Mr G Walczynski v Mrs N Gwynne T/a The Hafod Hotel: 6025132/2025
EMPLOYMENT TRIBUNALS
Case No 6025132/2025
Between
Mr G WalczynskiClaimantMrs N Gwynne T/a The Hafod HotelRespondent
Before
Employment Judge OthenIn person for claimantIn person for respondentDate 12 February 2026
JUDGMENT
[1]The claimant was unfairly dismissed by the respondent.[2]The claimant contributed to his dismissal to the extent of 20%, to be applied to the basic and compensatory award for unfair dismissal.[3]The claimant's compensatory award for unfair dismissal should be increased by 15% to reflect the respondent's unreasonable failure to follow the Acas Code of Practice on Disciplinary and Grievance Procedures.[4]The claimant’s complaint of wrongful dismissal is well-founded and is upheld.[5]The respondent made an unlawful deduction from wages by failing to pay the claimant in lieu of accrued but untaken holiday due on termination of employment.[6]The claimant's claim of unlawful deduction from wages regarding the deduction of £500 made to his wages on or around July 2025 is not upheld and is dismissed.[7]The Tribunal will decide the remedy for the above claims at a further hearing to be notified to the parties.
REASONS
[8]The claimant brings a claim of unfair dismissal within section 98 of the Employment Rights Act 1996. He also claims wrongful dismissal and unlawful deductions from wages, both in respect of accrued but untaken holidays and for a specific sum of £500 which was deducted from his final wages[9]The respondent contests the claim. She says that the claimant was employed from 1 February 2024 to his effective date of termination of 14 May 2025 and as such, had insufficient continuity of service to be eligible to bring a claim of unfair dismissal. In any event, she asserts that he was fairly dismissed for misconduct. She denies that the claimant is owed any outstanding holiday pay and asserts that the £500 which was deducted from his final wages was for a sum owed to her, by him. Issues for the Tribunal to decide.[10]As both parties were unrepresented, and given the lack of any previous case management hearing, some time was taken by me to discuss and agree the relevant issues for this hearing. Those issues are as set out in Annex 2 to this judgment. I decided that, given the length of hearing allocated, the issues and the evidence to be heard, there would be insufficient time to hear and consider evidence on remedy, save for those issues expressly stated. Evidence heard[11]The claimant represented herself and called sworn evidence from Nicole McCallum (Front of House Supervisor/Manager), Joey Finnigan (Head Chef) and Callum Finnigan (Front of House Host). The claimant also represented himself and gave sworn evidence. I considered the documents from three separate, unpaginated bundles of documents comprising approximately 350 pages in total which the parties introduced in evidence.[12]There was sufficient time to hear all the evidence in the case but, as the hearing concluded before the parties had time to make submissions, the hearing was adjourned and the parties were ordered to provide such submissions in writing by 16 January 2026. Problems with evidence and related issues.[13]The documents were not easy to navigate as they were unpaginated, were not placed in chronological order and contained duplications.[14]It emerged that there had been numerous breaches of the case management orders by the respondent. Full disclosure was ordered to have taken place on 16 October 2025 with witness statement exchange on 13 November 2025. During the course of witness evidence, it emerged that:14.1 some documentary evidence had been disclosed late by the respondent; and14.2 some documentary evidence has never been disclosed by the respondent, was not included in the bundle and was not available for the hearing; and14.3 although the claimant sent his witness statement to the respondent on time, the respondent's witness statements were sent to the claimant late.[15]In particular, the claimant did not receive the respondent's witness statements until 3 December 2025 (the day on which they were signed), a few days before the hearing. Much of the evidence contained in the witness statements of the witnesses called by the respondent was new evidence which he had not heard before. In addition, it emerged from questioning of those witnesses that there were various documents which should have been disclosed by the respondent which had not been. Further details are contained in the paragraphs below.[16]The effect of the breaches of these case management orders was that the claimant was put to a disadvantage in his ability to prepare for the hearing and to give evidence. The respondent had had access to his witness statement and was able to prepare the witness statements upon which she relied accordingly. It was difficult for the claimant to challenge or respond to the evidence relied on by these witnesses for this reason.[17]In addition, the respondent offered no explanation as to why various documents had not been disclosed and why witness statements had been prepared so late.[18]This undermined the respondent's credibility. The fact that I did not have access to a number of key, contemporaneous documents meant that I was unable to reliably determine the relevant facts. I have therefore taken these issues into account in my findings of fact below.
Findings of fact
[19]The relevant facts are as follows. Where I have had to resolve any conflict of evidence, I indicate how I have done so at the material point. References to page numbers are to the bundles of documents provided by the respondent (volume and page number). I have only made findings of fact in relation to those matters relevant to the issues to be determined. Where there were facts in dispute I have made findings on the balance of probabilities and informed by my assessment of the credibility and/or reliability of the evidence as set out above. I confirm that I have taken into account all the documentation and evidence before me and if something is not specifically mentioned that does not mean that I have not considered it as part of my deliberations. Work status and employment contract.[20]The respondent owns and runs two pubs/restaurants: the Hafod Hotel in Aberystwyth and the Cross Foxes Bar/Grill. She oversees the management of both businesses.[21]The claimant started working at the Hafod Hotel as a "Front of House Coordinator" on 26 March 2023. His main duties were to manage bookings, deal with customers, supervise other serving staff and assist with administrative tasks. His initial rate of pay was £12 per hour although this increased to £13.50 per hour from May 2023.[22]He did not receive a written contract. He was asked to submit invoices for all the work that he did and was paid on the basis of those invoices. The invoices were emailed by the claimant to the respondent. They were stated to be from "T&G limited". This did not represent a limited company but was the claimant himself. Each invoice included the number of hours worked, the hourly rate and the total amount due.[23]From 26 March 2023 until 31 January 2024, the respondent asserts that the claimant worked for her on a self-employed basis. The parties agree that during this period, the claimant was paid without deductions for any tax or national insurance contributions and did not receive holiday pay.[24]Twelve invoices appeared in the bundles although it was not clear whether these comprise all the invoices for the claimant's work during this period. They do not appear in chronological order and there was significant duplication. The claimant told me that he disclosed all invoices but does not know whether they were all included in the bundles prepared by the respondent.[25]The invoices were submitted by the claimant on a random basis and the days between them are completely inconsistent. By way of example, one period between two invoices (19 August 2023 to 2 September 2023) represents 14 days and another one (between 8 April 2023 and 24 May 2023) represents 45 days. The average daily hours worked in each invoice also varies: between approximately 3 and 9 ½ hours. The average daily hours worked over the course of the invoices (by totalling the average daily working hours per invoice and dividing by the number of invoices) amounts to approximately 5.34 hours.[26]The claimant says that he did not work for anyone else during this period. He says that during this time, the respondent exercised full control over his work, required attendance on specific days and required approval for holidays.[27]The respondent disputes this and says that during this time, the claimant determined his own availability and did not work when he did not want to. In addition, she says that he never requested any holiday pay and never claimed to be an employee.[28]The respondent asserts that the claimant started employment on 1 February 2024. Both parties agree that from that date, the claimant stopped invoicing the respondent for the hours and work that he did and instead, received his pay every month, at the end of each month, as evidenced by payslips. Deductions were made from his pay for tax and national insurance contributions, and other deductions such as "Pension".[29]Apart from how the claimant was paid, the parties vary in their evidence about the changes that were made to the claimant's work on 1 February 2024 and how these changes came about.[30]The claimant's evidence is that nothing changed about his work apart from being "placed on the payroll". He says that he was unaware that the respondent did not consider him to have been employed since March 2023, until he received the respondent's response to his claim for unfair dismissal in which it was asserted that he did not start employment until 1 February 2024 and did not have sufficient continuity of service.[31]The respondent asserts in her witness statement that he was offered the role as an employee and that "his signed contract appears" in the bundle.[32]A document entitled "Written Statement of Employment Particulars in accordance with the Employment Rights Act 1996" appears in the bundles purportedly for the claimant (volume 2 page 12). It has paragraphs regarding his commencement of employment, job title, place of work, remuneration, length of notice, garden leave, sick pay arrangements, lateness and absence conditions, safety procedures and disciplinary procedure. It is not signed or dated by the claimant.[33]The claimant says that he had never been shown this or any other contract until this contract was sent to him as part of the disclosure process in this employment tribunal litigation.[34]During evidence, I asked the respondent a series of questions about the claimant's work/employment status both before and after 1 February 2024. Those questions and her answers to them will appear in the paragraphs that follow.[35]The respondent said that she has always engaged self-employed staff because of the fluctuations in work demand. With regard to the claimant's commencement of employment from February 2024, she said that she "would have had a conversation" with him. When I asked what this conversation was about she answered that it would have been about "mutuality of obligation". When I asked her when this conversation took place she said that it "would have been some point in January 2024". She could not remember what she said. The claimant could remember no such conversation.[36]During cross-examination, she asserted that she had given the contract of employment to the claimant on 1 February 2024 but confirmed that she had no evidence of when the contract was created and did not have a signed copy.[37]I find on the balance of probabilities that the claimant was not provided with a copy of the written contract of employment dated 1 February 2024 at the time. There was no documentary evidence to this effect and the respondent's evidence regarding when and how it was given or sent to him was too vague to be credible.[38]With regard to availability, the respondent told me that before February, the claimant would confirm every week when he was available and that she would write the rota based on that availability week to week. He apparently lived in Swansea and he would come and stay and would go home again for any period when he was not working. If he did/could not work he wouldn't invoice and she wouldn't pay him. If there had been issues with his conduct or performance before February 2024, she would have ended his service contract. She didn't know if he had worked for anyone else before February.[39]During cross-examination, she asserted that it was only the claimant who had to confirm his availability, along with other "casual staff" and not staff on "permanent contracts".[40]During his evidence, on questioning by me, claimant explained that during the initial period of work for the respondent in 2023, he was required to confirm his availability via WhatsApp which all staff did. A rota was then drawn up either by the respondent or by another manager. From approximately 2024, although he could not be sure exactly when, all staff had access to an app called "Square" in which availability and rotas were communicated/displayed. He said that there was never a period at any time when he was not available for weeks or months, other than short periods when he took holidays. With regard to holidays, he would have to speak to the respondent, message her or speak to/message "Heather" (a previous manager until spring 2024). He could not take holidays without approval either before or after February.[41]During Callum Finnigan's evidence, I asked him whether he had always been employed and he confirmed that he had. I then asked him whether he worked regular hours to which he volunteered the information that his hours were "not based off availability". I found this answer a little odd as I had not asked him about availability or had use this word. During cross examination of him by the claimant, the claimant had asked him whether during his employment, he had asked Mr Finnigan when he could or couldn't work (in order to draw up rotas). Mr Finnigan answered that he'd "provide dates he definitely couldn't work". This was clarified by me as his evidence. When asked whether he agreed that confirming dates when he could not work amounted to confirming availability, he answered: "to an extent".[42]When the respondent was asked by me about any difference in hours worked by the claimant before and after 1 February 2024, she said that by being an employee, the claimant committed to working a minimum of 40 hours per week and that this was in the contract. When asked about the hours actually worked by the claimant, the respondent was unsure.[43]The bundles contained most of the claimant's payslips, except for April 2024. As with his invoices, the hours worked on those payslips varied significantly: the least being 100 hours in February 2024 and the most being more than 187 hours for July 2024. The average daily hours worked (calculated by dividing the hours worked by days in the relevant months) varies from 3.44 hours to approximately 7.5 hours per month.[44]The other evidence given regarding the claimant's work before and after February 2024 was as follows: a) I asked the respondent whether the claimant could have sent a substitute to work for him. She answered that he could but he would have to be experienced in hospitality. She confirmed that he had never send a substitute. The claimant confirmed this. b) Both parties agreed that before and after February 2024, the claimant had the same job title, did the same work and that there was no change in his duties or responsibilities. c) The claimant always wore his own clothes for work before and after February 2024. d) The claimant confirmed (unchallenged) that both before and after February 2024 there were no differences in his duties or how he was managed or integrated into the hotel's working structure. All front of house staff who worked there were apparently called hosts, supervisors or managers. He lived on site at the hotel unless he went home to Swansea. e) The claimant confirmed that he was line managed by Heather until approximately spring 2024 when she left. He reported to her as manager and she reported to the respondent. After this time, he was line managed by the respondent.[45]My findings on the disputed facts regarding the claimant's work/employment status before and after 1 February 2024 are as follows: a) I find that the claimant was required to confirm his availability and to be available for work both before and after the above date to the same extent. I accept his evidence that the requirements for communication about this was the same throughout the relevant period. This is corroborated by the evidence given by Callum Finnigan. b) I find that the claimant was under the same level of obligation to make himself available for work both before and after this date. This is consistent with the hours worked; the fact that he did not and could not work for anyone else (based on the sheer number of hours which he worked); and the obligations on the claimant to confirm availability. The practical reality was that the employer did provide the claimant with a similar or the same number of hours of work both before and after the above date, as shown by the invoices and payslips, whether or not she regarded herself as being under this obligation. c) I find that the control exerted over the claimant by the respondent both before and after the above dates was the same. This is based on the hours that he worked, the work that he did and how it was performed. d) I accept the claimant's evidence that he did not understand the significance of him being required to submit invoices to the respondent before 1 February 2024 as indicating that he was not employed and that he only realised this after receipt of the respondents response to this claim. I found his evidence on this to be credible and there was no evidence before me to the contrary. Bonus.[46]The payslips for January, February and March 2025 included an amount of £694.57 for a "bonus". There is no other documentary evidence regarding a bonus. The respondent's evidence was that she did discuss a performance bonus with the claimant but that no specific amounts or detail were discussed. The claimant's evidence was that he had a conversation with the respondent but could not remember the date of that conversation. He had been told that if he hit five target areas, he would receive £100 for each of these. When asked by me, he confirmed that the respondent did not say that payment of a specific amount would be paid to the claimant on a specific date in respect of any bonus other than the end of the month if targets were achieved. No further information or evidence regarding these targets was provided by either party.