Ekwelem v Excel Passenger Service Ltd (Unlawful Deduction from Wages) [2016] UKEAT 0291_15

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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Ekwelem v Excel Passenger Service Ltd (Unlawful Deduction from Wages) [2016] UKEAT 0291_15_2302 (23 February 2016) URL: http://www.bailii.org/uk/cases/UKEAT/2016/0291_15_2302.html Cite as: [2016] UKEAT 291_15_2302, [2016] UKEAT 0291_15_2302

THE HONOURABLE MRS JUSTICE SIMLER DBE (PRESIDENT)

1. This appeal arises out of proceedings between Mr Ekwelem, who was employed as a Driver and Vehicle Supervisor in the Respondent’s business, which provides passenger transport services to vulnerable groups, and the Respondent. The proceedings have a chequered history. A substantive hearing took place on 10 May 2012 before Employment Judge Balogun. She dismissed the claim for unlawful deduction of wages and rejected the claim of unfair dismissal, finding instead that the Claimant had resigned from his employment, but if that conclusion was wrong, that his dismissal was unfair but he had contributed to it 100 per cent.

2. Following a successful appeal before HHJ Hand QC on 14 October 2013, the case was remitted to a differently constituted Employment Tribunal to deal with two questions only: first, the question whether there were unlawful deductions from wages in the period between 1 September and 8 October 2010; and secondly, on the footing that the Tribunal’s finding that the Claimant had resigned from his employment could not stand and was to be substituted by a decision that he had been unfairly dismissed, the question whether the Claimant contributed to his dismissal by his conduct and if so to what extent and how that should translate into any adjustment to basic and compensatory awards.

Factual Background

3. The essential facts can be summarised as follows. The Claimant was suspended by the Respondent on full pay on 14 July 2010 following a complaint from a client of the Respondent about inappropriate conduct towards her daughter, who had mental health issues. The complaint was referred to the police, and ultimately the Claimant was charged with a criminal offence. As a result of the intervention by the police, the Claimant’s Public Carriage Office licence - which was necessary for the purposes of his employment as a driver - was revoked. On 2 September 2010 the Claimant’s paid suspension was lifted, and he was placed by the Respondent on unpaid leave because he was then unable to fulfil his contractual duties as a result of the revocation of his Public Carriage Office licence (“PCO licence”).

4. Employment Judge Balogun in a Judgment with Reasons promulgated on 21 May 2012 found that the Claimant was told that he could resume work performing only the Vehicle Supervisor duties of his job. That offer was made at a meeting on 8 October 2010 but the Claimant refused it. In a letter dated 17 July 2011 the Claimant wrote to the Respondent confirming that he had been acquitted of the criminal charges and his PCO licence was reinstated. There was a meeting on 8 August 2011 to discuss his resuming employment, but at that meeting, the Claimant said he no longer wished to work for the Respondent as a Vehicle Supervisor or with vulnerable people. He was invited by the Respondent to give the matter further thought and to indicate within seven days whether or not he wished to return to his substantive role. There was no further correspondence from him and certainly no correspondence within the seven days identified until receipt of a letter from Fulham Legal Advice Centre dated 24 August 2011 in which he claimed that there had been unlawful deductions from wages by the Respondent between 1 September 2010 and 8 August 2011. Payment was demanded. Subsequent correspondence on behalf of the Claimant from the Law Centre made clear that he would not return to work until those wages were repaid. That condition was rejected by the Respondent in correspondence, and ultimately the Respondent treated the failure to respond and to make clear whether he wished to return or not as a resignation by the Claimant; whilst the Claimant maintained, to the contrary, that he had been unfairly dismissed.

5. Employment Judge Balogun found that the Claimant refused to perform his contract from 8 October 2010 by indicating that he was neither ready nor willing to carry out the Supervisor function and accordingly had no entitlement to pay and therefore had not suffered any unlawful deduction from wages from that point onwards. She did not, however, make findings about the period immediately prior to that between 1 September 2010 and 8 October 2010 when the period of paid suspension was lifted and the Claimant was placed on unpaid leave because his PCO licence had been revoked. That gave rise to one of the remitted questions following the appeal before HHJ Hand QC.

