Add: loss of statutory rights £400.00 £4,152.00 i Total Compensatory award Claim for holiday pay

[62]With regard to holiday pay, the respondents’ holiday year ran from January to December. The claimant’s employment terminated on 25 October 2015. This was 43 weeks into the holiday year. His annual entitlement was 5.6 weeks. 43/52 x 5.6 = 4.6. The claimant had taken one week’s leave and he therefore had 3.6 weeks remaining. £408.50 x 3.6 = £1,471 rounded to the nearest whole pound. The payment is gross. The claimant is therefore required to account to HMRC for any tax and National Insurance payable on it Claim for arrears of pay

[63]Mr R Randev conceded in cross examination that he had withheld three weeks’ pay from the claimant. The first question is whether he was entitled to do so. He founds upon the undertaking he made the claimant sign on 29 September 2015. For the reasons set out above I have concluded that he was not entitled to withhold the claimant's pay. In any event, even if the undertaking had been valid, it provides that the claimant is not required to pay the “costs" if he terminates his employment in response to a fundamental breach by the "Company”. There is accordingly no right to withhold payment in this case. The claimant is accordingly owed three weeks’ arrears of pay: £408.50 x 3 - £1,226 rounded to the nearest whole pound. Claim for overtime pay

[64]The claimant claims overtime payments and there is an issue about whether he was entitled to paid overtime under his contract. Mrs Rumsby testified that the claimant was salaried and not entitled to overtime pay. Mr Allison submitted that that would have to be expressly set out in the contract and it is not.

[65]Clearly, it is necessary to examine statement of employment particulars to see whether there is an express term regarding payment for overtime. In relation to pay. paragraph 2 states under the heading “Renumeration”, "Your total Remuneration shall be £18,000.00” The paragraph goes on: "Your wage shall be paid monthly calculated at the gross yearly rate of £18,000.00. Your salary shall be reviewed annually " Under the heading "Hours of Work" (he statement provides at paragraph 5: "Your working week comprises 40 hours. You are required to work such hours as are necessary for the discharge of your duties. The licensed trade industry is a seven-day week operation. Hours of working in restaurants vary from week to week and overtime working is frequently required. You must be prepared to work such hours as may be necessary and the management will give as much notice as possible of such requirement. Any errors in payment must be taken up with your manager immediately. Any errors will be rectified as soon as possible. " I have looked very carefully at the statement but I can find no mention payment for overtime.

[66]Mrs Rumsby gave evidence about how the contract was performed in practice. Her testimony was that the hours of hourly paid staff were provided to her by their managers for payroll purposes. However, for salaried staff the rotas were irrelevant. She said that the claimant was a member of salaried staff per the respondents' system. He was not, therefore eligible for overtime pay. She went on that however many hours a member of salaried staff worked, this would not affect her calculation of their pay unless she was notified otherwise by Mr Rahul Randev. I have a great deal of sympathy for the claimant’s position here and am concerned that he has been exploited. I accept his evidence that he normally worked 55 hours per week. It is clear that he was not paid in respect of overtime at any time and that this also applied to other ’salaried’ staff. I considered whether, in the absence of an express term entitling him to payment for overtime a term could be implied but there did not appear to be a basis for this on the facts. The performance of the contract for its entire duration was that overtime was not paid for additional hours worked. If I am wrong about this Mr Allison will doubtless ask for a reconsideration but at present I can see no contractual basis on the evidence before me for the overtime payments set out in the claimant’s schedule of loss. 67. lam, however required to award the difference between the sums paid to the claimant and the National Minimum Wage from 1 October 2013 when the NMW exceeded his salary and 12 October 201 5 when he was last underpaid by the respondent. From 1 October 2013 the NMW was £6.31 per hour and the claimant was paid £6.29. The underpayment is £0.02 per hour. £0.02 x 55 x 52 = £57.20. From 1 October 2014 the NMW was £6.50 per hour. The difference is £0.21. £0.21 x 55 x 52 = £600.60. From 1 October 2015 the NMW was £6.70. The difference was £0.41. £0.41 x 55 x 2 weeks (to 12 October 2015) = £45.10. £57.20 + £600.60 + £45.10 - £702.90. Added to the other unlawful deductions referred to above the total sum I can award for arrears of pay is £702.90 + £1 ,226 = £1 ,929, rounded to the nearest whole pound.

[68]The claimant found alternative employment immediately and did not make any claim for Jobseekers Allowance or other benefits. The Employment Protection (Recoupment of Jobseekers’ Allowance & Income Support) Regulations 1996 accordingly do not apply to this award. 20