Mr E J Carding-Moorhouse v Providence Travel Ltd: 6009763/2024

EMPLOYMENT TRIBUNALS

Case No 6009763/2024

Between

Mr E J Carding-MoorhouseClaimant

Providence Travel LtdRespondent

Before

Employment Judge Eeley

Mr M Todd (instructed by Counsel) for claimant

Date 7 February 2025

JUDGMENT

[1]The complaint of unauthorised deductions from wages is well-founded. The respondent made an unauthorised deduction from the claimant's wages in respect of February and March 2024.

[2]The respondent shall pay the claimant £3000, which is the gross sum deducted. The claimant is responsible for the payment of any tax or National Insurance.

[3]The complaint of breach of contract in relation to notice pay is well-founded. The claimant was entitled to one week’s pay in respect of notice. However, that notice pay is already accounted for in the award for unauthorised deductions from wages above. Thus, no additional sum of notice pay is awarded.

[4]The complaint in respect of holiday pay is well-founded. The respondent made an unauthorised deduction from the claimant's wages by failing to pay the claimant for holidays accrued but not taken on the date the claimant’s employment ended. Case Number: 6009763/2024 2

[5]The respondent shall pay the claimant £975. The claimant is responsible for paying any tax or National Insurance.

[6]The respondent unreasonably failed to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures 2015 and it is just and equitable to increase the compensatory award payable to the claimant by 10 % in accordance with s 207A Trade Union & Labour Relations (Consolidation) Act 1992. The respondent shall pay the claimant £397.50 in this regard.

[7]When the proceedings were begun the respondent was in breach of its duty to provide the claimant with a written statement of employment particulars. There are no exceptional circumstances that make an award of an amount equal to two weeks’ gross pay unjust or inequitable. It is just and equitable to make an award of an amount equal to four weeks’ gross pay. In accordance with section 38 Employment Act 2002 the respondent shall therefore pay the claimant £1500.

REASONS

[1]The claimant in this case brings claims for holiday pay, notice pay, unauthorised deductions from wages and for compensation for breach of the duty to provide a section 1 written statement of employment particulars (pursuant to section 38 Employment Act 2002).

[2]In order to determine this case I had regard to the contents of an electronic hearing bundle. It consisted of 130 pages. It included the claimant’s witness statement and the witness statement of Mr Kevin Yallop on behalf of the respondent. It also contained the claimant’s schedule of loss.

[3]I heard oral witness evidence from both witnesses and heard submissions on behalf of both parties.

[4]This is a monetary claim for sums which the claimant says he was owed pursuant to the contract under which he worked for the respondent. It is not a claim about unfair dismissal. I am looking purely at the financial entitlements arising from the parties’ contractual agreement. I am not asked to consider Case No. 6009763/2024 2 wider issues of fairness. I am not asked to consider whether the claimant was a good employee, just what his legal entitlements were. I am not called upon to decide whether the claimant was honouring the spirit of his agreement with the respondent or whether he took advantage of Mr Yallop’s good nature. I must also ignore the respondent’s financial situation in deciding the claimant’s legal entitlements. I leave out of account whether the respondent had the available finances to pay what was owed and whether paying such sums was going to cause the business financial difficulties or cash flow difficulties.

[5]I have to decide what was the basis of the employment relationship between the parties including:a. What was the agreement regarding pay at the outset of the arrangement?

b. Did the parties agree to change the basis on which the claimant was paid or otherwise vary his financial entitlements under the contract (i.e. did they vary the terms of the initial agreement?)

c. What sums of money were owed to the claimant at the end of his employment pursuant to contract and statute?

d. Should an uplift be applied to compensation to recognise an unreasonable breach of the applicable ACAS code of conduct on grievance and disciplinary matters.

The law

[6]The claim for unauthorised deductions is governed by the provisions of the Employment Rights Act 1996. Section 13 sets out the right not to suffer unauthorised deductions from wages. I have to consider whether the amount of wages paid on the relevant occasion(s) was less than what was ‘properly payable’ to the claimant. I have to consider whether such a deduction was properly authorised pursuant to statute or contract. Alternatively, had the employee previously signified his consent to the deduction (section 13(1) ERA 1996)? Section 13(5) indicates that a variation to the contract cannot have effect to authorise a deduction which was made before the date of the variation in question. Likewise, the worker’s consent/agreement must be signified before the relevant deduction is made (s13(6)). A worker may bring a complaint for unauthorised deductions from wages to the tribunal pursuant to section 27 Employment Rights Act 1996.