6. As an alternative to the finding that the Claimant had resigned, Employment Judge Balogun held that the Respondent’s letter to the Claimant of 26 September 2011 was a dismissal for some other substantial reason and was based on the Respondent’s genuine belief that the Claimant had resigned. She found this unfair as the Respondent should have made clear to the Claimant that unless he made his intentions known, his employment would be at risk of termination. However, the Claimant had wholly contributed to his dismissal by refusing to return to work and by failing to make his intentions known when asked to do so. On that basis she held it would be just and equitable to reduce both basic and compensatory awards by 100 per cent. The question of contributory conduct forms the second question remitted following the first appeal.

7. The matter came before Employment Judge Milton on remission. Following a three day hearing, by a Decision with Reasons promulgated on 7 August 2014 the Employment Judge held on the remitted issues that there was a 100 per cent chance that the Respondent would have been entitled to dismiss the Claimant fairly with no basic or compensatory award on the grounds of justice and equity. The Employment Judge did not expressly address the question of unlawful deduction from wages during the period of 1 September to 8 October 2010, but he made findings of fact under a heading “Unlawful Deduction of Wages” in his Reasons. An application for reconsideration was refused by Employment Judge Milton in a further Judgment with Reasons.

8. Employment Judge Milton’s Judgments are challenged by the Claimant, who was granted permission to amend his grounds of appeal prepared by Ms Mallick under ELAAS. Permission was given by HHJ Peter Clark following a hearing on 23 August 2015. Ms Mallick has appeared pro bono for the Claimant on this appeal, and I am particularly grateful to her for the focused submissions she made on his behalf.

9. There are three grounds of appeal. All are resisted by the Respondent.

The Appeal

Unlawful Deductions

10. I deal first with ground 2 and the question of unlawful deduction from wages. Ms Mallick points to the absence in the section of the Judgment headed “Judgment” of any reference to the unlawful deduction from wages claim. She submits that the Judge accepted at paragraph 36 that a payment for the short period of five to six weeks between September and October 2010 could have been made but then fails to follow through and reach any conclusion on the Claimant’s entitlement to compensation in respect of that claim. Against that Ms Rowley contends that although the Judgment does not expressly address the questions of unlawful deductions, the necessary evidential questions were in fact addressed and all relevant findings were in fact made so that all that is missing are words to the effect, “Therefore, there were no wages properly payable and no unlawful deduction accordingly”.

11. Having reflected carefully on the Judgment and Reasons, I accept Ms Rowley’s submissions. Employment Judge Milton made findings of fact that have not been and cannot be challenged on this appeal, that address the evidential questions in respect of the unlawful deductions claim. First he found that the Claimant’s evidence, his submissions and his cross-examination all led to the conclusion that his evidence was “totally unworthy of belief” (paragraph 6). That meant that when there was a conflict of evidence between the Respondent’s witnesses (Mr and Mrs Kwame) and the Claimant, the Claimant’s evidence would not be or was unlikely to be accepted.

12. Secondly, he set out the sequence of consistent communications between the parties over the period August, September and October 2010, starting, by way of example, with an email from the Claimant to Mrs Kwame on 17 August 2010 in which he accepts inappropriate behaviour on his behalf that led to the charges, and an email dated 28 September 2010 in which the Claimant made clear that he had a “further reason as to why it was necessary to not come back to Excel after my leave” and making it clear that he did not wish to do so. There was other consistent correspondence, and ultimately Employment Judge Milton concluded that all communications between the Claimant and the Respondent were consistent with his clearly expressed stance that (i) he was not coming back to work; (ii) he was happy to assist the Respondent to find a replacement; (iii) he was disenchanted with working for the disabled community; and (iv) alternatively, he had found other work.

13. Employment Judge Milton considered what happened in the period thereafter and concluded that in the following eight to nine months the Claimant’s behaviour was and remained consistent with that position. In other words, he had stated that he was no longer interested in any work with the Respondent. That firm desire not to come back to work was confirmed by what the Claimant actually did and by the fact that he did not take the opportunity when he had it, to pay an additional fee to keep his licence alive in the period before the court hearing.

