Wedge v Hilditch Martin Services Ltd [2014] NIIT 949

THE INDUSTRIAL TRIBUNALS

CASE REF: 949/14

CLAIMANT: Mark Wedge

RESPONDENT: Hilditch Martin Services Ltd

DECISION

The decision of the tribunal is that:-

(i) the tribunal makes a declaration that the respondent has made an unauthorised deduction from the wages of the claimant in the sum of £365;

(ii) the tribunal orders the respondent to pay to the claimant the sum of £365.

Constitution of Tribunal:

Employment Judge (sitting alone): Employment Judge Drennan QC

Appearances:

The claimant did not appear and was not represented.

The respondent was represented by Mr Ian Martin, Managing Director of the respondent.

Reasons

1.1 The claimant presented a claim to the tribunal on 21 May 2014 in which he made a claim for 12 days’ pay, which he claimed was due and owing to him in the period from 1 March 2014. The respondent presented a response to the tribunal on 26 June 2014, in which the respondent denied liability for the said sum claimed by the claimant.

1.2 A Notice of Hearing was issued to the parties on 11 June 2014. By letter dated 22 June 2014, the claimant informed the tribunal that he would not be attending the hearing of this matter; but he provided to the tribunal written representations for consideration by the tribunal at the hearing, pursuant to Rule 14 of the Industrial Tribunals Rules of Procedure, contained in Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (the Rules of Procedure).

1.3 I heard oral evidence in this matter from the respondent’s representative, Ian Martin, the Managing Director of the respondent. Before determining this matter, as set out elsewhere in this decision, I considered the written representations made by the claimant, as set out above.

2.1 In so far as relevant and material for the determination of the claimant’s claims, I made the following findings of fact, as set out in the following sub paragraphs.

2.2 The claimant was employed by the respondent from in or about February 2010 until on or about 13 June 2014, when his contract of employment was terminated by reason of redundancy.

2.3 At no time material to these proceedings, was the claimant given a written contract of employment. However, there was a company booklet, to which all employees had access, which contained the following paragraph:-

“12 Layoff and/or Short Time

The employer reserves the right to lay the employee off from work or put the employee on short time working where the employer cannot provide work. In such circumstances the employee shall not be entitled to his/her normal contractual rate of pay for the time not worked but may be entitled to a guaranteed payment in accordance with statute.”

Mr Martin was unable to state, in evidence, the claimant had been provided with the booklet or indeed had ever seen or had sought to access the booklet. Mr Martin accepted there was no reference to the booklet in any contractual document provided to the clamant by the respondent.

2.4 It was not disputed by the respondent that all times material to this matter, although there was no written contract of employment, the claimant was a full time employee and was normally required to work, in accordance with his contract of employment, five days a week.

2.5 On or about 28 November 2013, the claimant and all other employees of the respondent were warned, at a staff meeting, by Mr Martin that the respondent was experiencing financial difficulties and in particular the level of profit earned by the respondent was reducing and that it would be necessary for the respondent to reduce costs and that there was a possibility that employees would have to be made redundant in the future. Unfortunately, the level of business of the respondent continued to deteriorate. On or about 13 February 2014, Ms L Burns, the local manager of the respondent in Northern Ireland, warned staff of the deteriorating situation and that the business could close and/or there would require to be redundancies if the situation did not improve. On or about 20 February 2014, Mr Martin met all the full time staff, including the claimant, and informed them of the continuing lack of sales and the deteriorating financial situation of the respondent. In particular, he also spoke individually to the claimant and warned him that it was possible that he would require to go on a four day week at the beginning of March 2014, on a temporary basis, until the level of work improved. If it did he would be restored to his normal five day week. He informed him that, in any event, the respondent would review the position by at or about the end of May 2014. The claimant did not raise objection and stated he fully understood why such a measure might be required in the circumstances. By letter dated 27 February 2014, Ms Burns wrote to the claimant stating:-

“As of 1 March 2014 your working week will be temporarily reduced to a four day week. Your total hours per week will be 27½ hours. Your gross pay per annum will be £11,326.46.”

For the remainder of the period of his contract of employment until on or about 13 June 2014, the claimant was not paid for the subsequent 12 days, when he was not required to work by the respondent, as he was on the said four day week. Mr Martin accepted that, subject to liability, the claimant had lost 12 days’ pay, arising from the said four day week. Subsequently, in correspondence, the claimant challenged the failure of the respondent to pay him on the basis of a five day week. In particular, in a letter dated 11 March 2014, the claimant wrote to the respondent stating, inter alia,

“.... As you are aware I have been spoken to reference my working days going from a five day week to a four day week and I would like to request further explanation as I have some concerns that I am not happy with.

I realise that I, am the only driver/store man at Belfast but the main reason for the four day week was a decline in orders which I fully understand but why is this only imposed on me at Belfast at this time. I feel that a general decline would affect all employees not currently on short time working.

There was no consultation, discussion or notice apart from at the meeting which I was told it was happening. I have no written contract or terms and conditions but due to custom and practice it shows that I have been a full time employee since I started and this is a change allow (sic) I have had to accept this. I did not agree to it. (Tribunal’s emphasis)

I have asked for and got a letter from the company stating my change in hours and gross pay for Tax Credits Office and have further asked for my holiday entitlement to be confirmed.

This letter states that this is temporary, for further clarification is there a date in the future for a review?”

....”

By letter dated 31 March 2014, Ms Burns replied to the claimant and gave him confirmation of his holiday entitlement but also stated:-

“A review in your situation will take place no later than 1 June 2014.”

In a further letter dated 21 May 2014, the claimant wrote to the respondent, stating:-

“.... The letter I received in return, some of my issues were covered and some were not. As I never had a written contract or terms and conditions I am assuming that the company has a grievance procedure. This is my grievance under this procedure; I have no written contract from the company but due to custom and practice I have a contract in some form. Since I started I have worked five days and got paid for five days.

So altering my days from five to four on 1 March 2014 without agreement and also no consultation, discussion or notice this is a breach of contract.

So from the above date these deductions each month are an unlawful deduction in wages. Therefore this grievance is me seeking recovery for these reductions. To date from 1/3/14 there has been 12 days’ total - 10 normal working days and 2 bank holidays (May Day and Easter Monday). However this may alter depending on date I will be made redundant. Secondly no explanation was given by the company to me why I was the only employee at Belfast affected by this change on 1/3/14.

....”

By a notice issued by the respondent confirming the final payments to be made to the claimant on the termination of his employment and signed by the claimant on 29 May 2014, it was confirmed that the claimant received a statutory redundancy payment, notice pay and holiday pay but also, in particular, in so far as relevant to the determination of this matter, -

“Statutory guarantee pay - 5 days over 13 weeks since 1 March - £125”

3.1 Relevant legislation and law

Employment Rights (Northern Ireland) Order 1996 (‘the 1996 Order’) provides:-

Article 45 - 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 Article “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.

Article 60 - Right to guarantee payment

(1) Where throughout a day during any part of which an employee would normally be required to work in accordance with his contract of employment the employee is not provided with work by his employer by reason of-

(a) a diminution in the requirements of the employer’s business for work of the kind which the employee is employed to do, or

(b) any other occurrence affecting the normal working of the employer’s business in relation to work of the kind which the employee is employed to do,

the employee is entitled to be paid by his employer an amount in respect of that day.

(2) In this Order a payment to which an employee is entitled under paragraph (1) is referred to as a guarantee payment.

Article 63 - Limits on amount of an entitlement to guarantee payment

(1) The amount of a guarantee payment payable to an employee in respect of any day shall not exceed £25.00 (relevant cap from 16 February 2014)

Article 64 - Contractual remuneration

(1) A right to a guarantee payment does not affect any right of an employee in relation to remuneration under his contract of employment (“contractual remuneration”).

(2) Any contractual remuneration paid to an employee in respect of a workless day goes towards discharging any liability of the employer to pay a guarantee payment in respect of that day; and, conversely, any guarantee payment paid in respect of a day goes towards discharging any liability of the employer to pay contractual remuneration in respect of that day.

(3) For the purposes of paragraph (2), contractual remuneration shall be treated as paid in respect of a workless day-

(a) where it is expressed to be calculated or payable by reference to that day or any part of that day, to the extent that it is so expressed, and

(b) in any other case, to the extent that it represents guaranteed remuneration, rather than remuneration for work actually done, and is referable to that day when apportioned rateably between that day and any other workless period falling within the period in respect of which the remuneration is paid.

Article 182 - Meaning of “lay-off” and “short-time”

(1) For the purposes of this Part an employee shall be taken to be laid off for a week if-

(a) he is employed under a contract on terms and conditions such that his remuneration under the contract depends on his being provided by the employer with work of the kind which he is employed to do, but

(b) he is not entitled to any remuneration under the contract in respect of the week because the employer does not provide such work for him.