[47]I find that there was no clear, agreed terms about the claimant's entitlement to any bonus. Although he did receive the same payment for three months at the beginning of 2025 which was expressed to be for a bonus, both parties agree that there was no specific and detailed agreement about when and whether a bonus would be payable, any performance or other criteria on which it would be based, when it would be paid and how much it would amount to. Working time and breaks.[48]The respondent had a written "Clock in Clock out Policy" (volume 2, page 11) which required staff to clock in and out of working time using the Square App. It stated that: "All employees [sic] time record must show all hours worked and all unpaid breaks. All breaks-food, drink and cigarette breaks are unpaid…. All-time records will be monitored to ensure compliance with the policy. Any wilful attempt to claim falsified time may result in disciplinary action on the grounds of theft".[49]There was no evidence before me to suggest that it did not apply to all staff, or that it did not apply to the claimant before 1 February 2024.[50]The claimant could not remember seeing a written policy but was aware of the above requirements as a verbal policy; in other words, he confirmed that he was aware of the requirements to clock in and out at the starts and ends of shifts and to clock in and out for cigarette breaks.[51]The claimant's unchallenged evidence was that rest breaks were not scheduled during shifts. Staff were expected to take them during quiet times but that on his rest breaks, he would be frequently disturbed by customers and would therefore have to stop and re-start breaks to see to those customers. If he did so, he would not clock back in during the disturbance. As such, sometimes, when he took cigarette breaks, he did not clock out as he regarded this as having taken time back in lieu when he'd had previous rest breaks disturbed.[52]In approximately April 2024 (after Heather left), the claimant became a Front of House Manager and his hourly pay increased to £16.50.[53]In the summer of 2024, the respondent asserts that a staff member had complained about the claimant taking breaks and that she gave the claimant an "informal warning" about this. The claimant disputes this. There is no documentary evidence of this. This assertion was also discussed during the appeal hearing in which the respondent appeared to agree that the claimant had never been given any previous warnings (see paragraph 81 below). I find that, on the balance of probabilities, the respondent did not communicate anything to the claimant about taking rest breaks which could have reasonably have been understood as a warning. Holidays.[54]On 15 January 2025, the respondent sent an email to her external bookkeeper which appears at page 20 of volume 2. It comprises a table with the names of all staff members at the hotel, their holidays accrued until that point, holidays taken and holidays remaining. The respondent's evidence was that the annual leave year was from 1 April each year. It shows that the claimant had accrued 28 days, had taken 14 days and had 14 days left.[55]The claimant's payslips in the bundle sometimes included amounts of holiday pay; apparently on a random basis.[56]On or around 17 April 2025, the claimant took approximately two weeks holiday. He was not paid for this holiday.[57]When I specifically asked the claimant whether it was correct that he had taken 14 days holiday between 1 April 2024 and 15 January 2025, he was not sure but did not dispute this.[58]I accept that based on the best evidence available (the email referred to at paragraph 54) that the claimant did take 14 days' paid holiday between 1 April 2024 and 15 January 2025. Wages advance.[59]Between 16 and 17 April 2025, there was a WhatsApp exchange between the claimant and respondent. On 16 April 2025 the claimant wrote: "Hi love I forgot to ask Is there any chance of £500 so I can treat it my sister for her birthday please xx". The respondent replied shortly thereafter to say: "Hiya. Of course. Enjoy hols.xx". The next day, the claimant confirmed that he had arrived abroad, to which the respondent replied: "Fab. I'll bacs later today. Enjoy xx". In his evidence, the claimant confirmed that he knew that £500 that he had asked to borrow it was a loan/advance on his wages. Misconduct allegations.[60]The respondent's evidence is that sometime during the claimant's period of annual leave, she was approached by "several members of staff" who raised complaints about the claimant. In her witness statement, she said that these complaints concerned: "poor presence on the floor; being left unsupported during service; inconsistent management decisions; and an intimidating management style". Her evidence was that staff did not complain about these issues before as they felt unable to do so while the claimant was working.[61]The claimant returned to work at the beginning of May 2025. The respondent's evidence is that she then personally monitored CCTV footage of the claimant's work breaks which showed that he "repeatedly" took cigarette breaks without cover or clocking out.[62]At 10 AM on 14 May 2025, the respondent emailed the claimant with a letter inviting him to a disciplinary hearing (volume 3 page 100 and 106). The letter listed six allegations of alleged gross misconduct: a) "Neglect of Duty and Time Theft. b) Disrespectful Behaviour and Inappropriate Conduct. c) Failure To Lead and Support the Team. d) Favouritism and Unfair Treatment. e) Disregard for Prior Warnings. f) Standards Expected of a Managerial Role."[63]Below each of the above subheadings was a short paragraph summarising the alleged complaints about the claimant, without any specific detail, save for the first allegation which alleged that on 2 May 2025, the claimant had taken a one hour lunch break and failed to clock out.[64]The letter invited him to a disciplinary hearing due to take place at 2 PM that day. It warned him that dismissal was a potential outcome. The letter was also sent the claimant by way of WhatsApp. Sent 20 minutes after the WhatsApp message, at 10:30 AM were three photos showing CCTV still images and a document entitled "Summary of the Feedback from Team" (volume 2 page 36) (Summary Document). These items are further discussed in the paragraphs below. Disciplinary hearing.[65]A hearing took place at 2 PM that day with the respondent. The claimant was not offered the opportunity to be accompanied either in the invitation letter or at the hearing. At volume 2 page 17 of the bundle is a note prepared by the respondent which purports to be a summary of that meeting. It contains approximately 24 lines of narrative and contains little detail. The first subheading is entitled "Purpose of meeting" and under this, the specific allegations of misconduct are stated to be: "Specifically leaving the workstation without authorisation and taking an unauthorised cigarette break, constituting neglect of duties and breach of company rules". Later on, it records that staff had raised complaints about the claimant's conduct and management style.[66]Five or six still images from CCTV were shared with the claimant which feature at pages 5 to 10 of the bundle. They are all date stamped 1 May 2026 at approximately 18.32 to 18.38, six minutes apart. Three of them apparently show the respondent's bar/restaurant area and three of them appear to show the claimant going in or out of an exit door at the back, interior area of the respondent's premises. In addition, the Summary Document which was approximately 16 lines long contains five summarised allegations against the claimant which are printed in quotation marks. They are all anonymized. They are all general with no dates or other identifying details. Some examples include: ""Staff members consistently describe your approach as aggressive and undermining"". ""Multiple individuals described what they felt was targeting and unfair treatment"". ""One team member noted 'I've stopped asking questions because I'm made to feel stupid'".[67]The parties agree that the claimant did not have access to, nor was shown any CCTV footage and was not told who had made complaints about him. He was not told anything other than what was in the Summary Document. In cross examination, the claimant put to the respondent that the whole hearing last approximately 15 minutes and she did not disagree with this. She could not remember whether she told him of her decision to dismiss him at the meeting or afterwards. When she was asked by me if she was aware of the ACAS code of practice on disciplinary procedure, she confirmed that she was. Dismissal.[68]A letter dated the same day confirms the claimant's dismissal for gross misconduct which was based on: a) "Multiple and consistent complaints from staff regarding your conduct and management style. b) Substantiated reports of bullying, intimidation and inappropriate communication with team members. c) Confirmation via CCTV footage of behaviour not in keeping with the standards expected of a senior member of staff. d) A significant breakdown of trust between you and the wider team, impacting staff morale, retention and the reputation of the business" (volume 3 page 105).[69]At this employment tribunal hearing, the witnesses called by the respondent gave evidence about the alleged misconduct against the claimant. On 3 December 2025, the claimant received the respondent's witness statements and became aware of this evidence for the first time.[70]In summary, the content of all witness statements of all three witnesses are very similar. They complain, in general terms about the claimant's management, saying that he regularly took cigarette breaks without warning, was abrupt or critical towards staff, was inefficient, disorganised and a generally poor manager. Some of them give some examples of particular occasions of when he behaved in the above manner but none of the examples are dated. They all say that they preferred working without the claimant. Nicole McCallum took over the claimant's role after he was dismissed.[71]During cross-examination and following questions from me, it was established that: a) All three witnesses apparently, made notes of their complaints about the claimant and either gave them to the respondent or sent them to her by email, during the claimant's absence on holiday from 17 April 2025. These communications and documents have never been disclosed at any stage. b) Nicole McCallum admitted that she took smoking breaks with the claimant but felt that he took smoking breaks far more often than anyone else and that this was not acceptable given his role as manager. When asked to give a specific example of belittling behaviour towards another staff member, she gave an example of him laughing at a particular member of staff when he had filled up salt pots incorrectly. When asked for specific examples of bullying and intimidation, she cited general undue criticism of staff. c) Callum Finnigan admitted to taking smoking breaks at work for which he was not disciplined and agreed that everyone took smoking breaks without being disciplined but: "I'd see you as manager so I'd follow". When asked to give an example of aggressive conduct, he replied that he had seen the claimant laugh as a member of staff when he was being shouted at by the head chef but he did not report this to anyone at the time. Claimant's grievance.[72]On 15 May 2025, the claimant submitted a written grievance regarding his dismissal (volume 3 page 110). The grievance raised various issues about a flawed disciplinary process with insufficient notice of the disciplinary hearing, the fact that he had been denied his right to be accompanied at the hearing and breach of the ACAS Code of Practice. He also asked for disclosure of the evidence on which his alleged conduct had been based, amongst other documents but said that names could be redacted from any complaints or statements.[73]The respondent acknowledged receipt of this email on the same day (volume 3 page 164). She also asked him to vacate his staff accommodation by the end of the day.[74]The claimant chased a response from the respondent on 17 May 2025 and 19 May 2025 (volume 3 pages 107 and 109). On 23 May 2025, the respondent invited the claimant to a grievance hearing (volume 3 page 114 and 132). Correspondence regarding amounts owed.[75]On 1 June 2025, the respondent emailed the claimant to say that his final payslip did not include any payment for accrued but unused holiday or any inclusion of the "performance-related bonus that had been discussed during my employment" (volume 3 page 140). The claimant chased a response to this on 7 June 2025 and the respondent responded with clarification relating to the alleged performance-related bonus. It contains various details stating that the bonus scheme was discretionary and conditional, based on targets which he should attain and that as his performance fell short of those targets in the lead up to his dismissal he was entitled to no bonus. In addition, the respondent sent a further email that day, with a subject line: "Sub £500". It refers to the payment of £500 which was made to the claimant on 17 April 2025 which "was transferred as a gesture of goodwill to support your planned holiday." It confirms that this payment was not part of the claimant's contractual pay, was not deducted from his wages at the time and would be deducted from the claimant's final pay (volume 3 page 146).[76]The claimant replied, again on the same day of 7 June 2025. His email is lengthy but in summary, disputes that the £500 payment was made as a goodwill gesture and states, amongst other things, that he had understood it to be part of his April bonus (volume 3 page 147). This was followed shortly thereafter by another reply by the respondent which reiterated that the £500 payment was made as a wages advance and that this would be deducted from any final payment due to the claimant (volume 3 page 151). Finally, on 1 July 2025, the respondent wrote to the claimant to confirm that he was owed £457.05 holiday pay amounting to 27.7 hours which she had calculated according to the HMRC annual leave calculator. She said that as he owed her £500, she had offset this against the holiday pay owed (volume 3 page 155).[77]On pages 156 and 158 of volume 3 are further exchanges between the claimant and respondent on 1 July 2025. These confirm the claimant's position as follows: a) that he believed the annual leave year which was relevant to his employment was from 1 February to 31 January and that he had based this on a WhatsApp message received from the respondent's bookkeeper, a screenshot of which he attached to his email; and b) that he was owed eight days holiday pay amounting to £1056; and c) that the respondent had no contractual right to deduct £500 from his final wages payment.[78]The respondent's position was that the annual leave year had always run from 1 April each year, that the claimant had taken his remaining 14 days holiday which was owed from 15 January 2025 to 1 April 2025, that he was therefore only owed his accrued entitlement from 1 April 2025 to his termination date of 14 May 2025 and that she required no consent to recover the £500 which was owed to her, as this was not a deduction from wages.[79]On questioning from me, the claimant did not disagree that he had taken his remaining 14 days holiday which the respondent asserts he was owed from 15 January 2025 to 1 April 2025.[80]I therefore accept the respondent's evidence that by 1 April 2025, the claimant had taken all the holidays to which he would have been entitled based on an annual leave entitlement of 28 days between 1 April 2024 to 2025. Grievance hearing.[81]A grievance hearing took place on 11 June 2025. The claimant attended with a friend. The meeting was recorded by the claimant with the permission of the respondent. A transcript of that recording was at pages 184-209 of volume 3. The respondent's note of that hearing was at page 23-25 volume 2. The latter comprises a very brief summary of the various issues which we discussed according to the transcript. The transcript, in general, shows that the claimant raised a series of issues which are consistent with the issues about fairness raised by him as part of this Tribunal claim. The respondent was noted as saying on a number of occasions that she would only consider and respond to the issues raised in the claimant's written grievance email. The only additional point of note is that on page 200 (the transcript) the respondent is noted as confirming that the claimant had received no previous warnings regarding unauthorised breaks. He was not provided with any other documents or evidence from the investigation or disciplinary process.[82]On 12 June 2025, the respondent sent to the claimant a grievance outcome letter which records the points which she considered being: a) a failure to provide him with an employment contract and policies. b) A lack of induction training and management support. c) An unfair disciplinary process and dismissal.[83]None of the above points were decided in the claimant's favour. Relevant law and conclusions – Employment/Worker status and continuous employment. 82. Section 230 Employment Rights Act 1996 ("ERA") provides:(1) In this Act "employee" means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.(2) In this Act "contract of employment" means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.(3) In this Act "worker" (except in the phrases "shop worker" and "betting worker") means an individual who has entered into or works under (or, where the employment has ceased, worked under)- (a) a contract of employment, or (b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker’s contract shall be construed accordingly.(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.(5) In this Act “employment”— (a) in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and (b) in relation to a worker, means employment under his contract; and “employed” shall be construed accordingly. 83. The Supreme Court has considered the above definitions of an employee and worker in a series of notable cases, including Pimlico Plumbers Ltd v Smith [2018] IRLR 872 and Uber BV and others v Aslam and others [2021] IRLR 407).[84]In determining whether the claimant is a worker, the classic starting point is the test set out in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497:[85]"A contract of service exists if these three conditions are fulfilled (i) The servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to that other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service..."