Mr M Lain v Redd Brick Recruitment Ltd: 6010657/2024
JUDGMENT
[1]The complaint of breach of contract in relation to notice pay is well founded. The respondent shall pay the claimant £2,314.75 as damages for breach of contract. This has been calculated on the basis of one month’s pay of £3,541.67 less two days notice already paid (at £163.46 per day), less a £900 rebate which the respondent was entitled to deduct from the notice payment. This figure has been calculated using gross pay to reflect that it is Post Employment Notice Pay.[2]The complaint in relation to holiday pay is well-founded. The respondent made an unauthorised deduction from the claimant’s wages by failing to pay him for five days holiday accrued but not taken on the date his employment ended. The respondent shall pay the claimant £817.30 (5 x £163.46). This figure has been calculated on a gross basis as tax will need to be paid on it.[3]The respondent will be entitled to deduct tax and national insurance from the sums above so that the claimant receives the net value of the payments. Approved by: Employment Judge Edmonds 1 July 2025 Notes Reasons for the judgment having been given orally at the hearing, written reasons will not be provided unless a request was made by either party at the hearing or a written request is presented by either party within 14 days of the sending of this written record of the decision. If written reasons are provided they will be placed online. All judgments (apart from judgments under Rule 51) and any written reasons for the judgments are published, in full, online at https://www.gov.uk/employment-tribunal-decisions shortly after a copy has been sent to the claimants and respondents. If a Tribunal hearing has been recorded, you may request a transcript of the recording. Unless there are exceptional circumstances, you will have to pay for it. If a transcript is produced it will not include any oral judgment or reasons given at the hearing. The transcript will not be checked, approved or verified by a judge. There is more information in the joint Presidential Practice Direction on the Recording and Transcription of Hearings and accompanying Guidance, which can be found here: www.judiciary.uk/guidance-and-resources/employment-rules-and-legislation-practice-directions/ 1 Case Number: 6010657/2024 EMPLOYMENT TRIBUNALS Claimant: Mr M Lain Respondent: Redd Brick Recruitment Ltd Heard at: Birmingham (CVP) On: 1 July 2025 Before:REASONS
Introduction, Procedure, Documents and Evidence Heard[1]The claimant was employed by the respondent, a small recruitment company which has two employees, as a Principal Consultant, from 1 November 2023 until his dismissal. The termination date of his employment was one of the matters in dispute and therefore I address it in more detail below: the respondent said it was 29 May 2024, the claimant says it was 28 June 2024. The claimant’s claim relates to an alleged failure to pay him for his notice period and failure to pay him a payment in respect of accrued but outstanding annual leave on termination of employment. There was a further issue as to whether the respondent was entitled to make deductions in respect of a commission rebate from any such payments due to him.[2]ACAS early conciliation commenced on 3 July 2024 and ended on 14 August 2024. The claim form was presented on 4 September 2024. Regardless of which termination date was correct, the claim was presented within the required time limits.[3]The hearing started late due to the fire alarm going off in the Tribunal building and the building having to be temporarily evacuated, and due to some time being spent trying to identify the relevant documents. I had been provided with various sets of papers but no single agreed bundle: there were two files from the respondent and a separate file from the claimant, none of which contained the complete set of relevant documents and/or 2 pleadings.[4]In addition the claimant said that he had not been sent the respondent’s documents in advance. There was also no separate witness statement from the claimant, and whilst the respondent had provided two witness statements, a page was missing from Miss Cook’s statement and Mrs Rickards was not intended to attend the hearing to give oral evidence due to work commitments (she no longer worked at the respondent). The respondent had also omitted to disclose its commission structure document which was a relevant document: given that the claimant had not reviewed any of the respondent’s documents I decided that the commission document should be accepted into evidence and arranged for it to be sent to the Tribunal and the claimant.[5]This all led to a detailed discussion about whether or not the parties were sufficiently ready to proceed with the hearing that day or whether it needed to be postponed. The claimant said that if he could have some time to review the papers that morning then he was happy to proceed. The respondent raised a concern that on reflection (and having been advised by me that I would need to consider what weight to give Mrs Rickards’ written statement in the absence of any oral evidence from her) she felt it may be beneficial for Mrs Rickards to give oral evidence. Ultimately Miss Cook was able to contact Mrs Rickards and arrange for her to join the hearing during her lunch break in order to give that oral evidence. In relation to the claimant’s witness evidence, there was in the file a written response he had provided to the contents of the respondent’s ET3 (at page 52 of the claimant’s file), and we agreed to incorporate that document as his witness statement. I also asked the claimant some supplementary questions before we moved into the respondent’s cross examination in order to elicit some additional information that was not in that document.[6]During the course of these discussions the claimant raised a further issue. He alleged in effect that the respondent had sent someone to his home who had told his mother that there would be consequences for the claimant if he went ahead with his claim. The respondent denied this emphatically, saying that the person referenced by the claimant was not known to them and also raised alleged personal matters relating to the claimant which they said could result in others visiting him at his home. I do not repeat the precise detail of what each alleged here as it is not relevant for me to do so in light of the below. Nor do I make any comment as to the truth or otherwise of either party’s allegation as this is not something that I have sufficient knowledge of to be able to determine.[7]I explained to the claimant that there were three options if he wanted to take action (separate to pursuing the matter through the police):a. Requesting that the matter be referred to a leadership judge to determine whether the matter should be referred to the police / Attorney General as potential contempt of court;b. Apply under Rule 38 of the Employment Tribunal Procedure Rules 2024 for the respondent’s response to be struck out; and/orc. To apply for costs on the basis of the respondent’s alleged conduct of the proceedings. 3[8]Following a break for the claimant to consider the options, he explained that he wanted to proceed with his claim that day to get things resolved and draw a line under things. He did not make any application for strike out or for costs, and did not request the matter be referred for further consideration as potential contempt of court. Therefore, I made it clear to both parties that I was not determining what did or did not happen in this regard and that what had been said would not influence my decision.[9]Ultimately, having discussed all of these matters, I decided that we were able to proceed that day. I made clear to the parties that I would not be reading all of the documents and they would need to take me to any relevant ones. I also explained that any discussions with ACAS were confidential and should not be referred to (as I had noted that I had been provided with some correspondence between the parties and ACAS).[10]I then heard oral evidence from the claimant, Mrs Rickards and Miss Cook, and both the claimant and Miss Cook provided me with brief oral submissions before I reached my decision, which I delivered orally that afternoon. Claims and Issues[11]Before I heard evidence from the parties, I clarified and explained the issues that I would need to decide, which were as follows: 1. Wrongful dismissal / Notice pay1.1 What was the claimant’s notice period?1.2 Was the claimant paid for that notice period? (including what was the date of termination of employment, and whether he was given notice or terminated with immediate effect)1.3 If not, was the claimant guilty of gross misconduct? / did the claimant do something so serious that the respondent was entitled to dismiss without notice?1.4 Was the respondent entitled to make deductions from the claimant’s notice pay?1.5 Did the claimant refuse to work his notice period? 2. Holiday Pay (Working Time Regulations 1998)2.1 What was the claimant’s leave year?2.2 How much of the leave year had passed when the claimant’s employment ended?2.3 How much leave had accrued for the year by that date?2.4 How much paid leave had the claimant taken in the year? 42.5 Were any days carried over from previous holiday years?2.6 How many days remain unpaid?2.7 What is the relevant daily rate of pay? 3. Unauthorised deductions3.1 Were the wages paid to the claimant less than the wages they should have been paid?3.2 Was any deduction required or authorised by statute?3.3 Was any deduction required or authorised by a written term of the contract?3.4 Did the claimant have a copy of the contract or written notice of the contract term before the deduction was made?3.5 Did the claimant agree in writing to the deduction before it was made?3.6 How much is the claimant owed? 4. ACAS Code4.1 Did the ACAS Code of Practice on Disciplinary and Grievance Procedures apply?4.2 Did the respondent or the claimant unreasonably fail to comply with it?4.3 Is it just and equitable to increase or decrease any award payable to the claimant?4.4 By what proportion, up to 25%?Facts
[12]The Claimant’s employment with the respondent commenced on 1 November 2023. Under the terms of his contract of employment (page 32 of the respondent’s main file), he was entitled to:a. basic pay of £42,500 per annum payable in 12 equal monthly instalments.b. 25% uncapped commission subject to cleared funds hitting the account.c. holiday of 30 days per annum in addition to bank holidays. The holiday year ran from January to December and the claimant was not permitted to carry forward holiday under the terms of his contract (and he did not argue that he had done so).d. one month’s notice of termination of employment until such time as he had accrued 5 years’ service, at which point it would increase in line with statutory obligations. 5[13]There was a deductions clause setting out that deductions could be made from his salary in certain circumstances. Whilst commission rebate is not specifically listed, the clause states that the listed circumstances are not an exhaustive list and in evidence the claimant accepted that a rebate in respect of commission could theoretically be made. I find that commission rebate would be covered by the scope of that non exhaustive list of deductions that can be made.[14]An issue arose between the parties in April 2024 and there was a dispute as to whether the claimant had sought to resign during that period. It appeared to relate to matters linked to a restrictive covenant dispute from his previous employer and whether commission was payable to him, and to a desire on the claimant's part to be self-employed. Ultimately that commission was paid and the claimant did not leave and therefore I do not need to decide exactly what happened.[15]It is accepted between the parties that during his employment in 2024 the claimant took the following annual leave:a. 15 February 2024b. 16 February 2024c. 4 March 2024d. 6 March 2024e. 22 March 2024f. 27 March 2024g. 28 March 2024h. Half day on 24 April 2024 Therefore it is accepted that he took 7.5 days holiday in the 2024 holiday year.