[7]A claim for unpaid notice pay is a claim for breach of contract and is governed by common law principles plus the provisions of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994. I have to discern the express and implied terms of the contract as agreed between the parties, whether orally or as recorded in writing. The entitlement to a minimum notice period is governed by s86 Employment Rights Act 1996. The statutory minimum for employment of less than two years’ duration (but more than one month) is one week. Case No. 6009763/2024 3

[8]In the absence of a contractual agreement to the contrary, holiday entitlement is governed by the Working Time Regulations 1998. Regulation 13 and 13A set out the amount of annual leave a worker is entitled to. Regulation 14 provides for payment, on termination of the employment, for accrued but untaken annual leave as at the date of termination. A claim for failure to pay the accrued but untaken annual leave on termination can be pursued via regulation 30 or as a claim for unauthorised deductions from wages pursuant to the statutory provisions set out above.

[9]Pursuant to section 1 of the Employment Rights Act 1996, a worker is entitled to a statement of initial employment particulars. Section 38 of the Employment Act 2002 provides that an award of compensation may be made in relation to the breach of section 1 (ERA 1996) where the claimant has pursued a claim or claims within one of the relevant jurisdictions listed in schedule 5 to the Act. The s38 award is essentially parasitic on a successful claim in one of the listed jurisdictions.

[10]An uplift on compensation of up to 25% can be made where the respondent was unreasonably in breach of the ACAS Code of Practice on Disciplinary and Grievance Procedures.

Findings

[11]The claimant was employed by the respondent from 4 September 2023 as a bus driver. The respondent is a small business. There were only two buses to be driven. The claimant drove one and Mr Yallop drove the other. The primary business was driving school buses. When not driving a bus, the claimant was engaged in bus yard duties, general administration tasks, training and other ad hoc duties as directed by Mr Yallop.

[12]When the bus route which the claimant drove was cancelled, his duties changed to share the remaining bus route with Mr Yallop and carry out other work. The respondent started to experience cash flow difficulties around this time. Mr Yallop wanted to change the terms of the contract between the claimant and the respondent so that he worked more weekends and his pay was reduced. The claimant says he could not afford to agree to this. No agreement to change the terms of the employment was reached between the parties.

[13]So, the conclusion I have to reach based on the evidence that is before me is that the agreement between the parties at the outset of the employment relationship was that the claimant would be paid a ‘flat rate’ of pay per month. This was based on a notional 30 hours of work per week. However, the claimant was not paid by the hour. Rather, 30 hours per week was the theoretical basis on which the monthly salary was calculated. This was hoped to be financially sustainable for the respondent. It may not have been a good or financially wise bargain from the respondent’s point of view but that is what the respondent signed up to with the claimant at the beginning of the relationship. It was hoped that over the course of a month (with the ‘swings and roundabouts’ or fluctuations in the amount of work available) the claimant would have actually worked for the 30 hours that he was being paid for. But the important point is Case No. 6009763/2024 4 that the rate of pay per month never actually fluctuated depending on the amount of work actually done by the claimant. All of the documentation (including pay slips, bank statements, reports to HMRC etc) refer to a flat salary, effectively, of £1,500 per month. There is no breakdown of an hourly rate. No time sheets have been kept that the parties have been able to direct me to. There has been no fluctuation in the amounts actually paid or reported.

[14]Halfway through the employment the respondent clearly realised that this was a bad bargain for the business. The respondent wasn’t in a position (financially) to continue paying the claimant according to its previous agreement with him. In order for the respondent to lawfully reduce the claimant’s pay there would have to have been an agreed variation to the contract. Alternatively, the respondent could have terminated the claimant’s contract of employment if it genuinely couldn’t honour the rest of the terms of the contract on an ongoing basis. Neither of those things happened. Instead, the claimant continued in his employment with the respondent with an ongoing entitlement to pay of £1,500 per month. However, he did not get that pay.

