Employment Judge McCluskeyMr P Cambell for respondentPreston – Director for respondentDate 20 August 2025
JUDGMENT
[1]The claimant was unfairly constructively dismissed. The respondent shall pay the claimant the sum of FIFTY FIVE THOUSAND TWO HUNDRED AND TEN POUNDS AND NINETY FIVE PENCE (£55,210.95). The Employment Protection (Recoupment of Benefits) Regulations 1996 do not apply.[2]The respondent acted in breach of contract by not paying employer and employee pension contributions into the claimant’s pension schemes. The claimant is awarded the sum of FIVE HUNDRED AND THIRTY SIX POUNDS AND NINE PENCE (£536.09) as compensation for this breach of contract.[3]The claimant was not dismissed by reason of redundancy. The claim for payment of a statutory redundancy payment is not well-founded and is dismissed.
REASONS
[1]The claimant brings the following complaints against the respondent:a. Unfair constructive dismissal;b. Breach of contract;c. Payment of statutory redundancy pay[2]The claim form was served on the respondent on 4 April 2025. The notice of claim stated that the respondent was required to lodge a response by 2 May 2025. It did not do so. The respondent did not apply for an extension of time to submit its response. The notice of claim stated that if a response was not received by 2 May 2025, unless an extension of time was agreed by an Employment Judge, the respondent would not be entitled to defend the claim.[3]On 21 May 2025 an Employment Judge decided that a determination of the claim could not be made on the available material. A final hearing was listed to take place on 31 July 2025. The notice of hearing was sent to the claimant and the respondent. The notice stated that the respondent was entitled to notice of the hearing but would only be entitled to participate to the extent permitted by the Tribunal.[4]The claimant attended the hearing in person. Mr Peter Campbell-Preston attended as a representative of the respondent. He is a director of the respondent. It was explained to him that he would only be entitled to participate to the extent permitted by the Tribunal. He confirmed that he understood that. He confirmed that the respondent had received the notice of claim requiring the respondent to lodge a response by 2 May 2025 but had not done so. He gave no reason for this.[5]It was agreed that the Tribunal would hear the claimant’s evidence. Parties would then make submissions. Mr Campbell- Preston would have an opportunity to make submissions to the Tribunal in response to the claim and the claimant’s evidence.[6]The claimant had previously brought proceedings in the Tribunal including for unpaid wages and for breach of contract in relation to pension payments, for the period to 31 October 2024 (case number 4107134/2024) (first claim). A judgment under rule 21 of the Tribunal rules then in force, was issued to the claimant on 17 December 2024 for £24,001.76 gross for all payments up to 31 October 2024.[7]On 16 April 2025 the claimant presented a second claim to the Tribunal (case number 8000799/2025) (second claim). In her second claim she brought complaints of unfair constructive dismissal, breach of contract relating to pension payments and for payment of a statutory redundancy payment. The final hearing of that claim was held today.[8]The claimant lodged an electronic file of productions extending to 138 pages. The Tribunal explained that it would only read and consider documents to which it was taken during the claimant’s oral evidence. The claimant referred to various documents in the file during her evidence.[9]The claimant gave evidence on her own behalf. She did not call any other witnesses.[10]The issues to be determined were:a. Constructive dismissal: What was the most recent act (or omission) on the part of the respondent which the claimant says caused, or triggered her resignation? (ii) Has she affirmed the contract since that act? (iii) If not, was that act (or omission) by itself a repudiatory breach of contract? (iv) If not, was it nevertheless a part of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a repudiatory breach of the implied term of trust and confidence? (If it was, there is no need for any separate consideration of a possible previous affirmation, because the effect of the final act is to revive the right to resign.) (v) Did the claimant resign in response (or partly in response) to that breach?b. Breach of contract: Did the respondent act in breach of contract in relation to the non-payment of pension contributions which were not paid to the pension providers. Findings in fact[11]The Tribunal made the following essential findings in fact, necessary to determine the claim.[12]The claimant was employed by the respondent from 15 March 1996 until 16 January 2025, most recently in the role of Marketing and Operations Manager.[13]The claimant’s salary was paid monthly in arrears towards the end of each month. In June 2024 the claimant’s wages were paid three weeks late. In July 2024 the claimant was paid only part of her wages, which payment was late. In August and September 2024, the claimant received no wages. The claimant regularly asked Mr Campbell-Preston when she would be paid. She was given verbal assurances by him that she would be paid in full in a few days. This did not happen.[14]Many other employees also received no wages or only some of their wages during the same period. The claimant was a senior employee in the respondent’s business. She was being approached on a daily basis by other staff who were distressed as they had not been paid. She was unable to answer their questions. Certain suppliers were not being paid by the respondent. The claimant had to deal with these suppliers who were angry. The claimant found it increasingly difficult to manage her responsibilities. The claimant became unwell.[15]On 25 September 2024 the claimant submitted a fit note to the respondent. The respondent made no reply.