Mr N Clunie v Newlands Community Development Trust: 8001733/2025
JUDGMENT
[1]The claimant’s claims of constructive unfair dismissal and unlawful deduction of wages succeed.[2]The claim for breach of contract is dismissed.[3]A remedy hearing for 1 day will be listed.REASONS
[1]At the beginning of the hearing the parties had some difficulty with the bundle. A joint bundle was produced by the respondent. The claimant provided a supplementary bundle with all the documents he said had been left out of the bundle by the respondent. It became clear that even with 2 bundles, there were a number of documents which were highly relevant, but had been omitted from the bundle by both parties. In particular, some Board minutes. When this matter was addressed, the respondent’s counsel was instructed to tell the Tribunal that there were no minutes of Board meetings. This was blatantly untrue, as some were in the bundle and some had been provided in redacted format in a DSAR to the claimant, after the issue of the ET1. The Tribunal were troubled by the lack of co-operation between the parties to prepare for the hearing and lack of frank provision of documents by the respondent, which could have assisted the Tribunal. However, the Tribunal has had to decide the case based on the documentary evidence provided by the parties and the oral evidence of the witnesses, Mr Clunie, Mr Rose, Mr Anderson and Mr Hall. This lack of documentation was taken into account and inferences made, where appropriate.[2]At the start of the hearing a List of Issues was agreed, as none had been identified previously. They were as follows;[1]Did the respondent breach the implied term of trust and confidence in the claimant’s contract by failing to make agreed salary increases, Did the claimant resign in response,[3]If so, did the claimant do so in good time,[4]Did the claimant waive any breach by continuing to work,[5]If the claimant was dismissed, was it for a potentially fair reason,[6]Should any deduction be made to any compensation to be paid to the claimant, on the grounds of Polkey (i.e that had a fair procedure been followed, the claimant would have been dismissed in any event),[7]Breach of Contract–failure to pay a bonus was the claimant entitled under his contract to a bonus,[8]Did the respondent fail to pay the bonus,[9]If so, how much was the claimant entitled to,[10]Has the respondent failed to pay the claimant wages which he was entitled to,[11]If so, how much. 3. The respondent raised a time bar argument at the start of the hearing in March 2026. Asserting that if the claimant claimed overtime before 2020, then the claim was both time barred and the whole claim was extinguished by the Prescription Limitation Act Scotland. This point was not the subject of any cross-examination questions to the claimant and was not pursued in closing submissions. It is assumed therefore that the respondent did not pursue this point. The Facts 4. The following findings of fact are relevant to the decision to be made by the Tribunal. Not all the facts which were presented by the parties are laid out here, as only those relevant to the decisions required by the List of Issues are set out here. 5. The claimant started work for the respondent on 1 September 2015 as a Development Manager. He signed a contract with the respondent agreeing to work 35 hours a week, in return for £22,000 per annum. His holiday year ran from 6 April to 5 April each year. This was a completed agreement between the parties. Although the Board did not have sight of the contract until the claimant produced a copy in December 2024. The administration was carried out by a volunteer company secretary and led to the record keeping being less than ideal. The contract was signed on behalf of the respondent and by the claimant. 6. The role included the development and running of the Newlands Centre, a community charity which included the sites of the Newlands Primary School and Newlands Kids nursery. The remainder of the space was hired out for various local events, group meetings and other commercial purposes. It was the claimant’s role to try to develop this other commercial use and to therefore assist the revenue of the charity. 7. Initially the claimant reported to the Board each month about the revenue and the use of the space. He also indicated to the Board where there were gaps in the usage which could be targeted in order to increase revenue. The claimant also set up a computer booking system in order to build professionalism in the centre. 8. In 2016 the then Chair Mr Fernand stated that he would take over making the report at the Board meeting, so that the claimant did not need to attend the meetings, thus shortening his hours slightly. 9. The claimant also worked as the physical gatekeeper of the centre being on site when events took place, to open up and close the centre and ensuring that stock was kept up to date. The claimant also undertook a marketing role, creating posters and emails to raise the profile of the centre. He introduced a new computer booking system, door access system and a utilisation plan. 10. The Board of the Newlands Trust was run by volunteers, all of whom were experienced local business people. 11. The terms of the claimant’s contract also stated that the claimant would receive an annual review and a discretionary bonus scheme would be agreed with him. Between 2015 and 2021 the claimant did not receive any annual review, nor was there any discussion of a pay rise. The claimant did not question this, as he was aware that the financial position of the respondent was not good and he was keen to ensure the respondent survived.The Facts
[12]A bonus scheme document was drawn up in 2015 (it talks of targets by January 2016) which talks of “part of the Centre Manager’s work efforts on promotion and securing of such business. We would also like to share some of the extra income generated with the Centre Manager as a performance related bonus as below”. The claimant was shown this document, but it was never formally agreed, or put in place.[13]The only bonus that the claimant was paid was in 2017 when a letter of thanks accompanied a £150 meal voucher in a local restaurant.[14]The claimant worked approximately 10-15 hours per week in excess of his 35 hours per week contract without any further remuneration until approximately March 2021. The claimant saw this as his contribution to the success of the centre. However, in March 2021 the claimant raised an issue with some of the directors about the position of the chairman, Mr Joseph Fernand. The claimant had a concern that Mr Fernand was being paid a salary by the respondent as a result of a grant from the Scottish Government and that such payment was contrary to the Articles of Association of the Centre. He was also concerned that Mr Fernand was taking some of the claimant’s work and passing it off to the board as his own. The claimant felt this detracted from the hard work he was doing.[15]He therefore decided to request that he should be paid for his time in excess of 35 hours per week. This was agreed by the Board, who told him to submit overtime forms, the claimant began to do so and was paid overtime. He was not however given support to try to limit his hours, or to improve efficiency to reduce his hours. He continued to report his activities to the Board each month, who were aware of his duties.[16]It was not until December 2021 that the Board began to notice that the claimant was undertaking a lot of overtime, which was then costing them substantial extra payments. They requested meetings with the claimant to discuss this cost, but the claimant said he was busy putting up Christmas lights and organising the New Year Ceilidh. On 20 December Mr Bowie emailed the claimant to say that his overtime would be paid on this occasion, but that the workload was clearly too much for him and another solution would need to be found.[17]In January 2022 Mr Bowie asked the claimant to outline his job. He indicated that a meeting would take place to discuss the level of work the claimant was doing, once the claimant had provided the information. The claimant failed to provide the information requested and so no further meeting took place.[18]Around the same time in January 2022 the claimant started to have weekly meetings at an operational level and to discuss what work he had been carrying out. This was named the Centre sub group. At a meeting of the sub group in March 2022, it was discussed between David Anderson, Gilbert Cameron and the claimant, that he should have a pay rise, to £32,000. In return the claimant offered/agreed to increase his hours to 40 per week. This was not paid to the claimant. The claimant believed that this was discussed at the Board meeting in March 2022. There are no notes of this.[19]At this time the claimant was still upset by the actions of Mr Fernand and told Mr Bowie that he was going to consider whether he would continue to work in his position. On 29 March 2022, the claimant confirmed that he would continue in his position.[20]In May 2022 an email from Gilbert Cameron shows that he was proposing that the Directors should discuss the fact that the claimant did not want to work evenings and weekends and that another member of staff should be recruited to cover those times. It was noted that a job description would be written at the weekly meetings.[21]A Board meeting took place on 14 June 2022 at which it was agreed at a General Meeting that Mr Cameron would make an offer to the claimant to revise his salary (to £32,000) in return for an increase of hours to 40 hours and once a second member of staff was hired, the claimant would stop claiming overtime. There was no resolution that this was conditional upon a job description being drafted or agreed.[22]On 21 September 2022 the Board also discussed the claimant’s pay. It was agreed that the Board was going to finalise a contract for 40 hours in return for £32,000 with no overtime. Until it was finalised by the Board, the claimant could continue to claim overtime. The claimant was sent the minutes of this Board meeting by Gilbert Cameron the following month. It was the claimant’s expectation that both parties would agree and sign the[23]The claimant admitted that by November 2022 he was asked to draw up a new job description, but due to the pressure of work, he never produced it. It seems that this job description became the sticking point for the new contract, but that this was not expressly told to the claimant.[24]By October/November 2022 it also became apparent that the claimant was earning a significant amount in overtime each month. He had not started to work 40 hours per week and he was not paid £32,000.[25]By 30 November 2022 it was agreed that Jenny Mallinson an HR professional who was being paid to advise the respondent, would produce the job description. The intention was for it to be completed by the end of the year.[26]Nothing came of this discussion in 2023 and all parties continued as they were. No further negotiation or mention of a pay increase, a bonus, or a review occurred in 2023.[27]In February 2023, an assistant to the claimant was recruited. She did not remain in the position for long and the claimant went back to undertaking the work himself, without assistance. At this time, he continued to claim overtime payments.[28]By 17 June 2024, the issue about the claimant’s pay and new contract remained unresolved. David Anderson had become the Chairman of the respondent and Neil Hall was a director. They were due to meet with the claimant, but Neil Hall forgot about the meeting. They met the next day where David Anderson made a verbal offer of £35,000. They discussed whether it would be backdated and it was agreed that it would be backdated to April 2024. When the claimant raised the issue of bonus, Neil Hall told the claimant to sort the salary out first. There was no clear acceptance of this offer by the claimant at the time.[29]On 19 August 2024 there was an email from Neil Hall to the claimant asking for the job description, but he believed that was being drafted by Jenny Mallinson. He therefore did not take steps to draft a job description himself.[30]On 16 December 2024 there was a Board meeting at which David Anderson said that Jenny Mallinson would be paid a retainer.[31]On 13 January 2025 the claimant wrote to the Board saying that he had had no pay increase since commencing in the role in 2015. He outlined that this matter had been presented to the Board in June 2022 but that nothing had happened. He asked them to implement what had been agreed verbally and to backdate it to April 2022. He asked for this to be done by the end of January 2025.[32]The claimant was told not to attend the Board meeting on 20 January 2025.[33]On 6 February 2025 the claimant wrote again to the Board to say he was disappointed not to have heard any outcome from them and asked for a reply by 17 February 2025.[34]On 11 February 2025, Mr Anderson replied on behalf of the Board to acknowledge the claimant’s letters and said they were “collecting the necessary information and guidance to present a proposal to you”. He said that this was “due to the lack of communication regarding the proposal that Neil Hall and I put to you in June 2024”. He said the directors would be meeting soon. He did not clarify what he meant by a lack of communication.[35]By 18 March 2025 the claimant was asking Mr Anderson for a face-to-face meeting as “there’s stuff I’d rather we discuss face to face before we run out of time. Hopefully tomorrow”. There was no mention from the respondent’s side that they were waiting for a job description to be drafted by the claimant.[36]The claimant and Mr Anderson met on 19 March and on 20 March, Mr Anderson wrote to say that he was taking the claimant’s request of a grievance seriously but it was out of his control to get advice from the HR company and so he will not have an answer until the following week.[37]The claimant made a grievance on 21 March 2025 for non-payment of wages since June 2022, when the promised increase was not made. He showed the respondent that various agreements had been reached with regard to salary, but that none had been honoured. He also noted that no bonus had been paid and no annual review undertaken.[38]After receiving this grievance Mr Anderson wrote to others on the Board to tell them that he would discuss it with HR on Monday. He then told them “On the bright side I have someone organised to cover the majority of his job on the day to day running of things if need be and Pac (sic) if need be. It (sic) something we may have to consider going forward is looking at advertising for new employee(s)”.[39]The claimant spoke to Neil Hall on 21 March 2025 who told him that there was money available, so he wasn’t sure what the delay was. The claimant told him that if he left, it would be disastrous for the respondent.[40]The claimant resigned on 25 March 2025 stating that there had been repeated breaches of the implied term of trust and confidence by way of the failure to provide the agreed pay rise. Mr Hall replied on 28 March saying that his final pay would be made and attached his P45.[41]On 26 March 2025 the claimant met with David Anderson and Jan McDonald for his grievance hearing. At the meeting Mr Anderson offered the claimant a pay rise to £32,000 from 1 April 2025 with overtime to be paid for weekend work. They discussed the issues of the bonus, annual leave and hours and the backpayment of these amounts. The meeting ended without agreement.[42]A Grievance outcome letter was sent to the claimant on 2 April 2025, which stated that the respondent agreed that it was unacceptable that there had been no salary increase since the start of the employment in 2015. Likewise with regard to an annual review. Most importantly it was accepted that no payment had been made following an agreement in June 2022, but it was suggested that overtime payments compensated for this. The letter said that the bonus was discretionary and the respondent could not afford to pay one. It also said that the claimant had failed to engage in trying to identify what takes up his time and why he works such long hours.[43]On 8 April 2025 the claimant appealed the points in his grievance and suggested that the process was flawed.[44]A Grievance appeal meeting was held on 27 May 2025 and chaired by Mr Rose. The claimant raised the issues which were contained in his appeal letter. An outcome letter was sent on 3 June 2025 which held that a correct process was followed. Although the letter says that Mr Anderson agreed to pay outstanding holiday pay, which was incorrect. It also held that the offer of £32,000 was all that was being made with regard to salary (not £35,000) and that no bonus scheme was agreed. The letter also says that this was subject to agreement to draft a job specification for the new role of an Assistant Manager. It says that there was misunderstanding and that the increase was not paid. The outcome letter apologises for this lapse and upgrades this complaint to ‘founded’.[45]The claimant wrote to the respondent on 8 July 2025 to correct some of the comments he considered were inaccurate in the outcome letter. The Law Law on ContractThe Law
[46]To be a concluded contract “all the essentials have to be settled. What are the essentials may vary according to the particular contract under consideration.” May & Butcher Ltd v R. (1929), noted at [1934] 2 K.B. 17 at 21.[47]An offer must be communicated to the offeree before it has legal effect. If a committee resolve a course of action, but this decision is not communicated to the offeree then no offer has been made. This is because there must be ‘consensus ad idem’ (agreement) which cannot occur if the offeree is not aware of the offer.[48]Acceptance of an offer may be inferred from conduct; see Budge v Donald 2002 SLT (ShCt) 18 and G. Percy Trentham Ltd v Archital Luxfer Ltd [1993] 1 Lloyd’s Rep. 25.[49]Whether the inference is justified is a matter of fact. If both parties act as though they are bound, then that completes the contract. An employee may accept terms of employment by continuing to work and without having signed a written acknowledgement of the terms; SOS Bureau Ltd v Payne 1982, SLT (Ch.Ct.) 33.[50]It is said that if the offeree knew of the offer and their actions amount to performance of the contract, a natural inference may bar denial of the existence of a contract, unless there is another reasonable interpretation of the action.[51]In order for there to be a contract the offeree must accept all the terms of the offer. Accepting only some of the terms does not lead to a concluded Constructive Dismissal[52]In Courtaulds Northern Textiles Ltd v Andrew 1979 IRLR 84, EAT it was a fundamental breach for the employer to conduct themselves in a “manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between the parties”. Woods v WM Car Services (Peterborough) LTD 1981, ICR 666 indicated that the Tribunal must look at the employer’s conduct as a whole to determine whether it is such, that judged sensibly and reasonably, the employee cannot be expected to put up with it”. Unlawful deduction from wages[53]S.13 Employment Rights Act 1996 states; “13 Right not to suffer unauthorised deductions. (1)An employer shall not make a deduction from wages of a worker employed by him unless— (a)the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or (b)the worker has previously signified in writing his agreement or consent to the making of the deduction. (2)In this section “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised— (a)in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or (b)in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion. (3)Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion. (4)Subsection (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion. (5)For the purposes of this section a relevant provision of a worker’s contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect. (6)For the purposes of this section an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified. (7)This section does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be subject to a deduction at the instance of the employer.”[54]The Tribunal first considered what the terms of the claimant’s contract were. Initially these were contained in the written agreement between the parties signed in 2015. The claimant had kept a copy of this contract whereas the respondent had not. The Tribunal took into account that the respondent was run as a volunteer Board with administration carried out by the company secretary. The Tribunal were satisfied that it was due to this lack of administration that the respondent failed to keep a record of the claimant’s[55]The contract outlined a salary of £22,000 per annum, an annual pay review and a discretionary bonus scheme. The contract also said that the usual hours were 35 hours per week but that it may involve evenings and weekends. The contract stated that “In addition, you may be required to work a reasonable amount of additional hours where necessary at basic rate pay. Additional hours worked do not form part of your weekly contracted hours”[56]In March 2021, the respondent agreed to pay the claimant overtime, for hours worked over 35 hours per week. The respondent eventually realised that this was a regular and therefore expensive position. An offer was made in March 2022 to raise the claimant’s pay to £32,000 per annum. In return for this, the claimant offered to raise his basic hours of work to 40 hours per week. The discussion was between the claimant and Mr Anderson and Mr Cameron. This was not reduced to writing and no formal agreement was made. Following this discussion the claimant continued to work his usual hours and continued claiming overtime, which was paid. The Tribunal therefore finds that there was no variation to the contract at that time.[57]In both June and September 2022 the Board discussed and agreed to offer the claimant £32,000 in return for 40 hours. The Board agreed that until the contract was finalised, the current situation would remain. The claimant was sent the minutes of this meeting. The Tribunal considered that this email was an offer which was made to the claimant. It contained the terms and was sent to him to inform him of the respondent’s decided position.[58]Although the claimant did not reply in writing to this offer, he did continue to work for the respondent, indicating his acceptance of the offer being put forward. It is the view of the Tribunal that at this point, both parties understood the offer and were in agreement to abide by its terms. The claimant did so by continuing to work. The respondent therefore ought to have maintained their side of the agreement but failed to do so.[59]The evidence showed that in November 2022 the claimant was asked to provide a draft job description, but also that the Board agreed that Jenny Mallinson, an HR professional would draft a job description. The claimant was not told that any offer of a pay rise was conditional upon him producing or assisting in producing this document. This was why in August 2024, when Mr Hall asked the claimant for the job description he did not take any steps to draft it.[60]The Tribunal does not accept that the respondent truly believed that the offer was conditional upon the provision by the claimant of a job description. There is no evidence which supports the assertion that this was a condition of the offer in September 2022. Given that the respondent hired Ms Mallinson and resolved to pay her to produce the job description, they cannot have also believed that it was a condition of the pay rise of the claimant, that he should produce this document.[61]The offer that had been made in September 2022 was therefore a valid offer, which had been accepted by the claimant’s conduct of continued work. It is notable that no further negotiation occurred after this point. That is because both parties understood and agreed the contract term which had been offered to the claimant in the email minutes of the meeting.[62]The Tribunal considers that the Respondent’s delay in commencing the payment of the increased salary until it had a job description, was a misunderstanding about whose role it was to provide it.[63]A further amendment to the contract was made by the discussion on 18 June 2024 to pay £35,000 for 40 hours, with no overtime and backdated to April 2024. Once again, the claimant, by continuing to work, agreed to this offer. He also asked about bonus at this time but was told that was part of this negotiation. In response the claimant continued to work his hours and did not further question the further increase which had been offered. Although Mr Anderson later said that the claimant did not provide a written response to the offer, the Tribunal does not consider that a formal written response is required. Contract terms can be offered verbally and accepted by the conduct of the party in cooperation with the terms offered.[64]The Tribunal is of the view that this was a genuine offer and that the claimant’s acceptance was shown by his continuing to carry out the work.[65]It was not until January 2025, when the claimant complained that these offers had not been honoured and payments not made that the Board took any steps.[66]When the claimant spoke with Mr Anderson on 26 March 2025 they offered him £32,000 from 1 April 2025. This represents an attempt by the respondent to extinguish the offer which had been made in June 2024 and had been worked to.[67]The claimant’s grievance outcome indicates that the respondent accepted that no payment had been made in accordance with the offer made in June 2022 and reiterated in September 2022. This admission can be inferred to be an understanding by the respondent that they had entered into contract terms with the claimant at that time.[68]The Tribunal therefore concluded that from September 2022 at the latest, the parties had an agreement that the claimant ought to be paid £32,000. That this was increased to £35,000 from June 2024. These payments have not been made. However the respondent has paid some overtime in that period to the claimant, which will need to be deducted in order to avoid an overpayment. Breach of Contract - Bonus[69]The claimant was entitled under his contract to access to a discretionary bonus scheme. That is not the same thing as being entitled to be paid a bonus.[70]A scheme was discussed in 2015, but no final scheme was agreed, or offered to the claimant and therefore no discretion was applied as to whether to pay a bonus to the claimant. Even if a scheme was agreed there was no evidence that the claimant had achieved any target and as the contract refers to a discretionary bonus, it was always the choice of the Board whether to pay such a bonus.[71]The Tribunal therefore finds that there was an entitlement to a bonus scheme. The terms of such a scheme were never identified and therefore it cannot be said that the claimant has lost a chance of a discretionary bonus. This claim is dismissed. Constructive Unfair Dismissal[72]As outlined above, the Tribunal has found that there was an implied term of trust and confidence and that the respondent breached it by failing to honour the pay increase which was offered and accepted.[73]The evidence showed that the claimant raised the issue with the respondent after September 2022 when the agreement was reached to pay him £32,000 per annum. Specifically in June 2024, January 2025 and March 2025. He therefore attempted to rectify any breach, but that the respondent failed to engage and failed to make the payments, or agree any back payment. The claimant therefore resigned in response to the fact that the respondent continued not to address their breach. The failure to engage with the claimant’s grievance being the last step which indicated to him that the respondent no longer wished to be bound by the employment contract.[74]The Tribunal also noted that the respondent accepted in the grievance outcome that it was wrong that there had been no salary increase since 2015 as outlined in the contract. They apologised for this and offered to increase the salary from 1 April 2025. However, this does not recognise that a term reflecting payment, or an increase in it, is a fundamental term of a contract. The failure to increase, as set out in the contract, is a breach of the implied term of trust and confidence between the parties. The respondent therefore accepted that they had breached the implied term. This could not have been a cause of the resignation, as the resignation occurred before the outcome of the grievance was provided to the claimant.[75]The admission by the respondent in the grievance outcome does however, show that the situation existed at the time that the claimant resigned and the Tribunal accepted that this was the reason that the claimant resigned. He therefore resigned in response to the breach (having tried on a number of occasions to resolve the matter).[76]The Tribunal note that the claimant put in a grievance identifying these points shortly before his resignation. The Tribunal therefore finds that the claimant resigned within a reasonable period. He had continued to work whilst he had tried to resolve the matter on a number of occasions. The Tribunal did not consider that these amounted to a waiver of the breach. Even if they did, he had once again raised the issue on 21 March 2025 and received no engagement from the Board.[77]The email from Mr Anderson to his Board colleagues shows that they had made plans to cover the claimant’s work and to advertise to replace him. This is a clear indication that they no longer wished to be bound in the contract of employment.[78]The Tribunal therefore concluded that the claimant’s claim for constructive unfair dismissal is upheld.[79]The Tribunal could see no evidence to support the allegation that a Polkey type reduction was appropriate. The respondent had breached a fundamental term of the contract and made some plans to replace the claimant by the time of his resignation. These are not matters of a procedural nature.[80]The parties will be contacted by the Tribunal to list a date for a remedy hearing, if the parties are unable to reach agreement on the amount of compensation to be paid by the respondent to the claimant. 05 August 2026