[16]The respondent says he also took 2 January, half day 15 January and 19 April as well. The claimant disputes this. I find as follows:a. In relation to 2 January it is accepted that there was some discussion about whether or not the claimant would take the day off and I find that the claimant was happy to return from his Christmas break a day later than the normal return to work date would otherwise have been and I find that this would be viewed as a holiday day. Whilst there may not be a written communication confirming that, this was a day selected by agreement between the parties for the claimant not to work and I find on balance of probabilities that this was a day's holiday.b. In relation to the half day on 15 January, this relates to a time when the claimant was caring for his son and taking him to counselling. The claimant says that his role was flexible and he was able to work whilst his son was at the appointment so this was not a leave day. The claimant's message to the respondent after being asked to do something was "Will do, I'm just at a CAMHS appointment with Jacob this morning, forgot to tell you Friday". The implication from this is that whilst he would do the task, it would be something he would pick up after the appointment and that he recognised he 6 should have told the respondent beforehand. I find on balance of probabilities that this should have been recorded either as unpaid time off to care for dependents or as annual leave, and in the absence of any information suggesting he was not paid for that half day I find that it was annual leave.c. In relation to 19 April, Miss Cook says that she recalls walking her dog whilst discussing the matter with the claimant and that he was ill but opted to take the day as annual leave rather than sickness in order to be paid for it in full. The claimant says that he did work that day. The chat message I have seen shows that Miss Cook messaged him at 8.19am saying "just stuck on a call. Call you in 10" and then the following Monday said "Morning Matt, hope you're feeling a bit better after weekend". I find on balance of probabilities, and noting Miss Cook's clear recollection of the incident and the fact that the claimant clearly had been unwell given the message on 22 April, that he was sick that day and opted to take annual leave as Miss Cook has recalled.[17]More generally, the claimant said that he would not take annual leave on a day when he was sick but based on the evidence I saw and in particular the fact that there is a message exchange from 25 March suggesting he did so (page 26 of the respondent’s main file), that he would take annual leave when off sick so that he remained on full pay.[18]Therefore the claimant had taken an additional 2.5 days' annual leave, making 10 days' annual leave in total.[19]On 28 May 2024 Miss Cook emailed the claimant asking him to attend a meeting the following day. She asked him to gather some information in advance. She did not tell him that he might be dismissed at that meeting.[20]At the meeting on 29 May 2024 the claimant and Miss Cook (who was accompanied by Mrs Rickards) discussed a number of matters. I accept Miss Cook's evidence that she did not initially intend to dismiss the claimant at that meeting but that the way that things developed she formed the view that the working relationship was beyond repair. Following a break in the meeting, she then dismissed the claimant verbally.[21]I find that she indicated to the claimant that he would be paid for his notice period and that he was not required to attend work during that period but was asked to effect a handover. His employment was not terminated with immediate effect. Later that day the claimant sent her an email with some handover information and the tone of the email was amicable. Therefore, whilst the relationship was clearly strained, it appears to have been professional at least at this point.[22]On 30 May 2025 the respondent turned off the claimant's access to emails, because they were worried about him taking information with him after he left (this was particularly so because of the restrictive covenant dispute they were aware of from the previous employer).[23]On 6 June 2024 the respondent sent the claimant an email confirming his 7 dismissal (page 56 of the claimant’s file). This referred to conduct issues around alleged disrespect and attitude but did not refer to any gross misconduct (and the respondent's position is that whilst they say they could have dismissed for gross misconduct and regret not doing so, it was not a gross misconduct dismissal). The termination date was not set out in this email, however it referred to the email serving as “formal notice of the termination of your employment” and it referred to a final paycheck being processed including all wages to termination. Given that he had already been paid in full for May, this must have meant that it was envisaged that he would be paid in June (and in evidence both witnesses for the respondent confirmed that the original intention was to pay him for his notice period). The email also said that he had no outstanding holiday remaining as he had taken more than his allotted leave for the holiday year. I find that this was not correct based on the holiday he had in fact taken.[24]On 19 June 2024 the claimant was contacted by the respondent forwarding an email from a company that he had placed a candidate with (page 58 of the claimant’s file). That candidate had not stayed for the requisite initial period and therefore a 50% rebate was due to the hiring company by the respondent. The claimant accepted in evidence that whilst his contract did not spell out the rebate policy and whilst he said he did not receive a copy of the commission policy, that generally he accepted that in such circumstances the respondent would be entitled to recover the relevant percentage rebate from his commission in proportion to what was recoverable by the company.