14. In light of those findings, which were based on evidence and which have not been challenged before this Employment Appeal Tribunal, Employment Judge Milton held at paragraph 26:

“26. I have therefore come to the conclusion that the Claimant was making it quite clear that, in effect, as soon as he was suspended he was not interested in returning to work for the [Respondent] for a number of obvious reasons which he expressed quite clearly and the matter was not pursued, perhaps as forcefully as it might have been, by management. …”

15. In other words the position on 1 September was no different to the position that pertained on 8 October. Just as on 8 October when the matter was discussed between him and representatives of the Respondent and the Claimant expressed himself to be unwilling to and did not wish to return to work, so too, the Employment Judge found, the position to be on 1 September. That meant, in circumstances where the Claimant was unwilling and would not have wished to return to work on 1 September that no wages could properly be due and no unlawful deduction could be treated as having been made.

16. Ms Mallick accepted that if there was evidence and findings supported by evidence to the effect that the Claimant was not willing to work in any position on 1 September then there could be no question of unlawful deduction from wages. I invited her to identify what was different about 1 September and why on a properly founded evidential basis, the Claimant would have adopted a different approach to the question of returning to work on 1 September than the approach he indicated in correspondence after that date and in the course of the meeting on 8 October.

17. Ms Mallick relies on two matters in response. First, at paragraph 9 of the Claimant’s witness statement he stated:

“… I was at all time [sic] willing to work for the Respondent in any role that did not require a PCO license [sic].”

Secondly, she relies on an email (dated 6 October 2010) on which the words “Sup8” appear at the top as an evidential basis that could and should have led the Employment Judge, had he properly considered this question, to find that the position was different on 1 September. I disagree with both points. The sentence at paragraph 9 was an assertion by the Claimant that he was at all times willing to work for the Respondent in any role not requiring a PCO licence. That assertion was plainly rejected by the Employment Judge, who found the Claimant not credible. The email headed “Sup8” is relied on as demonstrating that the Claimant was under some misunderstanding about what role he could take in the absence of necessary documents including his PCO licence. Particular reliance was placed by Ms Mallick on the following sentence:

“… My licence has been withdrawn, my movement limited, passport impounded, cannot change living place. [All] else has dis activated [sic] me as a person in all aspects of life. [Even] if one decide [sic] for an alternative work, documentary wise its [sic] impossible coupled with restricted time factor, disrespect and humiliation has been constant around me.”

18. Ms Mallick submits that this demonstrates that he did not understand that he could return to work irrespective of the failure to maintain his licence and that it was incumbent on the Respondent to make clear to the Claimant that he did not need his PCO licence to do the work that was being offered to him. That, she submits, is evidence that distinguishes the position on 1 September from that which pertained on 8 October.

19. I do not accept this submission. First, the Claimant’s own witness statement at paragraph 11 makes clear that his case before the Employment Tribunal was not that he misunderstood the offer that was made and did not realise that he could return to work without a licence. Rather, his case as stated at paragraph 11 is that:

“At no time after my suspension from work on 14 July 2010 … did the Respondent offer me alternative work as a Vehicle Supervisor or on 8 October 2010 or at any time as I was never offered this post or another post that does not need a PCO license [sic].”

Far from suggesting that he misunderstood the position, the Claimant was saying, quite clearly, that no such offer was ever made. That conflicted with the evidence given by Mrs Kwame and the documentary evidence in the case and was rejected by the Employment Judge. Moreover, the email titled “Sup8” does not reflect the construction Ms Mallick seeks to place on it. Far from suggesting that he could not return because his documents had been removed, the Claimant was saying that alternative work was impossible for him for reasons that included restricted time, disrespect and humiliation. Those were reasons that appeared in other documents and made clear his desire not to return to work for the Respondent.

20. Employment Judge Milton did address the evidential issues required of him in relation to the unlawful deduction of wages claim and came to a clear conclusion that the Claimant was not interested in returning to work for the Respondent from the moment he was suspended and that this position did not change. The findings are there, though shortly stated, and with great respect to the Employment Judge, not as well expressed as they should have been. However, I detect no error of law in the Judge’s approach, and this ground of appeal accordingly fails.

Contributory Conduct

21. Ground 1 challenges the Judge’s conclusion that there was a 100 per cent chance that the Claimant would have been dismissed fairly as erroneously based on Polkey, which was no part of the remitted hearing, and for failing accordingly to address questions of contributory fault under sections 122(2) and 123(6) of the Employment Rights Act 1996, which was part of the remitted hearing’s consideration. As Ms Mallick submits, the legal basis for a Polkey reduction or adjustment to the compensatory award is different to that available in respect of contributory conduct. Moreover, a Polkey reduction can be made only in relation to the compensatory award and not in relation to a basic award. Evidence that is relevant to a Polkey adjustment may not be the same as that relevant when assessing questions of contributory conduct. It is therefore important, as Ms Mallick submits, to maintain a clear line between the two different types of adjustment that may be in issue in any case.

22. I also agree with Ms Mallick that it is well established that for conduct to justify an adjustment under section 123(6) it is necessary to identify first, what conduct is relied on as culpable or blameworthy; second, whether that conduct caused or contributed to the dismissal; and third, whether it is just and equitable to reduce the award for blameworthy conduct having regard to that finding. Considerations under section 122(2) are similar, although the discretion under this provision is wider and relates to any conduct on the employee’s part that occurred before the dismissal, whereas a reduction under section 123(6) depends on the conduct in question being shown to have caused or contributed to the dismissal. For conduct to be culpable or blameworthy it need not amount to a breach of contract but can include conduct that is unreasonable in all the circumstances. The most typical form of blameworthy conduct is conventional misconduct, but the subsection can cover wider forms of conduct, for example where a situation is aggravated by an employee’s behaviour and leads to dismissal. As Ms Mallick submits, there must be a causal link between the conduct and the dismissal but Tribunals are entitled to take a broad view of an employee’s conduct and to consider behaviour that although not relating to the main reason for dismissal nevertheless plays a significant or material part in it. What is required is to identify the action of the employee that has to some extent contributed to the dismissal.

23. So far as the amount of any reduction is concerned, once contributory fault has been established the amount of the reduction is a matter of fact and degree for the Tribunal to determine. In a case where a Tribunal concludes that the employee is solely to blame for the dismissal, an adjustment of 100 per cent is likely to be appropriate, absent some compelling reason to the contrary, and in such a case it is likely to be appropriate (again absent compelling reasons) to make the same reduction in respect of both compensatory and basic awards. As Ms Rowley submits, where the facts justifying a 100 per cent reduction in respect of the compensatory award apply equally to the basic award there can be no difficulty in making the same reduction in respect of that award. Tribunals have a wide discretion in the assessment of contributory conduct, and such an assessment will rarely be interfered with on appeal.

24. Employment Judge Milton dealt with the reduction in basic and compensatory awards, reducing them both by 100 per cent but did so, as Ms Mallick submits, by reference to Polkey and not by reference to the questions to be answered in relation to contribution. Although a valiant attempt by Ms Rowley was made to argue the contrary in writing, she did not pursue that orally, and, in my judgment, she was right not to do so. Nevertheless, the fact that a legal error has been identified does not necessarily mean that the case must be remitted. The question for me, as Ms Rowley submits, is whether the error is a material one. If I am satisfied, that the error did not materially affect the result, which flows inevitably from the Employment Judge’s findings, then the decision can stand in any event (see Jafri v Lincoln College [2014] EWCA Civ 449).

25. In light of that submission, I turn to consider the findings made both by Employment Judge Balogun (so far as relevant to the question of contributory conduct) and Employment Judge Milton in order to see whether the error of law made by Employment Judge Milton is a material error and affects the result. Employment Judge Balogun held that the Respondent’s letter to the Claimant of 26 September 2011 was a dismissal for some other substantial reason based on the Respondent’s genuine belief that the Claimant had resigned. The dismissal was unfair, however, as the Respondent should have made clear to the Claimant that unless he made his intentions known, his employment would be at risk of termination. The question for Employment Judge Milton on remission was whether, and if so to what extent, the Claimant caused or contributed to that dismissal by blameworthy conduct. Employment Judge Milton’s conclusions are set out at paragraphs 35 and 36 as follows:

“35. I was referred by Ms Russell [for the Respondent below] to the decision of Kent County Council v Knowles (in which I in fact was the Judge sitting in the Ashford Tribunal). That was in my judgment and finding a completely different situation. On the facts which I have found (and in respect of which for the major period as well my colleague and the EAT have also found) the Claimant could not be available for work because he was unable to drive and he had indicated, so far as the facts are concerned, that he was not interested in doing a limited amount of vehicle supervisor work. The situation therefore is completely different.

36. In my judgment and finding in this case the Claimant was placing, in effect, invalid conditions on his returning to work i.e. a payment of the whole outstanding sum and as a matter of very high probability he would have stood by those conditions even if there had been an offer of a modest payment for the period of 5/6 weeks in September/October 2010. He was treated as having resigned and that finding has been overturned. I find, however, that if the Respondents [sic] had gone through the process of a formal hearing and inviting the Claimant to consider his position and reengagement on terms that he simply receive a modest payment there was a 100% chance that he would have been fairly dismissed on that basis.”

26. Although Employment Judge Milton approached the evidence on the basis of Polkey rather than on the basis of a reduction for contributory fault, he made important findings based on the evidence as follows:

(i) The Claimant was unable to drive for a significant part of the period leading up to the September 2011 letter as a result of his own blameworthy conduct that led to the removal of his licence. The Claimant himself accepted blameworthy conduct, and Employment Judge Milton found that the fact that the Claimant was subsequently acquitted did not detract from that position.

(ii) The Claimant was not interested in carrying out Vehicle Supervisor work and made that plain to his employer when work was offered on this basis. The Claimant’s own email dated 28 September 2010 supports this finding, providing reasons why it was necessary for him not to return to the Respondent. It was also based on findings at paragraph 15, where the Employment Judge referred to the email titled “Sup8”, and at paragraph 16, which concerned correspondence with the Claimant referring to the meeting that took place on 8 October 2010 in which Mrs Kwame said to the Claimant that she had:

“… advised Miguel and Dick of your decision to resign with immediate effect and they agree with me that since you are now without a PCO licence we should continue to offer you alternative employment with us until your Court case is resolved. I have informed them that you have rejected the offer of Vehicle Supervisor without driving our passengers and your reason for that decision i.e. that you are not available for work as you have [a] job elsewhere and that you no longer wish to work with disabled people. …”

It is also based on the important finding at paragraph 19 that there was a meeting on 8 October in which the offer of alternative employment was made, but the Claimant refused the offer.

(iii) When the Claimant’s licence was reinstated the Respondent invited the Claimant to return to work in his substantive role. The Employment Judge described this at paragraph 30 as another area of head-on conflict of evidence. He recorded the fact that the Respondent stated that on a number of occasions it had telephoned the Claimant and he had not answered. His complicated explanation, as the Employment Judge described it, was that in general he did not communicate with the Respondent because he had received an express instruction via the suspension letter not to contact the Respondent. The Employment Judge said he found this not to be worthy of belief.

(iv) The Claimant made clear that he did not wish to return and although he said in terms that he did not wish to return he was nevertheless invited to consider his position following a meeting on 8 August 2011 and to indicate within seven days whether or not he wished to return to his substantive role. He did not respond within those seven days. In late August and September 2011 letters sent on his behalf by the Law Centre demanded payment of wages between 1 September 2010 and 8 August 2011 as a pre-condition for returning. Those letters were found by Employment Judge Milton to have contained an unreasonable and invalid pre-condition, and, moreover, Employment Judge Milton found that the Claimant would not have returned as a matter of high probability, even if he had been offered the more modest payment in respect of the period of five to six weeks between September and October 2010.

Those are findings that there was culpable conduct by the Claimant which caused his dismissal.

27. Ms Mallick submits that although those findings of fact were made by the Judge nevertheless he closed his mind to questions of contributory conduct and to factors that existed that were a mental impediment to the Claimant’s return but not blameworthy. She relies on the “Sup8” email which revealed a misunderstanding by the Claimant of the offer being made, and was not addressed by Employment Judge Milton. I do not accept that the email was not addressed. It was expressly referred to by Employment Judge Milton at paragraph 15 of the Judgment. Moreover, as I have already indicated, I do not accept her construction of that email. It does not suggest any lack of understanding or mental impediment to return. Rather, it says in clear terms that the Claimant would not return for the various reasons he gives.

28. In any event, as I have already indicated, the Claimant’s witness statement made no assertion that he did not understand the terms that were being offered to him and did not realise that he could return to work notwithstanding removal of his PCO licence. Rather than saying that he was confused or misunderstood the offer, he says in terms that no such offer was ever made. That of course was rejected by Employment Judge Milton on the evidence, and the appeal cannot go behind that finding.

29. Secondly, Ms Mallick relies on paragraph 36 of the Judge’s Reasons, where the Judge referred to the fact that a more modest payment could have been made. She submits that passage reflects fault on the part of the Respondent so that a 100 per cent reduction in both awards could not be justified. Again, I do not accept that submission. Read fairly and as a whole, paragraph 36 reflects a consideration by the Employment Judge of what might be a potential procedural failing by the Respondent. The Judge found that the Respondent did not offer to make any payment on the more modest basis for the five to six weeks from 1 September to 8 October 2010. He was nevertheless satisfied that on the facts he had already found, an offer of payment on that basis would not have been accepted by the Claimant “as a matter of very high probability”. In other words, the Claimant would have stood by the unreasonable or invalid conditions he had placed on any return to work, even if a modest offer of payment had been made, and would not have returned to work.

30. No other evidence or material was identified by Ms Mallick that might justify a conclusion that there was fault on the part of the Respondent that contributed to this dismissal.

31. Accordingly, on the findings of Employment Judge Milton, there was blameworthy conduct of the Claimant, and that blameworthy conduct was the sole factor resulting in this dismissal. Any procedural failing on the part of the Respondent was, on his findings, peripheral and not causative of the dismissal in any way. Thus whilst Employment Judge Milton expressed himself by reference to the chance of a fair dismissal rather than by reference to questions he should have posed in relation to contributory conduct, his findings of fact and his ultimate conclusions are clear. Read as a whole, the logic of his findings of fact - which apportion no fault to the Respondent and 100 per cent fault to the Claimant - is that this was one of those rare cases in which a finding of 100 per cent contributory conduct in respect of both basic and compensatory awards was justified. That, as I have indicated, is because the Claimant’s conduct was the sole reason for this dismissal, which would not otherwise have occurred. This was an employer prepared to take the Claimant back on a reduced duties basis in the period during which his PCO licence had been removed and when that licence was reinstated, was prepared to take him back to his full substantive duties. Despite that reasonable approach, the Claimant made consistently clear that he had no wish to and would not return to work in any role offered. The Respondent sought to discuss these matters in meetings and to give the Claimant time to reflect on his position, but the Claimant unreasonably failed to respond, then placed unreasonable conditions on his return. The findings demonstrate that it was the Claimant’s blameworthy conduct in those respects that wholly caused this dismissal. Ms Mallick has identified no evidence or finding that the Respondent’s conduct was causative of the dismissal at all.

32. Accordingly, this is a rare case where I have concluded that the misdirection of law by Employment Judge Milton in addressing these questions by reference to Polkey rather than contributory conduct is not material to the ultimate conclusion he reached. The conclusion he reached that there should be a 100 per cent reduction in both awards flows inevitably from the Employment Judge’s findings, and was open to him on the evidence. This ground of appeal, accordingly, fails.

33. The third ground challenges the reconsideration decision, but, in light of my conclusions on grounds 1 and 2, this ground is academic, and I do not therefore address it further.

34. For all those reasons, whilst justifiable criticism has been made on the Claimant’s behalf of the Judgment and Reasons under appeal, the conclusions to which Employment Judge Milton ultimately came were open to him. They are supported by evidence and flowed inevitably from the findings of fact. They cannot accordingly be disturbed on this appeal. The appeal therefore fails and is dismissed.

United Kingdom Employment Appeal Tribunal