Mills v Ashderg Ltd [2010] NIIT 6676

THE INDUSTRIAL TRIBUNALS

CASE REF: 6676/09

CLAIMANT: Alan Mills

RESPONDENT: Ashderg Ltd

DECISION

The unanimous decision of the tribunal is that the claimant’s dismissal was automatically unfair and that the respondent has failed to give the claimant proper notice. The respondent shall pay the claimant £1,400.00.

Constitution of Tribunal:

Chairman: Ms Bell

Members: Ms Hamilton

Mr Rosbotham

Appearances: The claimant appeared and represented himself.

The respondent was represented by Mr Armstrong, Director of the respondent Company.

1. The claimant in his claim complained that all of his claim was about dismissal, that he had suffered an unlawful deduction from wages, that he had received only one weeks pay in lieu of notice and sought four weeks more pay in lieu of notice. By letter dated 25 August 2009 the Office of the Industrial Tribunal confirmed to the claimant that his complaints of unfair dismissal and breach of contract (notice pay) had been accepted but the part of his claim relating to failure to pay wages – unauthorised deduction from wages - was rejected.

2. The respondent in its response asserted that the claimant was given notice and that proper procedures were followed before the claimant was made redundant. At hearing the respondent indicated that it had not been aware from the claim form that the claimant was raising a complaint of unfair dismissal but acknowledged receipt of a copy of the Office of the Industrial Tribunal’s correspondence to the claimant dated 25 August 2009 confirming acceptance of the claimant’s complaints of unfair dismissal and breach of contract (notice pay) and confirmed that it wished to proceed with the hearing.

Issues

3. The issues before the Tribunal were as follows:-

(1) Was the claimant unfairly dismissed?

(2) Did the claimant receive proper notice on termination of his employment by the respondent?

Evidence

4. The tribunal considered the claim, the response, documentation from the respondent, heard oral evidence from the claimant and Mr Armstrong, Director of the respondent Company.

Findings of Fact

5. The respondent Company’s business was reinstating tarmac on roads and carriageways and it employed five employees including the claimant and Mr Armstrong.

6. The claimant commenced employment with the respondent on 10 April 2004 as a driver/labourer/ganger for tarmac contracts and was paid £450.00 gross per week being £350.00 net. The claimant worked in a two man team with another employee.

7. In October 2008 the respondent issued all employees, including the claimant a letter confirming “owing to the decline in work contracts, we are experiencing, I have no option but to put everyone on notice, that I may have to pay you off and employ you as and when required”.

8. In April 2009 the respondent issued a further letter confirming that owing to the ongoing decline in work contracts he still had “no option but to still keep everyone on notice, that I may have to pay you off and employ you as and when required.”

9. Mr Armstrong gave evidence that the April letter was hand delivered to all employees but the claimant disputed ever having received this letter.

10. The respondent’s main source of work was as a sub-contractor for Morrow Contracts Ltd for water service patching.

11. From May 2009 the respondent incurred additional fuel costs for the company’s construction vehicles and approached all employees to advise them to offset this cost they would need to try to cover more metres per day on the Morrow Contract as the respondent was paid by the metre. However, the respondent found that the amount of work actually provided by Morrow Contracts declined and it did not get the opportunity to carry out additional work to offset its higher fuel costs.

12. In July 2009 Morrow Contracts Ltd approached Mr Armstrong and informed him that the respondent would have to take a 10% cut in its rate of pay. Accordingly Mr Armstrong called a meeting of all staff in July 2009 and informed everyone that Morrow Contracts Ltd were not prepared to keep the Company in employment unless a 10% cut in the rate of pay was accepted and he sought the employee’s agreement to a 10% reduction in their pay. The claimant refused to take a pay reduction and asked Mr Armstrong would Morrow Contracts Ltd accept it if they covered additional metres instead of the proposed pay reduction, this was not however acceptable to Morrow Contracts Ltd and Mr Armstrong confirmed that to the claimant on 3 July 2009 and as a result of the claimant’s refusal to accept the proposed pay cut put him on notice that his employment would end on 10 July 2009 and confirmed this in a letter to the claimant. The respondent as anticipated lost its contract with Morrow Contracts when it did not accept the proposed pay cut.

13. The claimant worked one week’s notice up to 10 July 2009 and the respondent paid the claimant his proper redundancy entitlement.

The Law

14. The Employment (Northern Ireland) Order 2003 Schedule 1 sets out the statutory dismissal and disciplinary procedures to be followed at the bare minimum, where applicable, by an employer contemplating a dismissal or taking disciplinary action against an employee. The three steps required to be followed under the standard procedure are as follows:-

Step 1: Statement of grounds for action and invitation to meeting.

(1) The employer must set out in writing the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

Step 2: Meeting

(1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.

(2) The meeting must not take place unless –

(a) The employer has informed the employee what the basis was for

including in the statement under paragraph 1(1) the ground or grounds given in it and (b) the employee has had a reasonable opportunity to consider his response to that information.

(3) The employee must take all reasonable steps to attend the meeting.

(4) After the meeting the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.

Step 3: Appeal

(1) If the employee does not wish to appeal, he must inform the employer.

(2) If the employee informs his employer of his wish to appeal, the

employer must invite him to attend a further meeting.

(3) The employee must take all reasonable steps to attend the meeting.

(4) The appeal meeting need not take place before the dismissal or disciplinary action takes effect.

