MR S MADANI v SPIRIT SSR LTD [2003] UKEAT 0641_03_0210

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0641_03_0210Case No Appeal No. EAT/0641/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR S MADANIAPPELLANTSPIRIT SSR LTDRESPONDENT
Before
Her Honour Judge Wakefield Mr D Norman Mr D SmithDate 2 October 2003
[1]APPEARANCES For the Appellant MR D GALASSI (Solicitor) Pro Bono For the Respondent MR G ARMSTRONG (Representative) Instructed by: PPMC Employment Advisory Group Liberty Court Chambers The Old Courthouse Chapel Street Dukinfield Cheshire SK16 4DT HER HONOUR JUDGE WAKEFIELD This is an appeal by Mr Sayed Amir Madani against three aspects of a decision of an Employment Tribunal sitting at Manchester on 6 June 2003. A cross-appeal by the Respondent has not been pursued today and we gave leave for it to be withdrawn.[2]By the decision sent to the parties with Extended Reasons on 30 June 2003 the Employment Tribunal found, as relevant to this appeal, the following. Firstly, that the Appellant was a "worker" within the meaning of the National Minimum Wage Act 1998 . Secondly, that the Appellant's claim under section 11 of that Act failed. Thirdly, that the Appellant was entitled, under the Act and by reason of non-payment, to be paid by the Respondent additional remuneration in the sum of £2,606.08 and, finally, that the Appellant had not in his Originating Application raised a complaint of having suffered detriment under section 23 of the Act and should not be allowed to amend the Originating Application in order to make such a complaint.[3]By the Notice of Appeal the Appellant says that as regards the finding under section 11 of the Act the Employment Tribunal misinterpreted the law. As regards the additional remuneration due, it is argued that a greater sum is due by reason of unauthorised deductions or non-payments not recognised by the Employment Tribunal. As regards the detriment claim, it is argued that the Originating Application did, on a proper construction, raise the complaint or, if it did not, that the Appellant should have been given leave to amend in order to include it.[4]We first to consider the section 11 claim. The Employment Tribunal said, at paragraph 3 the following: 3 "The applicant also makes a claim under section 11 of the National Minimum Wage Act that the respondents have failed to provide him with records in relation to his pay. The Tribunal dismisses this claim as at the time when the applicant was a worker he did not make a request in writing for these records in accordance with the requirements of section 11. The first evidence of a written request is in a letter dated 2 December 2002 from the applicant to a Mr Breakell and as this is after the time that he had ceased to be employed the Tribunal dismisses this part of the claim."[5]By section 10 of the National Minimum Wage Act 1998 a worker may, in the circumstances set out in the section, and for the purposes there set out(a) "require his employer to produce any relevant records." There is no dispute that the Appellant so required of the Respondent in accordance with section 10. By section 11 of the Act it is provided as follows: 11 (1) "A complaint may be presented to an employment tribunal by a worker on the ground that the employer – (a) failed to produce some or all of the relevant records in accordance with subsections (8) and (9) of section 10 above; or(b) failed to allow the worker to exercise some or all of the rights conferred by subsection (1) (b) or (4) (b) of that section. (2) Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall – (a) make a declaration to that effect; and (b) make an award that the employer pay to the worker a sum equal to 80 times the hourly amount of the national minimum wage (as in force when the award is made)."[6]The definitions of "worker" and of "employer", for the purposes of these provisions, are respectively at section 54 (3) and section 54 (4) of the Act. They are in the following terms: 54 (3) "In this Act "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… (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."[7]In light of these provisions we are satisfied, and indeed the representative appearing on behalf of the Respondent did not today argue to the contrary, that notwithstanding that at the time of the request to the Respondent the Appellant had ceased to work for the Respondent, he was entitled to require production of the records. There is no dispute that the Respondent failed to produce any such records.[8]In those circumstances we are satisfied that the Employment Tribunal were wrong in law to find as they did and we make a declaration under section 11 (2)(a) that the Appellant's complaint under section 11 is well-founded and we award to the Appellant under section 11 (2)(b) the sum of £360, being 80 x £4.50 which is the current rate.[9]The next ground of appeal relates to the unlawful deduction claim. As regards the quantum awarded in respect of unlawful deductions, it arises from the following passage in paragraph 3 of the Extended Reasons: 3 "On 30 September 2002 the applicant was told that his services were no longer required. During the course of this work the applicant was paid £10.00 per shift which he worked. It was not disputed by the applicant that he never actually received any cash but that the £10.00 per shift was allocated as a credit to his account with the college for payment of fees."[10]In calculating the sum due to the Appellant under the National Minimum Wage Act 1998 the Employment Tribunal did not include these sums of £10.00 per shift. The Appellant argues that these were deductions from the National Minimum Wage not authorised by the Act or the Regulations and the Respondent has not argued otherwise before us today. The Respondent's position is that it is a matter of interpretation of the statutory provisions and it is for us to determine whether the Employment Tribunal was right.[11]The starting point is section 17 of the National Minimum Wage Act 1998 . That is headed ' Non-compliance: worker entitled to additional remuneration ' and subsection (1) reads: 17(1) "If a worker who qualifies for the national minimum wage is remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage, the worker shall be taken to be entitled under his contract to be paid, as additional remuneration in respect of that period, the amount described in subsection (2) below.(2) That amount is the difference between – (a) the relevant remuneration received by the worker for the pay reference period; and (b) the relevant remuneration which the worker would have received for that period had he been remunerated by the employer at a rate equal to the national minimum wage.(3) In subsection (2) above, "relevant remuneration" means remuneration which falls to be brought into account for the purposes of regulations under section 2 above."[12]We then looked at the Regulations. Under Regulation 2 of the National Minimum Wage Regulations 1999 it is provided:
""the total of remuneration" means the total of money payments determined in accordance with regulation 30."
[13]Turning then to Regulation 30, headed " Payments to the worker to be taken into account " we find: 30 "The total of remuneration in a pay reference period shall be calculated by adding together –(a) all money payments paid by the employer to the worker in the pay reference period;(b) any money payments paid by the employer to the worker in the following pay reference period in respect of the pay reference period (whether in respect of work or not);(c) any money payment paid by the employer to the worker later than the end of the following pay reference period in respect of work done in the pay reference period…"[14]Regulations 31 to 37 then deal with permitted reductions and deductions. Credits to an account outstanding and due from the worker to the employer do not, on our construction, fall within any of these permitted reductions and deductions.[15]We therefore conclude that there have been the unlawful deductions contended for and that the Employment Tribunal were clearly wrong in not making an award in respect of the shift payments.[16]The parties are agreed that in these circumstances the order made by the Employment Tribunal for payment to the Appellant by the Respondent of the sum of £2,606.08 should be substituted by an order for payment to the Appellant by the Respondent of the sum of £3,476.80. We so order.[18]Finally we deal with the ground of appeal relating to the complaint of detriment. In paragraph 9 of the Extended Reasons the Employment Tribunal said this: 9 "The applicant at the conclusion of the evidence at today's hearing sought to recall Mr Smith to give evidence for the respondents in response to questions which he sought to put pursuant to a claim that he had been unfairly dismissed and/or subject to a detriment on the grounds that he had asserted a statutory right." I pause here to say that the Appellant tells us today that he has never contended that he was unfairly dismissed. "The Tribunal made enquiries of him as to the inclusion of such claims in the Originating Application in response to which the applicant conceded that it was not clear on the face of the Originating Application that he was making such a claim and that having just had a break from the Tribunal proceedings and spoken to his solicitor on the telephone had received advice that he should pursue such a claim. If the applicant was dismissed as we have found on 30 September 2002 he would need to submit a claim in respect of such a dismissal no later than 1 January 2003. The Tribunal refused leave to amend the Originating Application (the one which has been received did not clearly make the claims referred to although it was received on 19 December 2002). On the grounds that it had not been impracticable for the applicant to have made these claims in time. We did not exercise our discretion to extend the time limit for presenting such a claim as it was not in our view fair to do so. The applicant was not an unintelligent person and had had the benefit of advice throughout these proceedings. The respondents were defending this claim on the basis that it was a claim for outstanding pay and holiday pay and the Tribunal had spent a whole day listening to evidence on those claims. In the circumstances the Tribunal does not give leave to amend the Originating Application to enable the applicant to bring these further claims." Section 23 of the National Minimum Wage Act 1998 provides, as relevant to this part of the appeal: 23 (1) A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer, done on the ground that – (a) any action was taken, or was proposed to be taken, by or on behalf of the worker with a view to enforcing, or otherwise securing the benefit of, a right of the worker's to which this section applies…" The section applies to the right to be paid the National Minimum Wage.[19]Looking at the question of the proper construction of the Originating Application, we note the following on its face. In box 1 where the complainant is invited to give the type of complaint that the Tribunal is asked to consider, there has been filled in:
"Failure to pay National Minimum Wage (NMW). Failure to grant holiday entitlement due under Working Time Regulations 1998. Failure to provide records of employment."
Box 3 is blank where a complainant is invited to fill in details of any representation, as is box 9 where there can be specified any details of the date of a complaint other than dismissal. In box 11, most relevantly, it says the following:
"I was a student and employee of the School of Sound in Manchester between February and October 2002. During my employment I was unlawfully paid lower than the National Minimum Wage ("the NMW"). After raising the college's failure to pay NMW dated 16/10/02, at a meeting between Phil Smith (Company Accountant) and myself, I was informed that I was being suspended from the course if I did not pay the remaining course fees and my concerns on NMW were ignored and rejected as not provable. I have also been unlawfully dismissed from my reception post. I seek the following: 1. Payment of arrears of salary from Feb '02 to Oct '02 850 hrs at £4.10 = £3,485. 2. Holiday pay due on termination of employment under the Working Time Regulations 1998 £300. 3. Failure to provide employment records £500. Since I have missed nine weeks of the course, return to college is no longer practicable nor realistic. I therefore also require a refund of the fees paid £1,540. Total = £3,485 + 31,540 + £500 = £5,825."
Clearly there is nowhere in that form in express and explicit terms a raising of the complaint of detriment under section 23 of the Act.[20]The Appellant argues that all the necessary facts giving rise to such a claim are however present on the form and that, if necessary, a construction of the grounds of complaint can be made having regard to the Respondent's existing knowledge of the Appellant's complaints, as amplified in a letter from the Appellant to the Respondent dated 2 December 2002. The Originating Application was presented on 18 December.[21]That letter of 2 December is addressed to Mr Breakell at the School of Sound Recording. It asks first of all for arrears of wages and access to the course. It then says: "This letter is written to request … (3) the College's explanation for(a) failure to pay the NMW (both to me and my colleagues)(b) subjecting me to a detriment after raising this issue, in that I have been suspended from the course and dismissed from my reception work" and then it refers to holiday entitlement.[22]We have also been referred to the Appellant's witness statement dated 4 June 2003 and which was before the Employment Tribunal at the hearing on 6 June 2003. Paragraph 3 of that witness statement reads as follows: (3) "After raising my entitlement to the NMW with the college, I was victimised by being subjected to two detriments by them (section 23 NMW Act 1998) –(1) I was dismissed from the post which I held with them and(2) I was suspended from my course, never to return. I claim compensation for lost earnings based on what the Tribunal finds were my average hourly working hours. Also I claim a refund of my course fees paid to date since my suspension was never revoked, therefore I did not return to the course and wasted £1,540 course fees on an incomplete course which I wanted to finish."[23]We have been referred to the decision of the House of Lords in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 as to interpreting a contractual document (as it was in that case) by seeking to find the meaning which the document would convey to a reasonable person having all the background knowledge reasonably available to the parties. We are also reminded that it is the substance of a complaint to an Employment Tribunal and not the label which is important, and we were referred to Whitmore v Commissioners of Inland Revenue (EAT/0727/02).[24]In all the circumstances we have been persuaded that on a proper construction of this Originating Application the Appellant did raise the question of detriment and that he should, therefore, have been allowed to pursue that complaint before the Employment Tribunal.[25]We are satisfied that the Employment Tribunal were wrong to find that there was no such construction possible and we allow the appeal on that ground. There being in those circumstances no question of a need to amend, we do not further consider that aspect of the appeal.[26]We remit the consideration and determination of the complaint of detriment to the Employment Tribunal to the same panel, if that be possible; otherwise a wholly different panel. The appeal is therefore allowed in those various respects.