Employment Judge I McFatridgeMr Cozzolino for claimantDirector for claimantDate 14 November 2018
JUDGMENT
The Judgment of the Tribunal is that(1) The respondents unlawfully withheld wages from the claimant in the sum of Three Hundred and Sixty Three Pounds and Seventy Five Pence (£363.75). The respondents shall pay this sum to the claimant.(2) When the proceedings began the employer was in breach of his duty to the employee under Section 1(1) of the Employment Rights Act 1996 (duty to give a written statement of initial employment particulars). The respondents shall pay to the claimant the sum of One Hundred and Sixty Seven Pounds and Eighty Eight Pence (£167.88) (two weeks’ pay) in terms of Section 38 of the Employment Act 2002.(3) The claimant’s claim of automatically unfair dismissal is dismissed. E.T. Z4 (WR)
REASONS
[1]The claimant submitted a claim to the Tribunal in which she claimed that she had been automatically unfairly dismissed by the respondents. She claimed that she was due a sum in respect of arrears of wages outstanding as at the time of termination of her employment. The respondents submitted a response in which they denied the claims. They did not provide any detail of their position. A hearing was fixed and at the hearing both the claimant and the respondents’ Director Mr Cozzolino gave evidence. Both gave their evidence through interpreters, in the claimant’s case a Lithuanian interpreter and in Mr Cozzolino’s case an Italian interpreter. In advance of the hearing the claimant had produced a written witness statement which she adopted as her evidence in chief. She also produced a number of documents. On the basis of the evidence and the productions I found the following essential facts to be proved or agreed. Findings In Fact[2]The claimant commenced working for the respondents at their Nardini restaurant at 157-159 South Street, St Andrews on or about 9 August 2017. She then left for a period of around four weeks in November 2017 and returned to work in December 2017. She continued to work until she was dismissed on 3 March 2018.[3]The respondents operate a system of pooled tips. Tips are pooled and are then divided between employees once a year just before Christmas. The division is according to an unpublished formula which takes account of the number of hours worked, the number of staff on duty, the days of the week on which staff have worked etc. Although the claimant was working in the restaurant in December 2017 she did not receive any share of the tips. The respondents’ position is that this was because there was a break in her employment in November and she had forfeited her right to tips by leaving for a period. This was not explained to the claimant at the time. The claimant’s understanding was that she was aware that the respondents’ policy was that tips were to be pooled and would then be shared at some point but she became concerned that as the months went by she did not receive any share of the tips.[4]The claimant did not receive a statement of particulars of employment either in August 2017 when she started or in November 2017 when she returned to work. The arrangement regarding tips was never properly explained to her and her view was that management were probably keeping the tips for themselves.[5]At some point in January/February 2018 Mr Cozzolino was advised by various members of staff that the claimant had started keeping her own tips for herself. On 3 March 2018 the claimant was serving a customer and received some tips. She took them and placed them into her pocket. She was observed doing this by Mr Cozzolino. When she left the customer’s table he told her that she was being dismissed with immediate effect. He said that the reason for dismissal was that “it is not the first time you have been taking tips for yourself”. Mr Cozzolino’s understanding of the position was that whilst an employee usually required notice of termination, no notice was required if they were being dismissed for gross misconduct such as for being drunk on duty or theft.[6]Following the termination of her employment it was common ground that the claimant was owed the sum of £363.75 in respect of the hours she had worked from 1 February until 2 March. The respondents withheld payment of this. It was their view that they were entitled to do so because the claimant had committed theft.[7]It was common ground between the parties that the claimant had not received a statement of terms and conditions of employment. The respondents’ position was that they were unaware of the requirement to do this on the basis that they followed national guidelines. Matters Arising from the Evidence[8]Although both parties had a different view of the relevant facts in this case their evidence was remarkably consistent. I accepted Mr Cozzolino’s position that the respondents did have an arrangement whereby tips were to be pooled. I also accepted his evidence that they were to be divided at Christmas each year but that the claimant had not been paid at Christmas because of a break in her employment. I also accepted the claimant’s position that this had never been explained to her but that she was aware that the respondents wanted all tips to be placed in to a common pool. She had no information about when and how tips would be distributed and when and if she would receive a share. In the circumstances, it is entirely understandable she thought that management were probably keeping these for themselves. There was agreement that the claimant was due the arrears of wages. The respondents’ position was simply that they were refusing to pay this because the claimant was guilty of theft. At the end of the hearing Mr Cozzolino made a statement to the effect that he would agree to pay the claimant half what she was due in exchange for not raising criminal proceedings. I did not feel this assisted his case. There was agreement that no statement of terms and conditions of employment had been issued in this case. When asked about this by the claimant Mr Cozzolino stated: “We don’t have any specific employment contract – we follow national guidelines.” With regard to the circumstances of the dismissal itself both parties were in agreement that Mr Cozzolino had told the claimant that she was being summarily dismissed for taking tips. There was no question at that stage of the claimant verbally asserting any of the statutory rights set out in section 104(4) of the Employment Rights Act 1996. The claimant did not say anything before Mr Cozzolino dismissed her. Discussion and Decision[9]As noted above, there was remarkable agreement between the parties as to the facts in this case. Where they differed was in the legal interpretation of these facts and it has to be said that neither party appeared to have any knowledge of employment law. Whilst this is understandable in the case of the claimant I found it somewhat concerning in the case of the respondents who appear to employ six people. As I explained on the day, the claims in this case are separate and my decision involves detailed consideration of the statutory provisions applying in each case. Arrears of Wages[10]In this case the relevant legislation is Section 13 of the Employment Rights Act 1996 which provides that an employee has the right not to suffer unauthorised deductions from their wages. In this case there was agreement between the parties that wages in the sum of £363.75 were due. The respondents’ position was that they were entitled to make a deduction from this because the claimant was guilty of theft. This is simply incorrect. Deductions can only be made in certain extremely specific circumstances and even if the claimant had been guilty of theft the respondents are not entitled to make any deduction from wages. Wages must be paid in full. The only exception to this is if the deduction is required or authorised to be made by virtue of any statutory provision or the worker has previously signified in writing his agreement or consent to the making of the deduction (Section 13(1)). There was absolutely no evidence that this was the case here. Accordingly, the claimant is entitled to be paid her arrears of wages in full. Automatically Unfair Dismissal[11]In UK employment law an employee only acquires the right to sue for compensation for unfair dismissal once they have been employed for a continuous period of two years. That was not the case here. Accordingly, the claimant does not have the right to claim unfair dismissal in the normal way. There are however certain very limited exceptions to this. One of these is where an employee is dismissed and the reason for dismissal is that the employee has asserted a statutory right. The relevant provision is Section 104 of the Employment Rights Act 1996. Prior to the commencement of the hearing Employment Judge Robison had written to the claimant asking her to confirm that she was still proceeding with the unfair dismissal claim and the nature of this. In the application form the claimant had ticked the box for unfair dismissal but not provided any details beyond this. The claimant’s response was to the effect that she was proceeding with the claim of unfair dismissal. Since the background to the claim was that the claimant was asserting that she was due unpaid wages the claim was allowed to proceed to a hearing so as to ascertain whether or not there was a valid claim of automatically unfair dismissal for asserting a statutory right. Having heard the evidence and indeed on the basis of the claimant’s own witness statement it is clear that this was not the case. The claimant was dismissed for putting tips in her pocket. There is no suggestion that she asserted any statutory right whilst doing this. Both parties were clear that there was no real conversation prior to Mr Cozzolino telling her that she was dismissed. Accordingly, her claim of unfair dismissal cannot succeed. Notice Pay[12]During the course of the hearing the claimant indicated that she felt she was entitled to one week’s notice pay. This was the first time this had been mentioned and it was not mentioned by her in her claim form. There was accordingly no claim for notice pay before the hearing. I was satisfied on the basis of what the parties said that the reason for the dismissal in this case was that the claimant was taking tips for herself. Whilst it appears clear to me that the claimant was not given full details of whatever scheme the respondents allegedly use to divide tips it is clear that she was aware that tips were supposed to be handed to management. The respondents are correct in saying that an employer is entitled to dismiss without notice in cases of gross misconduct. If a claim of wrongful dismissal had been made the issue for me to decide would have been whether, in those circumstances, the Claimant was guilty of gross misconduct. Since the claimant did not claim notice pay in her ET1 this is not a claim that I am required to adjudicate on and I shall not do so. Section 38 Employment Act 2002[13]During the course of the hearing the claimant confirmed that she had not received a statement of particulars of employment either when she commenced work in August 2017 or when she returned to work in November 2017. The right to a statement of initial employment particulars is a key right and indeed is to be found in Section 1 of the Employment Rights Act 1996. This provides that such a statement of initial particulars must be given to the employee not later than two months after the beginning of the employment. This was not done in this case. I found Mr Cozzolino’s evidence that the Respondents do not issue contracts of employment to be extremely surprising given that the respondents are running a business which employs a number of people. His statement that they simply apply national guidelines is a completely inadequate answer. Section 38 of the Employment Rights Act provides that if when the proceedings are begun the respondents are in breach of their obligation to provide such a statement the Tribunal must, (unless there are exceptional circumstances so as to make an award or increase unjust or inequitable) make an award of either two weeks’ pay or four weeks’ pay. It is clear to me that the terms of Section 38 were engaged in this case. There were no such exceptional circumstances which would make it inappropriate to make such an award. I require to consider whether to award two weeks’ pay or four weeks’ pay. Whilst I consider that the respondents’ position is totally unsatisfactory I require to balance against that the fact that I was satisfied that Mr Cozzolino was genuinely unaware of his obligations in the matter. There is also the fact that they are a rather small business and that the claimant had only worked for a few weeks after the two months deadline for producing a statement of particulars. On the other hand it is also clear to me that much of the difficulty in this case has been due to a failure in communication between the parties. Whilst I accepted Mr Cozzolino’s evidence that the respondents do have a scheme for dividing tips it is clear to me that they did not communicate this to the claimant. It appeared to me that if they had done this then in all likelihood the current situation would not have arisen. I would hope that this clear demonstration of the usefulness of giving an individual a statement of particulars of employment will cause the respondents to change their policy and comply with the law in future. On this occasion however, I am prepared to limit the award to two weeks’ pay. Calculation of a week’s pay requires to be done in accordance with Chapter 2 of Part 14 of the Employment Rights Act 1996. On the basis of the information I had the claimant had earned £363.75 for the month prior to her employment terminating. This equates to £83.94 per week. Two weeks’ pay is therefore £167.88.[14]The claimant indicated in her ET1 that she was claiming £50 for general inconvenience. This is not a claim that the Tribunal can adjudicate on. The claimant did not lead any evidence of any specific costs to which she had been put as a result of the respondents’ failure to pay her timeously and accordingly no additional sum can be awarded.