[16]On 25 October 2024 the claimant submitted a fit note to the respondent for a further 3 months. The respondent made no reply.[17]On 5 November 2025 the claimant emailed the respondent and asked not to be contacted about operational work matters (as the respondent had been doing) whilst she was signed off sick. The respondent made no reply. The claimant did not say at any time that she did not wish to be contacted at all. The claimant did not say at any time that she did not wish to be contacted about welfare matters relating to her sickness absence.[18]On 5 November 2024 the claimant emailed the respondent to ask about unpaid wages from July 2024 onwards. The respondent made no reply.[19]In the same email on 5 November 2024 the claimant wrote “I would greatly appreciate any updates (in writing) on payroll matters, and more importantly, any reassurances of support for my well-being during this period of illness”. The respondent made no reply.[20]On 1 December 2024 the claimant emailed the respondent to ask about unpaid wages from July 2024 onwards. The respondent made no reply.[21]On 2 December 2024 the respondent made a partial payment of wages to the claimant. The claimant emailed asking for a breakdown of the sum as no wage slips had been provided. The claimant asked when the rest of her unpaid wages would be paid. The respondent made no reply.[22]On 19 December 2024 the respondent made a further payment of wages to her. The claimant did not have a breakdown of the sum as no wage slips had been provided. The respondent made no contact with the claimant.[23]During the first two weeks of January 2025 the respondent made no contact with the claimant. The respondent made no enquiry as to the claimant’s health and well-being as she remained off sick. The respondent gave no explanation of wages paid and any outstanding sums and did not provide payslips, as the claimant had requested. The respondent gave no assurances that future wages would be paid on time, as the claimant had requested. The claimant concluded that due to the lack of communication she was no longer part of the respondent’s plan for its business.[24]On 16 January 2025 the claimant submitted her letter of resignation. In her letter she wrote “My reason for resigning is as a direct result of issues around the non and late payment of my wages and your lack of support and communication whilst I was signed off due to work related stress”.[25]The claimant had a written contract of employment with the respondent signed by both parties in July 2001. The contract of employment included a clause on pension provision. The clause provided that the respondent operated a private pension scheme and a stakeholder pension scheme. The claimant was a member of both schemes. The private pension scheme was operated by Aviva. The stakeholder pension scheme, now called an auto enrolment pension scheme, was operated by Nest.[26]The respondent paid monthly employer pension contributions into the claimant’s Aviva and Nest pension schemes. The respondent made monthly deductions of employee pension contributions from the claimant’s wages which it paid into her Aviva and Nest pension schemes[27]From 1 November 2024 until 16 January 2025 the respondent did not make the employer’s pension contributions to Aviva or Nest as it was contractually required to do.[28]From 1 November 2024 until 16 January 2025 the respondent made monthly deductions of employee pension contributions from the claimant’s wages but did not pay these into her Aviva and Nest pension schemes as it was contractually required to do.[29]The total amount of contributions (employer and employee) which the respondent required to pay into the pension schemes in the period 1 November 2024 until 16 January 2025 was £536.09. It did not make these payments.[30]The claimant had 28 years of continuous service and was age 56 at the time her employment ended. Her net weekly remuneration with the respondent was £910.35. The claimant started a new job on 28 January 2025. Her net weekly remuneration in her new employment is £398.48.[31]The claimant was not in receipt of benefits when her employment with the respondent ended. Observations on the evidence[32]This judgment does not seek to address every point upon which the parties have disagreed. It only deals with the points which are relevant to the issues the Tribunal must consider, to decide if the claim succeeds or fails. If the Tribunal has not mentioned a particular point, it does not mean that we have overlooked it. It is simply because it is not relevant to the issues.[33]The standard of proof is on balance of probabilities. This means that if we consider that, on the evidence, the occurrence of an event was more likely than not, then we are satisfied that the event in fact occurred. Likewise, if we consider that, on the evidence, an event's occurrence was more likely not to have occurred, then we are satisfied that it did not occur.[34]The Tribunal found the claimant to be an honest and reliable witness. Her evidence was not challenged or contradicted by Mr Campbell Preston in his submissions including in relation to the sums sought by the claimant, except in relation to one matter. This was where he said that he had not contacted the claimant after 5 November 2024 as she had asked not to be contacted.[35]The claimant’s evidence which the Tribunal accepted was that on 5 November 2024 the claimant asked the respondent not to contact her about operational work matters (as it had been doing) whilst she was signed off sick. She had not said that she did not wish to be contacted at all. She had not said that she did not wish to be contacted about welfare matters relating to her sickness absence. The claimant’s email of 5 November 2024 included the following “I would greatly appreciate any updates (in writing) on payroll matters, and more importantly, any reassurances of support for my well-being during this period of illness”.