[25]Whilst the figures were not set out in the email from the respondent to the claimant, sufficient information was provided for the claimant to understand what the rebate on his commission would be based on his own knowledge of the scheme: it was £900 (25% of £3,600).[26]This email again referred to this being reflected in his final payslip and therefore it was clearly still envisaged to pay him at this stage for his notice period. I find that at this point he was still in that notice period and still employed, notwithstanding that his email account had been shut down. In effect, he was on garden leave.[27]At some point between then and the date his pay was due the respondent decided not to pay him. The respondent's position is that this is because his handover was inadequate. Apparently the claimant refused to provide some information to David Grattage at the respondent, which the claimant denies. Mr Grattage did not give evidence and there is no documentary evidence showing this. In any event, by this stage his email had been shut down by the respondent which shows that he was not expected to be working as normal. In addition, given that he was supposed to receive full pay for his notice period, for that to cease being due I would have expected either a clear documentary record setting out what work was required of him, or a separate dismissal for gross misconduct during his notice period. There was neither.[28]On 1 July 2024 the claimant emailed Miss Cook setting out what he referred to as a formal grievance regarding the non payment of his final salary and holiday pay (page 60 of the claimant’s file). The respondent did not reply to 8 this grievance: the respondent says that is because it considered that the information the claimant had requested was provided to him in other ways (as he had already been told that he was not due any holiday pay and because the payroll provider has sent him his payslip and P45 separately). However, given the points raised by the claimant and in particular the fact that he had not been advised exactly why he was suddenly not being paid his notice pay, I do consider that the respondent should have done so.Law
[29]Section 13(1) of the Employment Rights Act 1996 provides that: (1) An employer shall not make a deduction from wages of a worker employed by him unless – (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract; or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction.”[30]Section 27 of the ERA details what amounts to wages: this includes both salary and holiday pay.[31]Workers are entitled to a minimum of 5.6 weeks’ leave in each leave year under Regulations 13 and 13A of the Working Time Regulations 1998 (“WTR”). During the first year of employment, this accrues on a pro rata basis (Regulation 15A, WTR). Where a worker’s employment ends during the leave year, a payment in lieu of any accrued but untaken statutory leave must be made (Regulation 14, WTR). Conclusions Notice period (2) I conclude that the claimant was entitled to payment in respect of his notice period. When he was advised of his dismissal verbally, he was told that he would be paid in respect of his notice period and he was expected to work during that period on a handover (albeit not carrying out his full normal duties). Even after his email access had been switched off, there was no communication with him to indicate that he should not expect to be paid, nor was there any bringing forward of his termination date or conduct procedure in relation to his alleged non-cooperation during that period. The email of 6 June 2024 referred to formal notice of termination, which indicates the respondent’s view that he was serving his notice period. He was entitled to one month’s notice and the date of termination of his employment was therefore 28 June 2024. He was entitled to be paid up to that date. (3) I also however conclude that the respondent was entitled to make a deduction from that notice pay under the terms of the claimant’s contract of employment in respect of commission rebate, in the sum of £900. (4) Based on his salary of £42,500 per annum, his monthly pay was £3,541.67 and his daily pay, based on there being 260 working days in each year, was 9 £163.46 (42,500 / 260). The claimant received payment in full for May 2024 and therefore received pay in respect of the first two days of that notice period (30 and 31 May). Therefore, the notice pay outstanding amounted to his monthly salary, less two days’ pay - £3,541.67 – (2 x £163.46) = £3,214.75. From that sum the commission rebate of £900 is deducted, leaving a total gross sum owed of £2,314.75. Holiday (5) As the claimant was employed for the entirety of the working days in June 2024 (28 June 2024 being a Friday), he had accrued 15 days’ annual leave in total (half of the full year). Whilst the claimant did not attend work after 29 May 2024, the respondent did not give any formal notification that any dates after that date were to be taken as annual leave and so they cannot be deducted from his entitlement, however they did count towards his notice period as set out above. (6) As explained above, the claimant had taken 10 days’ annual leave as at the termination date. As he had accrued 15 days’ annual leave by the termination date, a payment in respect of 5 days’ outstanding annual leave was due to him. Based on the daily rate of pay of £163.46, this amounts to £817.30 gross (£163.46 x 5). ACAS Code (7) I do not award any increase to the compensation in respect of any failure to follow the ACAS Code. Whilst I have indicated that the respondent should have responded to the claimant’s grievance, I also take into account that by that point employment had ended and the respondent is a small employer with no HR function. Conclusion on payments due (8) Therefore, I award £3,132.05 gross to the claimant (£2,314.75 + £817.30). These are gross amounts and the respondent is entitled to deduct tax and national insurance from the sums due. Approved by: