Mr T Jeffrey v Avocet Agritech Ltd: 4102690/2020
JUDGMENT
[1]The respondent has breached the claimant’s contract of employment and is ordered to pay to the claimant ONE THOUSAND SIX HUNDRED AND FOUR POUNDS STERLING AND SIXTY NINE PENCE (£1,604.69) in respect of net damages for such breach in failing to give the statutory minimum notice period of three weeks of the termination of the claimant’s employment as incorporated into his employment contract by section 86 (4) of the Employment Rights Act 1996.[2]The respondent has made an unauthorised deduction from wages contrary to section 13 of the Employment Rights Act 1996 and is ordered to pay to the claimant the sum of ONE THOUSAND NINE HUNDRED AND SEVENTEEN POUNDS STERLING AND EIGHTY ONE PENCE (£1,917.81) in respect of unpaid wages relating to ten days’ accrued untaken holiday outstanding as at the termination of employment on 17 April[3]The respondent has made an unauthorised deduction from wages contrary to section 13 of the Employment Rights Act 1996 and is ordered to pay to the claimant the sum of SEVEN THOUSAND ONE HUNDRED AND NINETY FIVE POUNDS AND EIGHTY THREE PENCE (£7,195.83) in respect of unpaid wages relating to the period from 1 March to 17 April[4]The sums awarded at item 2 and 3 are expressed gross of tax and national insurance. It is for the respondent to make any deductions lawfully required to account to HMRC for any tax and national insurance due on the sums, if applicable.[5]The claimant’s complaint of breach of contract in respect of a failure to pay expenses in the sum of £1,511.31 is not well founded and is dismissed.[6]The claimant has been unfairly dismissed. Save in respect of the following matters on which the Tribunal makes a determination, the question of remedy is held over. The Tribunal makes the following determinations relevant to remedy: i. The claimant has no entitlement to a basic award in this case by operation of s122(4) of ERA. ii. The dismissal was neither caused nor contributed to by any action of the claimant for the purposes of s.123 (6) of the Employment Rights Act 1996; and iii. It has not been proved that a fair dismissal would have ensued or that the claimant’s employment would have ended lawfully within any particular timescale, such that no Polkey reduction falls to be applied to any award.REASONS
Introduction
[1]The claimant brought a claim for damages for failure to serve the statutory minimum notice period, a claim for an unauthorised deduction from wages in respect of accrued untaken holidays outstanding at the termination of his employment, a claim for arrears of pay outstanding on the termination of his employment, and a claim for breach of contract in respect of unpaid expenses. Similar claims were brought against the respondent and another group company by two fellow claimants which were heard alongside the claimant’s claims at the hearing.[2]The claimant also brought a complaint of unfair dismissal. At the outset of the hearing, he identified that he believed he had a ‘whistle-blowing’ claim against the respondent for automatic unfair dismissal. It was pointed out that no such claim was disclosed by his ET1. In the circumstances, the claimant was informed if he wished to pursue such a claim, he would require to seek an adjournment to prepare written details of the matters complained of and thereafter to make an application to amend his claim form to introduce the new facts and legal claim, which application would then be considered. The claimant confirmed he did not wish to do so, and was content to proceed on the basis of her ‘ordinary’ unfair dismissal claim.[3]This final hearing took place remotely by video conferencing. The parties did not object to this format. A face-to-face hearing was not held because of the Covid 19 pandemic and issues were capable of determination by a remote hearing.[4]A notice of the claim was sent to the respondent. The respondent entered a response and subsequently intimated amended grounds of resistance. A notice of the hearing was sent to the respondent on 9 June 2021. The respondent did not attend and was not represented at the hearing. Numerous attempts were made in advance of the hearing to contact the respondent to arrange a CVP test. The Clerk emailed the respondent on 5, 7, 12 and 14 July 2021 and attempted to reach the respondent by telephone on 8, 13 and 14 July 2021. The Clerk obtained no answer. The Clerk attempted to call the respondent again on the morning of the hearing. It was elected to proceed with the hearing in the respondent’s absence under Rule 47, having considered all information available and made such enquiries as were practicable as to the reasons for the respondent’s absence.[5]Oral reasons were given at the hearing. Written reasons will not be provided unless they were requested at the hearing or are asked for by any party within 14 days of the sending of this written record of the decision.[6]The Tribunal determined there to be a need for a separate hearing to determine remedy in respect of the complaint of unfair dismissal, save to the extent specified in paragraph 6 of the judgment above. The three days allocated was insufficient to hear evidence on remedy in relation to the unfair dismissal complaint of the claimant and one of her fellow claimants and relevant documentary evidence on this issue had not been produced in the joint bundle (see Case Management Order below).[1]A remedy hearing (by CVP) shall be listed for three hours on the next available date after 5 August 2021 to determine the Claimant’s remedy entitlement arising from the foregoing judgment on liability. The remedy hearing shall be listed separately to the remedy hearing in the claim 4102720/2020 (Shotton v Avocet Faculties Ltd).[2]The Respondent and any representative will be entitled to:a. attend the remedies hearing;b. submit written submissions to the tribunal on remedy / compensation which have not been determined, and any such submissions shall be sent to the claimant and copied to the tribunal by no later than 4 pm on the business day falling two business days before the remedies hearing;c. cross-examine the claimant’s witnesses on issues of remedy / compensation which have not been determined only;d. make oral submissions to the Tribunal on issues of remedy / compensation which have not been determined only;[3]By 4 pm on 5 August 2021, the Claimant shall send to the Respondent and to the Tribunal by email the following. Please see paragraphs 8 to 12 below for more information on how these documents should be organized and formatted:a. An updated schedule of loss(i) particularising all sums sought; and(ii) providing a clear explanation of how each sum is calculated;b. Particulars of benefits received since 17 April 2020;c. Particulars and evidence of any income / earnings from any source since 17 April 2020;d. Particulars of any efforts to mitigate loss arising from the dismissal to include applications for alternative employment; other documentation showing or tending to show efforts to secure employment; and documentation showing or tending to show income received from self-employment since 17 Aprile. Copies of any documents on which the claimant intends to rely at the hearing which shall include copies of the following: i. The claimant’s bank statements for the period 17 April 2020 to 31 July 2021. Leave is granted for the claimant to redact irrelevant entries / private information. ii. In the absence of appropriate payslips which were not supplied latterly by the respondent, bank statements in the period prior to 17 April 2020 and such other documentation as shows or tends to show the claimant’s entitlement to salary and other benefits prior to the termination of employment with the respondent; iii. documents evidencing the respondent’s employer contributions to the claimant’s pension in 2019 and 2020 (or confirmation he has none); iv. the claimant’s P60s for tax years 2018/2019 and 2019/2020 (claimant must check HMRC do not have copies) (or confirmation there are none); v. any other documents relevant to compensation / remedy on which the claimant intends to rely at the remedies hearing.[4]While the pandemic continues there are good reasons to avoid the unnecessary use or transmission of hard copy documents. When exchanging documents, the parties may do that simply by sending scans to each other.[5]The claimant must send the documents listed in paragraph 3 and sub paragraphs to the respondent and to the Employment Tribunal by email by not later than 4 pm on 5 August 2021 in the format prescribed below.[6]The file of documents must be contained in a single pdf file as far as reasonably practicable and should be indexed and paginated. The visible pagination must match the pagination of the electronic pdf file. That means that sub-divided pagination (e.g “pages 56A to 56C”) should not be used under any circumstances. It also means that the index must itself be paginated.[7]Unless the Tribunal has ordered otherwise, each side can decide whether they wish to use hard copy printed documents during the preliminary hearing or electronic documents displayed on a suitable screen. If electronic documents are to be used, then an additional screen or device will be needed to display them because the video link will require a dedicated screen of its own.[8]Each witness (if any are called other than the claimant) will require their own copies of the joint file of documents. The party calling the witness must ensure that the witness can refer to those documents during the hearing, on a separate screen or device if they are viewing them electronically.[9]Unless and until notified that the Tribunal needs hard copies, the parties should assume the Tribunal is happy to receive documents solely in electronic PDF format.[10]The parties are referred to the joint Presidential Guidance, Practice Direction and FAQ documents issued in response to the pandemic. All are updated as necessary and are freely available online1[11]The equipment test offered by the Tribunal is extremely important. Experience suggests that most technical problems can be detected and solved during the test. The parties and all of their witnesses (if any) must participate in the test. A failure to do so without good reason could be regarded as a failure to comply with the overriding objective in rule 2 if technical difficulties then arise during the hearing. IMPORTANT INFORMATION ABOUT ORDERS 1) If this order is not complied with, the Tribunal may make an Order under Rule 76 (2) for expenses or preparation time against the party in default. 2) You may make an application under Rule 29 for this Order to be varied, suspended or set aside. Your application should set out the reason why you say that the Order should be varied, suspended or set aside. You must confirm when making the application that you have copied it to the other party(ies) and notified them that they should provide the Tribunal with any objections to the application as soon as possible. 