Relevant law
[36]The Tribunal was given the power to hear breach of contract claims by the Employment Tribunals Extension of Jurisdiction (Scotland) Order 1994 when the claimant’s employment has come to an end. That is the case here.[37]The right not to be unfairly dismissed is found in section 94 of the Employment Rights Act 1996 (“ERA”) – “(1) An employee has the right not to be unfairly dismissed by his employer.”[38]Section 95 ERA (circumstances in which an employee is dismissed) provides, so far as relevant to this case, as follows – “(1)….an employee is dismissed by his employer if…. (c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct.” This is commonly referred to as “constructive dismissal”.[39]The test of whether an employee is entitled to terminate their contract of employment without notice is a contractual one: has the employer acted in a way amounting to a repudiatory breach of the contract or shown an intention not to be bound by an essential term of the contract: (Western Excavating (ECC) Ltd v Sharp [1978] ICR 221).[40]There must be a breach of contract by the employer. This may be a breach of an express or implied term. “If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed.” (Western Excavating).[41]The breach may consist of a one-off act amounting to a repudiatory breach. Alternatively, there may be a continuing course of conduct extending over a period and culminating in a “last straw” which considered together amount to a repudiatory breach. The “last straw” need not of itself amount to a breach of contract but it must contribute something to the repudiatory breach. Whilst the last straw must not be entirely innocuous or utterly trivial it does not require of itself to be unreasonable or blameworthy (London Borough of Waltham Forest v Omilaju [2005] IRLR 35).[42]In Kaur v Leeds Teaching Hospitals NHS Trust [2018] EWCA Civ 978 the Court of Appeal listed five questions that it should be sufficient to ask in order to determine whether an employee was constructively dismissed(i) What was the most recent act (or omission) on the part of the employer which the employee says caused, or triggered, his or her resignation?(ii) Has he or she affirmed the contract since that act?(iii) If not, was that act (or omission) by itself a repudiatory breach of contract?(iv) If not, was it nevertheless a part (applying the approach explained in Waltham Forest v Omilaju [2004] EWCA Civ 1493) of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a repudiatory breach of the implied term of trust and confidence? (If it was, there is no need for any separate consideration of a possible previous affirmation, because the effect of the final act is to revive the right to resign.)(v) Did the employee resign in response (or partly in response) to that breach? Submissions[43]The claimant and Mr Campbell-Preston made oral submissions. The claimant summarised the oral evidence she had given. Mr Campbell-Preston said that the claimant had been a good employee. He had found the hearing today interesting. The only issue he took with what she had said was about not wanting to be contacted at all when she was off sick. The Tribunal has made a finding in fact about this and preferred the claimant’s evidence for the reasons given.[44]The Tribunal carefully considered the submissions of both parties. The Tribunal has dealt with the points made in submissions, where relevant, when setting out the facts, the law and the application of the law to those facts in reaching its decision. It should not be taken that a submission was not considered because it is not part of the discussion and decision recorded. Discussion and decision Unfair constructive dismissal[45]The Tribunal reminded itself of the terms of section 95(1)(c) ERA and the legal test for constructive dismissal as set out by Lord Denning in Western Excavating. There had to be a breach which goes to the root of the contract. It has to be sufficiently serious to entitle the claimant to resign immediately, regardless of whether she actually did so.[46]The claimant asserted that there was a breach of the implied duty of trust and confidence. She relied upon a number of acts by the respondent.[47]The most recent act or omission on the part of the respondent which the claimant says caused or triggered her resignation was the lack of contact in January 2025 about wages and assurances of wages being paid in time in the future and the lack of enquiry as to her health and well-being. The claimant’s evidence which the Tribunal accepted, was that because of the lack of contact about these matters, it became clear to her that she was no longer part of the plan for the respondent’s business.[48]The Tribunal was satisfied that the claimant has not affirmed the contract since that act or omission. The claimant resigned part way through January 2025.[49]The Tribunal was not satisfied that this act or omission by itself was a repudiatory breach of contract.