[86]In Express & Echo Publications Ltd v Tanton [1999] IRLR 367, the Court of Appeal held that:(1) the tribunal should establish what the terms were of the agreement between the parties, and that is a question of fact;(2) the tribunal should then consider whether any of the terms of the contract were inherently inconsistent with the existence of a contract of employment,(3) if there are no such inherently inconsistent terms, the tribunal should determine whether the contract is a contract of service or for services, having regard to all the terms. Contracts of employment[87]It is impossible to set out a definitive set of criteria for what constitutes an employee, and the authorities advise against a checklist approach. A determination should be made on the accumulation of relevant detail. However, the case law suggests that determination of the issue is likely to focus on various indicia of employment, the presence or absence of which individually is unlikely to be determinative:87.1 Was there mutuality of obligation in that the employer was obliged to provide work and the worker to do it?87.2 Was the worker given an unfettered right to send a substitute to perform the work?87.3 What degree of ultimate control did the employer hold over the worker (it being recognised that skilled workers often hold a large degree of autonomy in how they actually perform the tasks)?87.4 To what extent was the worker integrated into the business?87.5 What was the remuneration and how was it paid?87.6 Did the worker invest in his or her future and, did they share in the opportunity for profit and loss?87.7 Did the worker supply their own tools or equipment?87.8 How did the parties categorise their relationship?87.9 Was the worker tied to one employer?87.10 What was the traditional structure of the industry?87.11 What was the tax and national insurance situation?87.12 How was the arrangement terminable?[88]The irreducible minimum for a contract of employment is:88.1 Control;88.2 Personal performance; and88.3 Mutuality of obligation. Worker contract[89]In Uber the Supreme Court held:89.1 Whether a contract is a "worker's contract" within the meaning of legislation designed to protect workers is a statutory question rather than a contractual one.89.2 The task for the tribunal is to determine whether the claimant falls within the definition of the worker so as to qualify for the rights irrespective of what had been contractually agreed.89.3 The true agreement between the parties would have to be gleaned from all the circumstances of the case, of which the written agreement is just a part. That did not, however, mean the terms of a written agreement should be ignored.89.4 Any terms which purports to classify the party's legal relationship to exclude or limit statutory protections by preventing the contract from being interpreted as a contract of employment are of no effect and have to be disregarded.89.5 There is no substitute for applying the words of the statute to the facts of the individual case.89.6 In applying the statutory language, it is necessary to view the facts realistically and to keep in mind the purpose of the legislation, which includes protection of vulnerable workers from being paid too little, required to work excessive hours or otherwise being treated unfairly.89.7 The greater the extent of control of the worker the stronger case for classifying the individual as a worker employed under a worker's contract. Contractual Terms.[90]An employment contract need not be in writing and may be express or implied, so there is no strict requirement for a contract to be signed.[91]If an employer provides a new employment contract to an employee and they do not sign and return it, the burden will be on the employer to show an "unequivocal act implying acceptance" (Khatri v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2010] IRLR 715. The test of whether the employee has impliedly accepted the change in terms is an objective, rather than a subjective one, and depends on the employee's conduct rather than their intentions. In Solectron Scotland Ltd v Roper [2004] IRLR 4, the then President of the EAT, Elias J stated:[92]"The fundamental question is this: is the employee's conduct, by continuing to work, only referable to his having accepted the new terms imposed by the employer? ...sometimes the alleged variation does not require any response from the employee at all. In such a case if the employee does nothing, his conduct is entirely consistent with the original contract continuing: it is not only referable to his having accepted the new terms. Accordingly, he cannot be taken to have accepted the variation in conduct." Contractual certainty: Bonuses.[93]For a contractual promise to be enforceable, it must be sufficiently certain. In Foley v Classique Coaches Ltd [1934] 2 KB 1 Maugham LJ stated that "unless all the material terms of a contract are agreed, there is no binding obligation". In practice, this will mean that terms must be:93.1 complete, that is, not lacking in some essential term;93.2 not otherwise uncertain, for example, vague or ambiguous.[94]If an agreement is incomplete or otherwise uncertain, a court may not be able to enforce it, despite the court being willing to honour an apparent intention of the parties to enter into legal relations.[95]In determining whether the parties have reached agreement on all essential terms, the governing criterion is whether an honest and reasonable businessman would have concluded from the parties' communications and conduct that they had agreed all the terms they considered to be a precondition to creating legal relations.[96]Applying this test in the cases such as Gupta v DB Group Services Ltd [2024] EWHC 2297 (KB), the High Court held that oral assurances regarding bonuses given to Ms Gupta by Deutsche Bank Group (the Bank) were insufficient to amount to legal relations. Conclusions.[97]Work/employment status.[98]I conclude that the claimant was employed and was a worker, throughout the entire duration of his working relationship with the respondent, from 26 March 2023 until his effective date of termination.[99]I have based this conclusion on my findings of fact from paragraphs 22 to 45 above and consider that these facts are consistent with:99.1 sufficient mutuality of obligation throughout the entire period.99.2 A requirement for personal service.99.3 The fact that the respondent -controlled what and how the claimant's work was done in a consistent manner throughout the entire period.99.4 The fact that the claimant worked for nobody else throughout the entire period and would not have been able to do so considering the hours which he was working for the respondent.99.5 The fact that the claimant worked for the respondent on an ongoing basis, with no defined ending (until his termination of employment).99.6 The fact that he was paid on an hourly rate and that is rate did not vary after 1 February 2024 until his promotion.99.7 The claimant was fully integrated into the respondent's business throughout the entire period, staying at the respondent's accommodation and performed work which was substantially the same as those performed by other employees at the same time. He wore the same clothes, had the same job description (which changed according to promotion) and used the respondent's equipment. He was subject to the same "Clock in/Clock out" policy, which was expressed to apply to employees.99.8 Although the claimant was required to submit invoices and no tax or national insurance contributions were deducted from his earnings, this was consistent with no other features which suggested a genuine relationship of self-employment.99.9 Although the claimant was not paid for his holidays before 1 February 2024, he was also not consistently paid for holidays after this date either. He took two weeks holiday in April 2025, for example, for which he was not paid99.10 there was no written contract of employment throughout the relevant period. Even if the contract dated 1 February 2024 was shown to the claimant on or around that date, the respondent has not discharged the burden of proof to demonstrate an "unequivocal act implying acceptance". Given the terms of that contract, his continued work for the respondent after this date was: "entirely consistent with the original contract continuing: it is not only referable to his having accepted the new terms. Accordingly, he cannot be taken to have accepted the variation in conduct"1.99.11 I therefore conclude that, the claimant was an employee (and worker) of the respondent within the meaning of section 230 of the Employment Rights Act 1996 from 23 March 2023 to his effective date of termination on 14 May 2025 , that he had been employed for at least two years by that date and was therefore eligible to bring a claim of unfair dismissal.99.12 With regard to the bonus, I do not find, in accordance with the requirements set out in paragraphs 93 to 95 above, that there was sufficient contractual certainty to conclude that the claimant had an agreed entitlement to a bonus payment at any stage. This conclusion is based on the finding in paragraph 47 above. Relevant law and conclusions– unfair dismissal[100]Section 94 of the Employment Rights Act 1996 confers on employees the right not to be unfairly dismissed. Enforcement of the right is by way of complaint to the Tribunal under section 111. The employee must show that she was dismissed by the respondent under section 95, but in this case the respondent admits that she dismissed the claimant (within section 95(1)(a) of the 1996 Act) on 4 March 2019.