3) If this order is not complied with, the Tribunal may make an Order under Rule 76 (2) for expenses or preparation time against the party in default 1 https://www.judiciary.uk/publications/directions-for-employment-tribunalsscotland/[1]This final hearing on remedy took place in the Edinburgh Employment Tribunal by CVP. A hearing on liability was held on 14-16 July 2021. The respondent had entered an ET response but did not attend, and was not represented at, the hearing in July 2021. Oral judgment was given on 16 July 2021 and the written record was sent to parties on 12 August 2021. It was declared that the claimant had been unfairly dismissed. The question of remedy in relation to the claimant’s unfair dismissal complaint (only) was held over, save that the Tribunal made the following determinations relevant to remedy for that complaint: i. The claimant has no entitlement to a basic award in this case by operation of s122(4) of ERA (having received a statutory redundancy payment). ii. The dismissal was neither caused nor contributed to by any action of the claimant for the purposes of s.123 (6) of the Employment Rights Act 1996; and iii. The respondent has not discharged the burden of satisfying the Tribunal that a fair dismissal would have ensued or that the claimant’s employment would have ended lawfully within any particular timescale. No Polkey reduction therefore falls to be applied to any compensatory award.[2]It was found that the claimant was dismissed on 1 7 April 2020. At the previous hearing in July 2021, the Tribunal made an award of damages for wrongful dismissal in respect of the claimant’s losses during the statutory minimum 3- week notice period to which he was entitled.[3]On 13 August 2021, before a hearing on remedy had been convened, the respondent was struck off the Register of Companies and on 24 August 2021 , the respondent company was dissolved. On 31 May 2023 the respondent was restored to the Register.[4]A Notice of Hearing was sent to both parties in respect of the hearing on remedy. It was sent to the respondent’s registered office as recorded on Companies House. The respondent did not attend the hearing and was not represented. I decided to proceed with the hearing in the respondent’s absence pursuant to Rule 47, in circumstances where the respondent had a history of non-attendance at previous hearings in the proceedings.[5]The claimant gave evidence on his own behalf. Evidence was taken orally. A file of productions was lodged by the claimant running to running to 347 pages. The claimant was permitted to lodge additional documents relevant to his income since dismissal during the course of the hearing.issues to be determined
[6]The issues for determination at the remedy hearing were as follows: 1 ) If there is a compensatory award, how much should it be? The Tribunal will decide: i. What financial losses has the dismissal caused the claimant? ii. Has the claimant taken reasonable steps to mitigate his loss in the period from and after 8 May 2020? iii. If not, what period of loss should the claimant be compensated? Findings in Fact[7]The following facts were found to be proved on the balance of probabilities.Background
[8]The claimant was employed by a predecessor company (Avocet Agriculture Limited) from 1 October 2016. Another group company was named Avocet Agriculture Limited (the respondent in this case). The claimant’s employer changed its name to Avocet Farms Limited. The claimant transferred from the employment of that company the employment of associated company, Avocet Agriculture Limited on 1 9 June 2019. This company (the respondent) changed its name to Avocet Agritech Limited thereafter. The claimant worked for the respondent until he was dismissed on 17 April 2020.[9]He was employed by the respondent to undertake farmwork, principally cattle husbandry. He was not provided with a written contract of employment or statement of particulars.[10]His agreed annual salary at the time of his dismissal was £70,000 per annum. This equated to £5,833.33 gross per month and to approximately £3,762 net per month. His weekly gross wage was £1 ,346. 1 5 (gross) and £868.22 (net). He received no benefits from the respondent and no employer pension contributions were paid on his behalf.[11]In the period following his dismissal, the Covid 19 pandemic resulted in Government restrictions and the country was in the first phase of lockdown.[12]Prior to and after his dismissal, the claimant had income from two other employments. He was employed by Sandy Jeffrey Limited, his father’s company. Both before and after his dismissal, he was paid approximately £732 per month for office work duties undertaken for this company. This arrangement continued until the claimant’s father passed away in or around December 2022. The claimant’s income from this employment neither increased nor decreased following his dismissal by the respondent.[13]The claimant also held a job with the fire service (Northumberland County Council (NCC)) while he was employed with the respondent. This also continued after his dismissal. He increased his on-call availability after he was dismissed by the respondent. On average, in the pre-dismissal period from 15 January 2020 to 15 April 2020, the claimant’s net monthly income from NCC was £267.64. On average in the post-dismissal period 15 May 2020 to 15 July 2021, his net monthly income from NCC was £397.05. The average net monthly increase after the claimant’s dismissal when his on-call availability increased was £129.41.[14]The claimant did not apply for any jobs in the period from 8 May to August 2020. He was greatly affected by stress arising from his relationship with the respondent and its termination in this period. He was also discouraged by the Covid 19 situation and the effects on the labour market. In August 2020, he entered a partnership renting out electric bikes. He has not drawn any income from the venture which continues at the date of the hearing. The partnership owns 12 electric bikes worth approximately £24,000. It has a modest cash balance in the bank account. All profits generated by the partnership since its inception (approximately £15,000) have been re-invested in the business to purchase more bikes. The claimant worked ,and continues to work, full time hours on this venture.[15]In September 2020, the claimant secured some work for an engineering company called Glendale Engineering. He was engaged on a ‘zero hours’ contract, and the number of hours and income fluctuated. The work dried up io at the end of February 2021 . The claimant’s average net monthly income from this employment was £276.37. The pattern of payments received over the 7 month-period from September 2020 to February 2021 was: 25 Sep 20 £86.23 26 Oct 20 £286.71 24 Nov 20 £63.51 26 Nov 20 £350.95 7 Dec 20 £50.00 23 Dec 20 £683.81 26 Jan 21 £315.88 26 Feb 21 £96.48[16]When that work ended the claimant did not seek any alternative employment. 1 7. The claimant suffered and continues to suffer from stress which he attributes to the conduct of the respondent and its officers / former officers. He has received no medical diagnosis or treatment in relation to his mental health. He has not been in receipt of any state benefits relating to his mental health (or at all).[18]Although experiencing symptoms of stress, the claimant was fit to work immediately following his dismissal at least in the capacity of his pre-existing jobs and, later, in his electric bike venture as well as the period of work undertaken for Glendale Engineering. He has been fit to work since.[19]The claimant did not seek or secure any other paid employment until 1 May 2023, when he secured work as a manager of a convenience store. Observations on the evidence[20]I found the claimant attempted to give his evidence in an honest and straightforward fashion in order to assist the Tribunal. He showed occasional lapses in recollection but readily corrected himself where this occurred. Relevant Law Unfair DismissalRelevant Law
[21]Section 94 of the Employment Rights Act 1996 (ERA) provides that an employee has the right not to be unfairly dismissed.[22]The compensatory award is such amount as the Tribunal considers just and equitable in all the circumstances, having regard to the loss sustained by the employee as a result of dismissal insofar as attributable to actions of the employer. The compensatory award is to be assessed so as to compensate the employee, not penalise the employer and should not result in a windfall to either party (Whelan v Richardson [1998] IRLR 1 14).[23]An unfairly dismissed employee is subject to a duty to make reasonable efforts to obtain alternative employment to mitigate his losses and sums earned will generally be set off against losses claimed (Babcock FATA v Addison [1987] IRLR 173).[24]The duty is to act as a reasonable man would do if he had no hope of receiving compensation from his employer (per Donaldson J in Archibold Freightage Ltd v Wilson [1974] IRLR 10). It may not be unreasonable for an employee to take himself out of the job market to pursue training or study. However, it will be appropriate for the Tribunal to consider whether that is a matter of personal choice and whether the loss may be considered to be too remote a consequence of the dismissal (Simrad Ltd v Scott [1997] IRLR 147, EAT, Hibiscus Housing Association Ltd v McIntosh UKEAT/0534/08).[25]Likewise, the reasonableness of a decision to set up in business will require to be assessed on the facts and circumstances of the case but relevant factors may be the employee’s circumstances, including their experience, contacts and knowledge, as well as the state of the industry they have chosen for their new venture.[26]It is similarly a matter of fact and degree for the tribunal to determine whether and when it becomes unreasonable for an employee to decide not to consider lower paid or lower skilled employment in a different sector. It will not commonly be unreasonable for them to lower their sights immediately, but may become so in time, depending on the circumstances of the case.[27]A qualification to the principle of mitigation is that it will not apply fully to payments earned elsewhere during the notice period. In Norton Tool Co Ltd v Tewson [1972] IRLR 86, it was held that the employee was entitled to full wages in respect of the notice period without mitigation on the basis that this was good industrial relations practice. (This principle does not apply to claims for wrongful dismissal). There may be exceptions to the Norton Tool principle; in Babcock FATA Ltd v Addison [1987] IRLR 177, the Court of Appeal accepted the principle is generally applicable but not as a rule of law entitling the employee in every case to full wages in the notice period. The employer should pay such sums as good industrial relations practice requires and sums earned by way of mitigation should not be offset. Where, however, full wages for the notice period would exceed the sum an employer ought to pay on dismissing in good practice, mitigation will apply to that excess.[28]There is a cap on the compensatory award for unfair dismissal. This is the lower of one year’s pay and the statutory cap which, at the material time, was £88,519. Submissions[29]The claimant declined to make a submission, save to explain that he was under significant stress as a result of the conduct of the respondent and to advise that he continued to be in difficult correspondence with former directors of the respondent to this day. in the circumstances, he felt he could not have done more to discharge his duty to mitigate his losses. He also referred to the impact of the Covid 1 9 pandemic on the job market. Discussion and Decision Basic Award[30]The claimant is not entitled to a basic award, having received a statutory redundancy payment from the respondent. Compensatory Award[31]The first task is to calculate the loss which the claimant sustained in consequence of the dismissal and in so far as the loss is attributable to action taken by the employer.[32]The claimant has already been compensated by an award of damages for the period from 17 April to 8 May 2020 and no losses are recoverable in respect of that period in accordance with the principle of ‘no double recovery’.[33]I am satisfied that, in the months immediately following the claimant’s dismissal, he made reasonable endeavours to mitigate his loss. I accepted that, although he received no medical treatment or formal diagnosis, he was greatly affected by stress in the aftermath of the termination of his employment, arising from the dismissal and from matters related to employment. I accepted there was a particularly challenging job market at the material time as a result of the Covid restrictions in place and, in those circumstances, it was not unreasonable for the claimant to seek to replace his income by increasing his on call hours with NCC as well as setting up a business venture and taking on casual work for Glendale Engineering.[34]From 8 May to 1 September 2020 (1 7 weeks), the claimant’s lost net earnings from the respondent were £14,759.74 (17 x £868.22). During that time, he received ‘extra’ income from NCC which he had not enjoyed while employed by the respondent as a result of the increase to his on-call availability. That ‘extra’ portion of the NCC income was £129.41 per month or £29.87 per week (£129.41 Z4.333 average weeks in a month). In the material period from 8 May to 1 September 2020, the claimant therefore received around £507.79 ‘extra income’ from NCC which falls to be deducted from his losses. His losses in this period were, therefore, £14,759.74 LESS £507.79 = £14,251.95.[35]In the period from 1 September 2020 to 8 November 2020, the claimant’s net loss of earnings from the respondent were £8,539.74 (2.27 months x £3,762 net per month). He had extra income from NCC in this period of £293.76 (2.27 x £129.41 ). He also received income from Glendale Engineering in this period in the total sum of £372.94. The total sum earned in mitigation in the period from 1 September to 8 November 2020 was, therefore, £666.70. When this sum is offset against the loss, the total loss of earnings from 1 September to 8 November 2020 is £7,873.04.[36]The claimant’s total uncompensated loss of earnings from the date of dismissal to 8 November 2020 are therefore £22,125.[37]I do not find that the claimant’s continuing loss from and after 8 November 2020 is recoverable. In that period the claimant had a continuing weekly loss of around £774.52 per week (when credit is given from the extra NCC income and - for as long as it lasted - the Glendale income). However, the claimant has made no attempt to mitigate that loss by finding additional supplementary employment or alternative replacement employment. The claimant was candid in his evidence that he was fit to work throughout and indeed that he was working full time on his electric bike partnership venture. While I do not consider the claimant was unreasonable in his initial decision to set up in business in his own account given the prevailing circumstances at the time he did so, it has been clear for a considerable period of time that the business is not profitable, yet consumes substantial time on the claimant’s part.[38]I find that the continuing loss after the first 3 months or so of trading as a partnership (which expired in November 2020) is too remote from the dismissal to be recoverable. That loss cannot continue to be attributed to the respondent’s dismissal of the claimant as opposed to the claimant’s career and business choices in circumstances where he did not seek alternative work or choose to take drawings from the venture, instead re-investing any profits. The claimant did not to use reasonable endeavours to mitigate the associated loss of income by seeking additional or replacement employment from and after 8 November 2020. I find that failure was unreasonable in all of the circumstances of the case.[39]The Tribunal awards £500 to the claimant by way of compensation for loss of statutory rights.[40]The total compensatory award is, therefore, £22,625.Conclusion
[41]The Tribunal, having previously declared that the claimant was unfairly dismissed, orders the respondent to pay him a compensatory award in the total sum of £22,625.