[50]The Tribunal then considered whether it was nevertheless a part (applying the approach explained in Waltham Forest v Omilaju [2004] EWCA Civ 1493) of a course of conduct comprising several acts and omissions which, viewed cumulatively, amounted to a repudiatory breach of the implied term of trust and confidence. The Tribunal was satisfied that it was. The Tribunal reminded itself that the “last straw” need not of itself amount to a breach of contract but it must contribute something to the repudiatory breach. The Tribunal was satisfied that it did. The Tribunal was satisfied that the lack of communication from the respondent in January 2025 was part of a pattern which occurred in September, October, November and December 2024 when the claimant made enquiries about wages and sought assurances about when they would be paid and received no reply. It was also part of a pattern over the same period where the claimant received no enquiry from the respondent about her health and wellbeing despite being off sick for the period.[51]Lastly, the Tribunal considered whether the claimant resigned in response (or partly in response) to that breach. The Tribunal was satisfied that she did. The claimant’s resignation letter on 16 January 2025 made this clear when she wrote “My reason for resigning is as a direct result of issues around the non and late payment of my wages and your lack of support and communication whilst I was signed off due to work related stress”.[52]The respondent did not make any submissions to the effect that if the claimant was constructively dismissed, her dismissal was for a potentially fair reason and that it acted reasonably in dismissing the claimant. The Tribunal was satisfied that the claimant was unfairly constructively dismissed. Remedy – unfair constructive dismissal[53]The Tribunal went on to consider remedy. The respondent made no submissions about remedy.[54]The claimant had 28 years of continuous service and was age 56 at the time her employment ended. Her gross weekly salary was £1,163.63. Her basic award is 27.5 x £700 which totals £19,250.[55]The claimant’s net weekly earnings with the respondent, per her schedule of loss, was £910.35. The claimant started a new job on 28 January 2025. Her earnings in her new job are less than those with the respondent. The Tribunal accepted the claimant’s unchallenged evidence that due to her skill set, the geographical area in which she lives and her family ties to the local area, she was unable to find a job at the same salary and benefits level as those which she enjoyed with the respondent. The Tribunal accepted the claimant’s unchallenged evidence that she continues to look for work which pays a higher salary and benefits but she has been unable to find such work.[56]The claimant’s calculation of immediate past losses in her schedule of loss is £10,197.88 net. The claimant provided vouching for these sums. The Tribunal accepted this figure which was not challenged by the respondent.[57]The claimant in her schedule of loss seeks an award for future loss of earnings for a further period of 12 months. Although she has new job the salary and benefits are less valuable than in her employment with the respondent.[58]The Tribunal accepted the claimant’s unchallenged evidence that she continues to look for work which pays a higher salary and benefits but is unlikely to be able to find such work for the reasons already given.[59]The claimant’s calculation of future losses in her schedule of loss, for a period of 12 months, is £20,720.88 net. The claimant showed workings for this calculation. The Tribunal accepted this figure which was not challenged by the respondent.[60]The calculation of compensation for the claimant’s unfair constructive dismissal is as follows:a. Basic award = £19,250 (taxable). Compensatory award = £30,918.76 taxable (£10,197.88 + £20,720.88). Tax free element = £30,000.b. Compensation award exceeding the tax free element = £30,918.76 - (30,000 – 19,250) = £20,168.76.c. Grossed up compensation = £20,168.76 / 0.8 = £25,210.95.d. Total award = £19,250 (basic) + £10,750 (compensation up to tax free limit) + £25,210.95 (grossed up compensation) = £55,210.95. Breach of contract[61]The Tribunal found that the claimant had a written contract of employment with the respondent signed by both parties in July 2001. The contract of employment included a clause on pension provision. The clause provided that the respondent operated a private pension scheme and a stakeholder pension scheme. The claimant was a member of both schemes. The private pension scheme was operated by Aviva. The stakeholder pension scheme, now called an auto enrolment pension scheme, was operated by Nest.[62]The claimant’s unchallenged evidence was that from 1 November 2024 until 16 January 2025 the respondent did not make the employer’s pension contributions to Aviva or Nest as it was contractually required to do.[63]The claimant's unchallenged evidence was that from 1 November 2024 until 16 January 2025 the respondent made monthly deductions of employee pension contributions from the claimant’s wages but did not pay these into her Aviva and Nest pension schemes as it was contractually required to do.[64]The claimant’s unchallenged evidence, which the Tribunal accepted, was that the total amount of contributions (employer and employee) which the respondent was contractually required to pay into the pension schemes in the period 1 November 2024 until 16 January 2025 was £536.09. It did not make these payments. Accordingly, the claimant is entitled to the sum of £536.09 as damages for breach of contract.