[101]Section 98 of the 1996 Act deals with the fairness of dismissals. There are two stages within section 98. First, the employer must show that it had a potentially fair reason for the dismissal within section 98(2). Second, if the respondent shows that it had a potentially fair reason for the dismissal, the Tribunal must consider, without there being any burden of proof on either party, whether the respondent acted fairly or unfairly in dismissing for that reason.[102]In this case it is not in disputed that the respondent dismissed the claimant because of conduct. The respondent has satisfied the requirements of section 98(2).[103]Section 98(4) then deals with fairness generally and provides that the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend 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 shall be determined in accordance with equity and the substantial merits of the case.[104]In misconduct dismissals, there is well-established guidance for Tribunals on fairness within section 98(4) in the decisions in Burchell 1978 IRLR 379 and Post Office v Foley 2000 IRLR 827. The Tribunal must decide whether the employer had a genuine belief in the employee’s guilt. Then the Tribunal must decide whether the employer held such genuine belief on reasonable grounds and after carrying out a reasonable investigation. In all aspects of the case, including the investigation, the grounds for belief, the penalty imposed, and the procedure followed, in deciding whether the employer acted reasonably or unreasonably within section 98(4), the Tribunal must decide whether the employer acted within the band or range of reasonable responses open to an employer in the circumstances. It is immaterial how the Tribunal would have handled the events or what decision it would have made, and the Tribunal must not substitute its view for that of the reasonable employer (Iceland Frozen Foods 1 Solectron Scotland Ltd v Roper [2004] IRLR 4 Limited v Jones 1982 IRLR 439, Sainsbury’s Supermarkets Limited v Hitt 2003 IRLR 23, and London Ambulance Service NHS Trust v Small 2009 IRLR 563). Genuine belief[105]I accept that the respondent had a genuine belief in the claimant's misconduct. There is no evidence that she had another reason for the claimant's dismissal. Was that belief reasonably held based on a reasonable investigation?105.1 I do not accept that this belief was reasonably held, nor was it based on a reasonable investigation. My reasons for this conclusion are, in no particular order:105.2 it is impossible to know how detailed the investigation was. All witnesses referred to other documents: WhatsApp notes etc which they had apparently made but these have never been disclosed. The respondent's witness statement refers to complaints from "several" staff members. No evidence has ever been disclosed of these several members of staff (save for the three witnesses in this employment tribunal claim) or the complaints that they made.105.3 No reasonable evidence was ever reasonably disclosed to the claimant, either before his dismissal or during the grievance process which would have reasonably allowed him to respond to the allegations put against him. There were no specific details disclosed with dates or other definable circumstances. The allegations put were very general. They effectively amounted to accusations which it would have been very difficult for him to 'disprove'. He denied the allegations which was all he could effectively do. No reason was offered as to why the allegations could not be more specific or the documentation anonymized.105.4 He was never shown any CCTV footage which gave him the reasonable opportunity to respond. He was shown a few photographs which were totally ambiguous in terms of what they demonstrated.105.5 He was not involved in the investigation at all.105.6 He was invited to a disciplinary hearing with a few hours' notice.105.7 He was not offered the right to be accompanied at the disciplinary hearing and no reference was made to any disciplinary policy or process.105.8 The disciplinary hearing lasted approximately 15 minutes. It appears that the respondent did not reasonably consider any evidence which could have rebutted the allegations and that her mind was made up about the alleged misconduct before the disciplinary hearing. It was not possible for her to reasonably know whether there could have been any other motives for the allegations made against the claimant because she did not reasonably investigate or give the claimant a chance to understand and respond to the allegations.105.9 The investigation, disciplinary process and grievance process were all managed solely by the respondent. Whilst this may have been unavoidable given the nature of her business as a sole trader, it meant that there was more scope for unfair bias to which she should have been reasonably been live. The grievance process which took place (which was effectively an appeal against dismissal) did not attempt to reasonably consider any of the alleged unfairness about the disciplinary process to which the claimant referred. For example, there was still no attempt to share any of the investigation evidence with him, even on an anonymized basis.105.10 There were numerous breaches of the ACAS code in the disciplinary investigation and procedure which was used. Was dismissal within the band of reasonable responses?[106]I have the band of reasonable responses clearly in mind in reaching my decision. It is immaterial what decision I would have made or what other employers may have decided.[107]On the evidence, I consider that dismissal was not within the band of reasonable responses. My reasons for this conclusion are, in no particular order:107.1 The claimant appears at least for some of the time, to work on long shifts and there was no evidence before me about the rest and other breaks which he was permitted to take.107.2 From the evidence, it appears that most staff took regular cigarette breaks.107.3 Because specific breaks were not allocated in an organised manner, breaks were disturbed by work. As such working time (for which employees should have been clocked in) and break time (during which they should have been clocked out) was not clear and defined.107.4 The claimant had a clean disciplinary record and had worked for the respondent for a significant number of hours over the preceding two years, consistently gaining promotion during that period.107.5 The respondent had clearly been happy with the claimant's performance and conduct up until May 2025. She had paid him three, significant amounts of money which were described as bonuses and which were performance -related. In addition, on 16/17 April 2025, she unquestioningly sent him a £500 advance on his wages, affectionately wishing him well on his holidays.107.6 When the claimant returned to work at the beginning of May 2025, after the respondent says that she had been presented with serious complaints from "several" staff members such that she was worried about staff retention, the claimant continued to work for 118 hours over at least 13 days before he was told anything about the alleged misconduct (by way of the disciplinary invitation letter). This is not consistent with a reasonable belief in misconduct warranting summary dismissal.107.7 Considering the disciplinary allegations for which the claimant was actually dismissed, they largely focus on the claimant's alleged taking of cigarette breaks. I consider that no reasonable employer would have regarded this as conduct which was so serious as to justify dismissal.107.8 The allegation that there were "substantiated reports of bullying and intimidation" is not supported by the evidence.107.9 The other allegations which amount to general allegations of poor performance are not sufficient, on the evidence, to amount to conduct so serious as to justify dismissal.[108]In summary, I find it no reasonable employer would have considered the claimant's behaviour as alleged to amount to gross misconduct justifying summary dismissal.[109]I find, therefore, that the claimant was unfairly dismissed by the respondent within section 98 of the Employment Rights Act 1996. Relevant law and conclusions – Contributory Fault[110]The Tribunal may reduce the basic or compensatory awards for culpable conduct in the slightly different circumstances set out in sections 122(2) and 123(6) of the Employment Rights Act 1996.[111]Section 122(2) provides as follows: “Where the Tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the Tribunal shall reduce or further reduce that amount accordingly.”[112]Section 123(6) then provides that: “Where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.”[113]It is difficult to form any fair or reasonable conclusions about the claimant's conduct because of the lack of credible contemporaneous evidence. The only evidence before me is the witness evidence of the respondent and her witnesses, along with some ambiguous CCTV images. I have in mind, for the reasons previously stated, that the claimant has been unable to reasonably understand and rebut this evidence. Having said that, the three witness statements of the witnesses called by the respondent were consistent in some respects: that they all considered that the claimant took too many cigarette breaks at inappropriate times, especially as he was a manager and in a position of responsibility and authority over other staff. I also have in mind that, as previously stated, the respondent appears to have been happy with the performance and conduct of the claimant before the disciplinary hearing itself. For this reason, I consider that the claimant's conduct did contribute to his dismissal and that as such, it would be just and equitable to reduce both the basic award and compensatory award in accordance with the statutory criteria stated above. This reduction should be both 20% to both awards. Relevant law and conclusions– Breach of ACAS Code[114]Employers considering dismissal for poor performance or misconduct are required to have regard to the Acas Code of Practice on Disciplinary and Grievance Procedures.[115]The Acas Code includes the following requirements:115.1 "If it is decided that there is a disciplinary case to answer, the employee should be notified of this in writing. This notification should contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting. It would normally be appropriate to provide copies of any written evidence, which may include any witness statements, with the notification."115.2 "The notification should also …advise the employee of their right to be accompanied at the meeting."115.3 "The meeting should be held without unreasonable delay whilst allowing the employee reasonable time to prepare their case."115.4 "At the meeting the employer should explain the complaint against the employee and go through the evidence that has been gathered. The employee should be allowed to set out their case and answer any allegations that have been made. The employee should also be given a reasonable opportunity to ask questions, present evidence and call relevant witnesses. They should also be given an opportunity to raise points about any information provided by witnesses."115.5 "Workers have a statutory right to be accompanied by a companion where the disciplinary meeting could result in:• a formal warning being issued; or• the taking of some other disciplinary action• the confirmation of a warning or some other disciplinary action (appeal hearings)115.6 The statutory right is to be accompanied by a fellow worker, a trade union representative, or an official employed by a trade union."[116]Where the employer (or employee) has failed to follow the Acas Code and the tribunal considers that the failure was unreasonable, it may increase (or reduce) the amount of compensation that would otherwise have been payable by no more than 25% if it considers it just and equitable to do so (section 207A, TULRCA 1992). In an unfair dismissal case, that means 25% of the compensatory award, not the basic award (section 124A, ERA 1996).[117]There were multiple breaches of the ACAS code by the respondent. The disciplinary invitation letter did not contain sufficient information about the alleged misconduct to enable the claimant to answer the case against him. No evidence was disclosed to him in the form of witness statements or similar. He was not advised of his right to be accompanied to the hearing. He was not given a reasonable time to prepare. The disciplinary hearing did not give a reasonable opportunity to present his case because there was no case that he could present other than denying the general allegations put.[118]The respondent was aware of the ACAS code. She offered no explanation as to why she did not comply with it and indeed, appears for the most part to consider that she did. On this basis, I am of the view that her failures were unreasonable and serious, although some procedure at least was followed, and that the compensatory award of the claimant should be increased by 15%. Relevant law and conclusions – Wrongful dismissal / Notice pay[119]Section 86 of the Employment Rights Act 1996 states as follows: "Rights of employer and employee to minimum notice. (1)The notice required to be given by an employer to terminate the contract of employment of a person who has been continuously employed for one month or more— (a)is not less than one week’s notice if his period of continuous employment is less than two years, (b)is not less than one week’s notice for each year of continuous employment if his period of continuous employment is two years or more but less than twelve years"[120]The claimant had no written contract of employment. The claimant was dismissed without notice. The respondent says that she was entitled to dismiss him without notice for gross misconduct.[121]I must decide if the claimant committed an act of gross misconduct entitling it to dismiss without notice. In distinction to the claimant’s claim of unfair dismissal, where the focus was on the reasonableness of management’s decisions, and it is immaterial what decision I would myself have made about the claimant’s conduct, I must decide for myself whether the claimant was guilty of conduct serious enough to entitle the respondent to terminate the employment without notice.[122]I set out my conclusions at paragraphs 107 and 108 above. They are equally applicable to the question whether the claimant was guilty of conduct entitling the respondent to dismiss without notice. I find that she was not, and the claimant was entitled to notice pay.[123]His complaint of breach of contract therefore succeeds. He was entitled to notice of two weeks as he had two years' continuous employment at his effective date of termination. Relevant law and conclusions– Holiday Pay (Working Time Regulations 1998) General[124]Article 7 of the Working Time Directive (WTD) provides that each member state must ensure that every worker is entitled to paid annual leave of at least four weeks[125]In England and Wales, workers have a right to a minimum of 5.6 weeks' paid annual leave under the Working Time Regulations 1998 (SI 1998/1833) (WTR)[126]The Working Time Regulations 1998 (WTR) provide for minimum periods of annual leave and for payment to be made in lieu of any leave accrued but not taken in the leave year in which the employment ends. The leave year begins on the start date of the claimant's employment in the first year and, in subsequent years, on the anniversary of the start of the claimant's employment, unless a written relevant agreement between the employee and employer provides for a different leave year (Reg 13(3) WTR).[127]WTR 1998 also give a worker the right to bring a claim:127.1.1 That the employer has prevented them exercising the right to take annual leave under regulation 13 or 13A (regulation 30(1)(a), WTR 1998).127.1.2 That the employer has failed to pay them for annual leave taken accordance with regulation 16 (regulation 30(1)(b))[128]A worker is entitled to be paid a week's pay for each week of leave. A week's pay is calculated in accordance with the provisions in sections 221-224 Employment Rights Act 1996, with some modifications. Save as set out from paragraph 42 below, for workers without normal working hours, a week's pay is calculated as an average of all remuneration earned in a 52-week reference period until the termination date (section 224, ERA 1996, read with regulations 14 and 16, WTR 1998). Remuneration would include any holiday pay, overtime payments, commission, bonuses and other allowances or payments, except genuine expense claims. Accrued leave.[129]In King v Sash Window Workshop Ltd and another (Case C-214/16) (King), the European Court of Justice held that the right under article 7(1) of the WTD is a is a "single right" to paid leave, although WTR defines it as two separate rights: the right to leave and the right to pay. If an employer refuses to grant paid leave, the court held that it must bear the consequences for this decision. It also held that a worker/employee is entitled to be paid on termination for any periods of annual leave that have accrued during employment if they have been discouraged from taking that leave because it would have been unpaid. It was not an effective remedy for the worker to have to take the leave and then take legal action to recover holiday pay. No limit was placed on the amount of leave that could be carried over in this type of case as this would amount to a validation of the employer's unlawful conduct.[130]In Kreuziger v Berlin (Case C-619/16) and Max-Planck-Gesellschaft zur Forderung der Wissenschaften eV v Shimizu (Case C-684/16), the ECJ went on to hold that national law cannot provide for the automatic loss of accrued but untaken annual leave entitlement unless the employer could show that it had given the worker an effective opportunity to take the paid leave to which they were entitled. Where it cannot do so, the right to accrued leave carries over from year to year and the worker is entitled to payment in lieu on termination.[131]King was considered, applied, and its effect extended in the Court of Appeal case of Smith v Pimlico Plumbers [2022] EWCA Civ 70 (Smith v Pimlico). Pay in lieu on termination.[132]Unless paragraphs 41 to 44 below apply, a worker can bring a claim that the employer has failed to pay them in lieu of untaken leave following termination of employment in accordance with regulation 14(2) (regulation 30(1)(b)).