[15]I find that there was no agreement by both parties to change the basis of payment under the contract.

[16]Then the claimant gave notice to terminate the contract. Mr Yallop told the claimant that he did not need to work for the last week of March (starting 25 March.) As a result I find that the claimant was entitled to full pay for February and March on a flat rate of £1,500 per month gross and I will make an award in that regard.

[17]Pursuant to section 86 Employment Rights Act 1996, the claimant’s notice entitlement was 1 week. As the claimant gave notice to terminate the contract before the last week of the month and was released from an obligation to work his week’s notice, this means that his one week’s notice pay is actually included within the two months’ pay awarded above (February and March). It is already accounted for as part of the March pay. Hence, I have not made a separate and additional award in respect of notice pay.

[18]The claimant’s holiday entitlement was governed by the Working Time Regulations 1998. The regulations give a minimum entitlement of 28 days of paid annual leave per annum. This accrues at a steady rate throughout the term of the employment. At the termination of his employment the claimant had accrued seven twelfths (7/12) of his annual holiday entitlement.

[19]In the absence of proper record keeping I am afraid I am unable to satisfy myself that the claimant had in fact taken all of the holiday that Mr Yallop asserted in the course of his evidence. I appreciate what Mr Yallop says about how realistic it is to think that the claimant spent some time working from home. The respondent says that this was, in reality, annual leave. However, as employer, it is really for the respondent to keep proper records of the holidays that its employees take. I appreciate that is not easy in a small business such as this but, unfortunately, that is where, on balance, the obligation lies. Consequently my calculation in relation to holiday pay is that 7/12ths of 28 days is 16 days entitlement accrued. It is apparent from the evidence that, whichever days of Case No. 6009763/2024 5 the week the claimant actually worked in any given week, he was working to a five day week. 30 hours divided by 5 means that a day’s work reflected 6 hours of pay. The claimant had therefore accrued 96 hours of holiday pay. The evidence shows that the claimant had already taken 18 hours of that entitlement. This left an outstanding entitlement to accrued but untaken holiday pay of 78 hours at £12.50 per hour. This result in an entitlement to £975 of accrued holiday pay.

[20]I considered the relevance of the ACAS Code in relation to disciplinary and grievance procedures. It was not complied with by the respondent. It was invoked by the claimant but only months after the claimant had actually left employment- in June. He sent a short letter requiring a written response. Mr Yallop, as a small business owner is in a difficult position in terms of knowing the obligations he that has to comply with the Code. I have taken that into consideration. He does not have access to the same levels of advice and guidance as many larger businesses. I take into consideration the fact that the issue was raised by the claimant some considerable time later- after termination of employment. However, I also take into consideration the fact that the claimant’s letter was not responded to. I have the power to make an uplift to compensation of up to 25%. Taking into account the relevant circumstances of the case I have decided not to apply the maximum 25%. Instead, I am going to award 10% to reflect the balance of fairness and the extent to which the procedure has been breached. That gives 10% of the loss of earnings to date of £397.50.

[21]The claimant also has is a further statutory right to a written statement of initial terms and conditions (section 1 Employment Rights Act 1996). By his own admission Mr Yallop didn’t provide the claimant with written terms and conditions during his employment. I appreciate all the practical explanations he gives as to why that was difficult for him to do in this case. Unfortunately, the law sets out a minimum requirement that all employees have a right to receive a written statement of their terms and conditions. Whether it is difficult for a particular business to comply with that is nothing to the point. There has been a failure to provide the written terms and conditions which in fact has caused practical problems (mainly for the respondent in this particular case.) Consequently I have decided to award four weeks’ pay, £1,500, pursuant to section 38 Employment Act 2002.

[22]In light of the above, the total judgment sum will be £5,872.50. This comprises: £3,000 of unpaid wages, £975.00 of accrued but untaken holiday pay, a 10% ACAS uplift of £397.50; and £1,500 reflecting four weeks pay in relation to the failure to provide a written statement of employment particulars. Approved by: