Dalzell v David Anderson [2010] NIIT 180

THE INDUSTRIAL TRIBUNALS

CASE REF: 180/10

CLAIMANT: Christopher Michael Dalzell

RESPONDENT: David Anderson

DECISION

The decision of the tribunal is that the claimant be awarded a total of £377.60 in respect of his claim for holiday pay and £57.75 in respect of his claim for unpaid wages.

Constitution of Tribunal:

Chairman (sitting alone): Mr W A Palmer

Appearances:

The claimant represented himself.

The respondent did not appear.

The Claim

1. The claimant claimed for holiday pay and also outstanding wages which had accumulated when his contract of employment terminated.

Response to the Claim

2. No response to the claim was presented.

Evidence

3. The claimant gave evidence on his own behalf and provided two documents for consideration.

Findings of Fact

4. The claimant was employed by the respondent, under an oral contract of employment, from 19 March 2009 until 21 November 2009, as a chef at the Burgundy Bar, Lisburn. There was no agreement, in writing or otherwise, as to holidays. The oral arrangement, as to wages, was that the claimant would receive £302 per week after statutory deductions. The respondent told the claimant that he (the respondent) would “look after” tax and insurance.

5. In his Claim Form, the ET1, at paragraph numbered 7, the claimant states, “I can’t work out my wages before tax as I was paid £197 by cheque and a further £105 in cash on a Saturday from Mr David Anderson [the respondent]”. I wished to satisfy myself, therefore, that, as far as the claimant was concerned, the contract of employment was not a tainted one. The claimant explained as to how the arrangement for the payment of wages came about. The respondent approached the claimant and told him that he could not afford to pay him fully by cheque on Fridays, because on Fridays he would not have sufficient funds in his bank account to do so and that most income, from the business, was generated on Fridays, Saturdays and Sundays. As a result of the respondent’s approach, the claimant agreed that part of his wages (£197) would be paid by cheque on Fridays and the balance (£105) paid in cash between 10.00 p.m. on Saturdays and

11.00 a.m. on Mondays. He received the first instalment of his wages on Fridays by cheque crossed for cash, which meant that he could draw the cash at the respondent’s bank, and the remainder between Saturday evening and Monday morning. I am satisfied that if there was any illegality involved (and I am not saying that there was) the claimant was unaware of it.

6. When the contract of employment terminated the respondent told the claimant that the holiday year ran from the 1 June and, therefore, he had lost any holidays accrued before that date. On the claimant’s evidence, I am satisfied that nothing, with regard to holidays had either been agreed or committed to writing. Further, I am satisfied that the claimant took 10 days holiday from 6 September 2009 until 20 September 2009. I am also satisfied that he worked a 5 day week.

Holiday Pay

The Law

7. As there was no contractual arrangement as to the claimant’s holiday entitlement, the Working Time Regulations must be consulted in order to establish that entitlement.

8. The relevant provisions, which I have applied, are contained in Regulations 13, 13A, (as inserted by the Working Time (Amendment) Regulations (Northern Ireland) 2007), 14 and 15A (as inserted by the Working Time (Amendment) Regulations (Northern Ireland) 2002) of the Working Time Regulations (Northern Ireland) 1998 (“the Regulations of 1998”). Regulations 13 and 13A of the Regulations of 1998 deal with entitlement to annual leave, Regulation 14 with compensation related to annual leave and Regulation 15A with rounding up.

Calculation

9. Between 19 March 2009 and 31 March 2009 the claimant worked for 1 and 4/5th weeks and from I April 2009 until 21 November 2009 he worked for 32 and 2/3rd weeks.

10. For the 1 and 4/5 weeks his holiday entitlement was point 8 of one day, calculated by dividing 1 and 4/5ths by 52 and multiplying the result by 24. For the 32 and 2/3 weeks his leave entitlement was 17 and 3/5 weeks, calculated by dividing 32 and 2/3 by 52 and multiplying the result by 28.

11. The total leave accrued by the claimant during his period of employment was 17.8 days, which is rounded up to 18 days. He took 10 days’ leave during his employment, which leaves a balance, at termination, of 8 days.

12. I am satisfied that the claimant earned £302 per week net. The total amount outstanding, in respect of holiday pay, at termination of the contract was £483.20. Subsequent to the issue of these proceedings, the respondent paid the claimant £222.79 for holiday pay, and I shall refer to this later. In order to arrive at the award and before applying an uplift, the £222.79 must be deducted from the £483.20 (see Tim Arrow & Sons (a firm) v Onley [2009] UKEAT 0527/08). The award for the claim, in respect of holiday pay, is £260.41.

Uplift

13. Article 15 (1) of the Employment (Northern Ireland) Order 2003 (“the Order of 2003”) provides that Schedule 1 to that Order shall have effect. The statutory dispute resolution procedures, including the grievance procedures, are set out in Schedule 1. Under the standard grievance procedure the employee must set out his/her grievance in writing and send the statement or a copy of it to the employer. The claimant fulfilled this obligation by sending a letter, dated 23 November 2009, to the respondent, in respect of his outstanding holiday pay. On receipt of the grievance the employer must invite the employee to attend a meeting to discuss the grievance. The respondent, in this instance, did not invite the claimant to such a meeting and, therefore, he did not comply with the grievance procedures.

14. However, on or after 11 March 2010, the respondent forwarded a cheque to the claimant in the sum of £222.79, in respect of holiday pay for 6.66 days. In arriving at his calculation of the amount due to the claimant, the respondent used the figure of £305.29 as gross pay and made deductions, in respect of income tax and national insurance of £82.50, leaving a balance of £222.79. As stated earlier, I consider that under the arrangements entered into between the parties, the net pay to be paid to the claimant was £302 per week. The gross pay, therefore, must have been in the region of £400. The upshot is that the respondent paid the claimant £260.41 short of what he was entitled to receive.

15. Article 17 (1) of the Order of 2003 states:

“This Article applies to proceedings before an industrial tribunal relating to a claim under any of the jurisdictions listed in Schedule 2 by an employee.”

16. The claim in respect of holiday pay is listed in Schedule 2.

17. Article 17 (3) of the Order of 2003 provides as follows,

“If, in the case of proceedings to which this Article applies, it appears to the industrial tribunal that-

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(c) the non-completion was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure,

it shall, subject to paragraph (4) [which deals with exceptional circumstances, which circumstances, I consider do not arise in the instant case], increase any award which it makes to the employee by 10% and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent.”

18. In deciding whether an enhancement in excess of 10% should be awarded, I have had regard to the following passages from Harvey on Industrial Relations and Employment Law, Vol. 1 paragraphs 995 and 995.01 and draw attention, in particular, to the final two sentences of paragraph 995.01, where it is stated, “What if the employer simply declined to give evidence on the issue, or was debarred from appearing because his response had not been submitted in time? A tribunal could not sensibly be required to give the employer the benefit of doubt in those circumstances.”

[995]

“In addition, the tribunal has a discretion to impose a greater increase or decrease, up to a total of 50%. In practice cases involving increases have been far more common than those involving decreases, and there is no appellate guidance to date as to whether any different principles apply to decreases than to increases. The leading cases on increases are (in chronological order) Metrobus Ltd v Cook, [2007] All ER (D) 60 (Mar), EAT; Aptuit (Edinburgh) Ltd v Kennedy [2006] EATS/0057/06, Cex Ltd v Lewis, [2007] All ER (D) 167 (Aug),EAT Butler v GR Carr (Essex) Ltd [2008] All ER (D) 238 (Feb); McKindless Group v McLaughlin [2008] IRLR 678; and Virgin Media Ltd v Seddington, [2009] All ER (D) 23 (Apr), EAT. The first, third and fourth cases each emphasise that it will be rare for the exercise of a discretionary power of this nature to be susceptible to appeal. In Aptuit and McKindless, the appeal was allowed on the basis that the tribunal had taken into account irrelevant factors; in Aptuit these were the size of the employer and what the tribunal had judged to have been the shoddy treatment of the employee, and in McKindless the irrelevant factor was that the employer had conceded unfairness only very late in the day (a matter which, as Lady Smith pointed out was more an issue for an award of costs than a factor affecting compensation). The need to consider only the circumstances surrounding the failure to complete the statutory procedure, and not more general indications of unreasonableness on the employer's part, was reiterated by the EAT, Lady Smith again presiding, in Bells Food Group Ltd v Latimer [2009] UKEATS/0021/09. The principal points to be derived from the final case, Seddington, are that the tribunal should always give reasons for the size of any uplift, and should not apply a mechanistic approach of itemising the number of breaches of the procedure, but should rather evaluate their seriousness overall.

[995.01]

The factors most relevant to discretion are likely to be the seriousness of the default, and the significance of it in terms of impact on the outcome of the process. Tribunals are likely to start at the top of the scale in any case where there has been a total failure to follow the procedure, and then to consider what if any factors warrant a reduction of the percentage (or amount: there is no authority on whether the uplift or reduction has to be expressed as a percentage, albeit that is the invariable practice). One point made by the EAT in McKindless which may present difficulties for tribunals in reaching an appropriate figure is that the exercise of discretion to increase the uplift required that there was evidence to support the conclusion. The tribunal will usually have heard evidence as to the nature of the default in following the procedure, but if the decision is intended to suggest that an employer cannot be penalised by a greater uplift than 10% without evidence as to his reasons for failing to comply with the procedure, there would be obvious difficulties, which may unfairly disadvantage the claimant. What if the employer simply declined to give evidence on the issue, or was debarred from appearing because his Response had not been submitted in time? A tribunal could not sensibly be required to give the employer the benefit of the doubt in those circumstances.”

19. I consider it a serious matter that the respondent did not comply with the requirements imposed by the Order of 2003, namely, to follow the grievance procedures. The procedures were ignored. They have been in force for quite a while and I am satisfied that it is likely that the respondent knew of their existence. It could be said that the respondent made an effort to resolve the matter by forwarding the payment of £222.39. However, he did so almost four months after the grievance letter was sent to him (and approximately six weeks after the Office of the Industrial Tribunals forwarded him a copy of the claim), without reference or consultation with the claimant and he used the wrong figures to calculate the amount outstanding. In the circumstances, I consider that an uplift of 45% would be appropriate. The full award, therefore, under this head is £377.60.

Unpaid Wages

20. It is clear, from the ET1, that the claimant is claiming unpaid wages. The claimant accepts that he did not lodge a grievance with the respondent with regard to this claim. The letter of 23 November 2009 related only to the holiday pay claim. This tribunal does not have jurisdiction to consider a claim under Article 45 of the Employment Rights (Northern Ireland) 1996 for unauthorised deductions from wages. The claimant is debarred from presenting such complaint to the tribunal, by virtue of Article 19 (1) and (2) of the Order of 2003: unauthorised deductions appear in Schedule 3 to the Order of 2003 and this is one of the jurisdictions to which Article 19 applies.

21. However, claims under the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 (“the Order of 1994”) do not appear in Schedule 3 to the Order of 2003. I consider, therefore, that I have jurisdiction to deal with an unpaid wages claim under the Order of 1994

22. I am satisfied that wages of £105 were outstanding on the termination of the claimant’s employment. I am also satisfied that the £105 has not since been paid to the claimant. I, therefore, make an award of that amount, subject to a deduction under the provisions of Article 17 (2) of the Order of 2003: Article 17 (2) applies to the jurisdictions listed in Schedule 2 to the Order of 2003 and listed in that Schedule is the Order of 1994.

23. Article 17 (2) states:

“If in the case of proceedings to which this Article applies [it applies to jurisdictions listed in Schedule 2 to the Order of 2003], it appears to the industrial tribunal that-

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(i) to comply with a requirement of the procedure, or

(ii) to exercise a right of appeal under it,

it shall, subject to paragraph (4) [which deals with exceptional circumstances and is not relevant in the instant case], reduce any award which it makes to the employee by 10 per cent, and may, if it considers it just and equitable in all the circumstances to do so, reduce it by a further amount, but not so as to make a total deduction of more than 50 per cent.”

24. The claimant wrote the letter of grievance about holiday pay on Monday 23 November 2009. He was to collect his wages from the respondent on Friday 27 November 2009. I am satisfied that he had an expectation that he would receive his full wages on that date. However, he did not. He was handed the usual cheque, but not the cash amount. He then consulted a solicitor who told him “to go ahead and fill in the IT1”. Had the solicitor completed the ET1 a fee would have been charged. I am satisfied that the claimant was aware that a grievance was required to be raised in respect of this claim. Taking account of the circumstances, and notwithstanding the real possibility that the respondent would also have ignored a grievance letter concerning this claim, I shall reduce the award by 45%.

25. The award I make in respect of the unpaid wages is £105 and I reduce that by 45%, leaving a net award of £57.75.

26. The total amount I award to the claimant is £435.35, made up of £377.60 in respect of holiday pay and £57.75 in respect of unpaid wages.

27. This is a relevant decision for the purposes of the Industrial tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing: 24 March 2010, Belfast

Date decision recorded in register and issued to parties.

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You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Dalzell v David Anderson [2010] NIIT 180_10IT (03 June 2010) URL: http://www.bailii.org/nie/cases/NIIT/2010/180_10IT.html Cite as: [2010] NIIT 180_10IT

Industrial Tribunals Northern Ireland Decisions