15. By virtue of Article 126 of the Employment Rights (Northern Ireland) Order 1996 an employee has the right not to be unfairly dismissed by his employer. Article 130 sets out how the question of whether a dismissal is fair or unfair is to be determined, however under Article 130A(1) an employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if -

(a) One of the procedures set out in Part 1 of Schedule 1 to the

Employment (Northern Ireland) Order 2003 (Dismissal and Disciplinary Procedures) applies in relation to the dismissal,

(b) Procedure has not been completed, and

(c) The non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

16. The orders and compensation an Industrial Tribunal may order by way of remedy where it finds that the grounds of an unfair dismissal complaint are well founded are set out at Article 146-161 of the 1996 Order. Article 157 provides that the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer.

17. There is provision at Article 17 of the 2003 Order for an uplift to be applied to

awards in proceedings before an Industrial Tribunal relating to a claim under any of the jurisdictions listed in Schedule 2 [which includes Article of 145 of the Employment Rights (Northern Ireland) Order 1996 (Unfair Dismissal) and the Industrial Tribunal’s extension of Jurisdiction Order (Northern Ireland) 1994 (Breach of Employment Contract and Termination)].

18. Where it appears to the Industrial Tribunal that a claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies, the statutory procedure was not completed before the proceedings were begun, and the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with the requirement of the procedures, in which case it shall (subject to paragraph (4) therein) 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%. This duty does not apply if there are exceptional circumstances which would make a reduction or increase of that percentage unjust or inequitable and the tribunal may make no increase or of such lesser percentage as it considers just and equitable in all the circumstances.

19. Article 118(1) of the 1996 Order sets out minimum notice to be given by an employer to an employee to terminate the contract of employment of not less than one weeks notice for each year of continuous employment if his period of continuous employment is two years or more but less than twelve years.

20. The circumstances in which an employee who is dismissed shall be taken to be dismissed by reason of redundancy are set out under Article 174 of the 1996 Order and include if the dismissal is wholly attributable to the fact that the requirements of that business for employees to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish.

21. Harvey on Industrial Relations and Employment Law Division D1 Unfair Dismissal, discusses steps involved in calculating the loss suffered by the employee for the purpose of the compensatory award.

Reference is made at paragraph [2546] of Harvey to Lord Bridge having indicated in Polkey v AE Dayton Services Ltd [1987] IRLR 503 that the chances of whether or not the employee would have been retained must be taken into account when calculating the compensation to be paid to the employee. Accordingly, if the prospects of the employee having kept his job had proper procedures been complied with were slender, then there would be a significant reduction in compensation. Lord Bridge expressed the position as follows:-

“If it is held that taking the appropriate steps which the employer failed to take before dismissing the employer would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment”.

Application of Law to the Facts Found

22. On consideration of all the evidence before it the tribunal finds that the standard procedure of the statutory dismissal and disciplinary procedures applied to the claimant’s dismissal and, although some procedure has been followed by the respondent prior to dismissing the claimant by reason of redundancy, procedures of the minimum standard required under the 2003 Order have not been complied with and that the non-completion of the procedure is wholly or mainly attributable to failure by the respondent to comply with its requirements and this renders the dismissal as automatically unfair under Article 130A of the 1996 Order. However, based on both the respondent’s and claimant’s evidence it is clear that the claimant was well informed as to the potential redundancy situation and that he was aware that if the pay cut suggested was not accepted that this would result in the inevitable loss of the respondent’s main contract and his own job loss and even if in compliance with the statutory procedures the claimant had been provided with a written statement of grounds for action and an invitation to a meeting, a meeting had taken place and the claimant been informed of a right of appeal and provided with an appeal, the tribunal consider that there is a 100% likelihood that the claimant’s dismissal by reason of redundancy would still have occurred in any event and that the claimant’s employment would not have continued beyond his proper notice entitlement.

23. The tribunal is satisfied that irrespective of whether the claimant received the April 2009 letter warning of the ongoing decline in work contracts and the need to keep everyone on notice, which he disputes, that the respondent did not give certain notice of the definitive date of termination of the claimant’s contract of employment until 3 July 2009. Under Article 118 of the 1996 Order a minimum notice requirement is implied into the claimant’s contract of employment requiring the respondent to provide not less than five weeks notice to the claimant on termination of his employment, the claimant having five years continuous employment, whereas the claimant only received one week’s notice. The tribunal accordingly finds that the respondent is in breach of the claimant’s contract of employment in failing to provide the claimant proper notice on termination of his employment and the claimant is entitled to payment in lieu of his balance notice entitlement.

24. The tribunal awards the following compensation:-

Basic Award

The basic award is reduced to nil by deduction of the redundancy payment already received by the claimant from the respondent on termination of his employment.

Compensatory Award

This award shall be such an amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the claimant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer. The tribunal is satisfied that there is a 100% likelihood of the dismissal of the claimant having taken place in any event had the statutory minimum dispute resolution procedures been followed and that the claimant’s employment would not have continued beyond his proper notice entitlement. The tribunal considers that no loss has been incurred by the claimant as a result of the dismissal and that a nil award is just and equitable in the circumstances.

Uplift under Article 17 of the 2003 Order

As the compensatory award is nil any uplift thereof is nil.

Notice Pay

The respondent shall pay the claimant four week’s notice pay

@ £350 per week = £1,400.00.

Conclusion

25. It is the unanimous decision of the tribunal that the claimant’s dismissal was

automatically unfair and that the respondent has failed to give the claimant proper notice. The respondent shall pay the claimant £1,400.00.

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

Chairman:

Date and place of hearing: 8 February 2010, Belfast.

Date decision recorded in register and issued to parties:

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	Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Mills v Ashderg Ltd [2010] NIIT 6676_09IT (07 May 2010) URL: http://www.bailii.org/nie/cases/NIIT/2010/6676_09IT.html Cite as: [2010] NIIT 6676_9IT, [2010] NIIT 6676_09IT

Industrial Tribunals Northern Ireland Decisions