[133]On termination of employment, a worker is entitled to pay in lieu of unused statutory holiday (to which they were entitled to under regulations 13 and 13A, see 5.6 weeks' holiday each leave year). The amount paid will be: "Such sum as may be provided for … in a relevant agreement" (regulation 14(3)(a)) Where there is no relevant agreement, a sum equal to the amount that would be due to the worker under regulation 16 in respect of a period of leave determined in accordance with the formula (A x B) – C, where: A is the period of statutory leave to which the worker would have been entitled for the whole of the leave year in which employment ends, calculated in accordance with regulations 13 and 13A; B is the proportion of the worker's leave year which expired before the termination date, expressed as a fraction; and C is the period of leave taken by the worker between the start of the leave year and the termination date" (Regulation 14(3)(b).). 41. There will be an unauthorised deduction from wages if the employer fails to pay the claimant on termination of employment in lieu of any accrued but untaken leave. Irregular Hours Workers. 42. Regulation 15F(1)(a) WTR provides that "a worker is an irregular hours worker, in relation to a leave year, if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable;" 43. Regulation 15B WTR applies to leave years for "Irregular hours workers" beginning on or after 1 April 2024. It provides: "(2) The amount of annual leave to which an irregular hours worker, or a part-year worker, is entitled at any time during a leave year is the amount of annual leave that they have accrued in that year, plus the amount of annual leave (if any) that they have carried forward into that leave year, less the amount of annual leave (if any) that they have taken during that leave year. (3) In each leave year, an irregular hours worker, or a part-year worker, accrues annual leave—(a) during any period of sick leave or statutory leave, in accordance with regulation 15C, and(b) otherwise, on the last day of each pay period at the rate of 12.07% of the number of hours that they have worked during that pay period." 44. Regulation 15E further provides: "(2) Where— (a) the worker's employment is terminated during the course of their leave year, and (b) at the date on which the termination takes effect, the worker has not taken all the annual leave to which they are entitled under regulation 15B(2), the worker's employer must make the worker a payment in lieu of that untaken leave. (3) The payment due under paragraph (2) is— (a) such sum as may be provided for in a relevant agreement for the purposes of this regulation, or (b) where there are no provisions of a relevant agreement which apply, a sum equal to the amount that would be due under regulation 16 in respect of the untaken leave." Conclusions. 45. I have found that the claimant's employment started on 26 March 2023. His annual leave year therefore started on 26 March each year. 46. The respondent's case was that it started on 1 April each year (which is very similar). I have found that the Claimant had taken 28 days holiday between 1 April 2024 and 2025. 47. Applying regulations 13, 14 and the case of King above, the claimant would be entitled to pay into of untaken holidays accrued from 26 March 2023 until 1 February 2024, the date on which he started to take paid holidays or received pay in lieu thereof. 48. He would also be entitled to pay in lieu of any accrued but untaken holidays from 26 March 2025 and his effective date of termination of 14 May 2025 under the provisions of regulation 15 above as he would be regarded as an irregular hours worker. Whether he is owed any sums relating to this period remains to be quantified. Relevant law and conclusions– Unauthorised deductions from wages. 49. Section 13(1) of ERA provides that an employer shall not make a deduction from wages of a worker employed by him unless 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 the worker has previously signified in writing his agreement or consent to the making of the deduction. An employee has a right to complain to an Employment Tribunal of an unauthorised deduction from wages pursuant to Section 23 ERA. The definition of “wages” in section 27 ERA includes holiday pay. 50. There are a number of express cases when the unlawful deductions regime gives no protection from deductions. If a deduction falls within these exceptions it will be outside the scope of section 13 of the ERA 1996 and, accordingly, outside the employment tribunal's jurisdiction. 51. The specific exceptions are set out in section 14 of the ERA 1996 and include deductions made in order to reimburse the employer in respect of an overpayment of wages or an overpayment in relation to expenses incurred by the worker in carrying out their employment (section 14(1), ERA 1996). 52. The exception under section 14(1) allows an employer to make a deduction from a future payment of wages to a worker where the purpose is to recover an overpayment, without it being an unlawful deduction under section 13 of the ERA 1996. It applies regardless of the reason why the employer overpaid the worker. If the deduction falls within the exception, an employment tribunal does not have jurisdiction to hear any unlawful deduction from wages claim from the worker. Unlike with other deductions, there is no need for a contractual clause permitting the deduction, and no need for the worker's consent. 53. In Guildprime Specialists Contractors Ltd v Knight UKEAT/0562/11, the EAT held that deductions made from an employee's wages to cover a loan for the employee to purchase a car were authorised under the employment contract but, in the alternative, that the deductions were made in respect of an overpayment of wages, and so outside the scope of the unlawful deductions regime 54. The payment of £500 which was made to the claimant on or around 16/17 April 2025 was recognised by both parties as a loan or advance on his wages. I have found that the claimant had no contractual right to a bonus payment in June or July 2025 and therefore, the £500 payment did not represent any bonus payment which was due. In accordance with section 14(1) ERA and the authority of Guildprime as set out above, the deduction made to the claimant's wages of this amount in July 2025 is an exception which falls outside the scope of section 13 ERA and as such, the employment tribunal does not have jurisdiction to consider it. 55. The claimant's claim of unlawful deduction from wages regarding the deduction of £500 made to his wages on or around July 2025 is therefore not upheld and is dismissed. 56. The claimant's claim of unlawful deduction from wages regarding the respondent's failure to pay the claimant in lieu of accrued but untaken holiday on termination of employment is upheld. 57. Further evidence will be required to calculate the appropriate remedy, to include evidence regarding any final payments made to the claimant and appropriate deductions made. V.Othen Employment Judge Othen 12/02/26 20 February 2026 Miriam Drake FOR THE TRIBUNAL Annex 2 The Issues The issues the Tribunal will decide are set out below.
The Issues
[1]Employment status and continuous employment.1.1 Was the Claimant an employee of the Respondent within the meaning of section 230 of the Employment Rights Act 1996 from 23 March 2023 to his effective date of termination on 14 May 2025?1.2 Was the Claimant a worker of the Respondent within the meaning of section 230 of the Employment Rights Act 1996 from 23 March 2023 to his effective date of termination on 14 May 2025?1.3 Had the Claimant been employed by the Respondent for at least two years at his effective date of termination on 14 May 2025?[2]Unfair dismissal2.1 What was the reason or principal reason for dismissal? The Respondent says the reason was conduct. The Tribunal will need to decide whether the Respondent genuinely believed the Claimant had committed misconduct.2.2 If the reason was misconduct, did the Respondent act reasonably or unreasonably in all the circumstances, including the Respondent’s size and administrative resources, in treating that as a sufficient reason to dismiss the Claimant? The Tribunal’s determination whether the dismissal was fair or unfair must be in accordance with equity and the substantial merits of the case. It will usually decide, in particular, whether:2.2.1 there were reasonable grounds for that belief;2.2.2 at the time the belief was formed the Respondent had carried out a reasonable investigation;2.2.3 the Respondent otherwise acted in a procedurally fair manner;2.2.4 dismissal was within the range of reasonable responses.2.3 If the Claimant was unfairly dismissed, the Tribunal will also consider2.3.1 Did the ACAS Code of Practice on Disciplinary and Grievance Procedures apply?2.3.2 Did the Respondent or the Claimant unreasonably fail to comply with it?2.3.3 If so, is it just and equitable to increase or decrease any award payable to the Claimant? By what proportion, up to 25%?2.3.4 If the Claimant was unfairly dismissed, did they cause or contribute to dismissal by blameworthy conduct?2.3.5 Would it be just and equitable to reduce any basic award because of any conduct of the Claimant before the dismissal? If so, to what extent?[3]Wrongful dismissal / Notice pay3.1 What was the Claimant’s notice period?3.2 Was the Claimant paid for that notice period?3.3 If not, was the Claimant guilty of gross misconduct?[4]Holiday Pay (Working Time Regulations 1998) 4.1 Did the Respondent fail to pay the Claimant for annual leave the Claimant had accrued but not taken when their employment ended?[5]Unauthorised deductions 5.1 Did the Respondent make unauthorised deductions from the Claimant’s wages and if so, how much was deducted? The Claimant alleges that a sum of £500 was deducted unlawfully from his wages at the end of May 2025.