(2) For the purposes of this Part an employee shall be taken to be kept on short-time work for a week if by reason of a diminution in the work provided for the employee by his employer (being work of a kind which under his contract the employee is employed to do) the employee’s remuneration for the week is less than half a week’s pay.

4.1 As set out previously, the claimant was paid his statutory guarantee payment of £125.00 by the respondent, pursuant to Article 60 of the Employment Rights (Northern Ireland) Order 1996. Subject to liability in this matter there is no dispute that the sum was properly payable, pursuant to the relevant statutory provisions up to the maximum of five days at £25 per week. Undoubtedly there was diminution in the requirements of the employer’s business at the relevant time and he would normally have been required to work the five days, rather than the four days, in accordance with his contract of employment. It was also made clear to the claimant, both orally and in writing, that the period of the four day week was temporary and would be reviewed on or before 1 June 2014. (See further the decision of the Court of Appeal in the case of Abercrombie -v- AGA Range Master Ltd (2013) IRLR953). I am satisfied, on the evidence before me, that prior to the imposition of the four day week, the claimant was consulted and, arising from the consultation, he fully understood why it had been imposed. In the absence of a claim for unlawful discrimination, it was not necessary for me to consider further the claimant’s allegation that he was the only employee in the Belfast office upon whom this reduction in the normal working week was imposed.

4.2 I am satisfied that during the relevant period from 1 March 2014 until the termination of the claimant’s contract of employment by reason of redundancy, he was on “short time working” as defined in Article 182 of the Employment Rights (Northern Ireland) Order 1996 when he was required to work the four day week. Indeed, as set out in the claimant’s letter of 11 March 2014, he accepts that, at the relevant time, he was on short time working. As confirmed in Harvey on Industrial Relations and Employment Law Section E para 1943:-

“The employer has no unilateral right to impose a period of short time working. He needs to be able to point to a term of the contract, express or implied, which allows him to vary or reduce the normal working hours. Failing that, any attempt to impose a period of short time working will be a breach of contract, and probably a repudiatory breach to boot. If there is a repudiatory breach, the employee may either quit, claim constructive dismissal, and seek redundancy payment on the basis that he is dismissed by a reason of redundancy. (Millar -v- Hamworthy Engineering Ltd (1986) IRLR461) or else he may affirm the continued existence of the contract, remain in employment for the time being, and then utilise the time LOST provisions.

4.3 These LOST provisions are contained in Articles 183-187 of the Employment Rights (Northern Ireland) Order 1996. These are somewhat technical, not only in relation to time limits but also in relation to the giving of relevant written notice of intention to claim. On the facts as found by me, as set out above, I am not satisfied that the claimant, in his said correspondence to the employer, activated, at any time, the said time LOST provisions.

4.4 The claimant did not terminate his contract of employment and claim constructive dismissal on the grounds that the respondent, by putting him on a four day week, had breached his contract in such a way that constituted a repudiatory breach entitling him to terminate his contract in response to the said breach.

4.5 It was therefore necessary for me to first consider whether the claimant’s contract of employment entitled the respondent to be placed on the four day week or whether to do so was a breach of the claimant’s contract of employment. Unfortunately, at no time was the claimant provided by the respondent with a written contract of employment. If he had been, many of the difficulties that have arisen in these proceedings would not have occurred. It was not disputed by Mr Martin he was a full time employee of the respondent who was normally required to work a five day week under his contract of employment. The respondent’s booklet, which contains a term relating to the ability of the employer to place an employee on short time working, where the respondent cannot provide work, is not, without more, a term of the claimant’s contract of employment. Mr Martin was unable to say, in evidence, that the claimant had been provided with the said booklet or had seen or had sought to access it. There was no evidence it had been incorporated by reference in some other contractual document provided by the respondent to the claimant. Further, I am not satisfied, on the evidence, that the claimant at any time agreed to a variation of his contract of employment. The fact that the claimant did not object at the meeting, but merely indicated that he understood why the four day week had been imposed does not constitute, in my judgment, an agreed variation of the contract of employment. Indeed, this was further confirmed by the terms of the claimant’s letter of 11 March 2014, when he made it clear that he did not agree to the imposition of a four day week, which had been imposed by his employer, without his agreement. Clearly, the claimant wanted to remain in employment if at all possible; and, as stated previously, he did not terminate his contract of employment and claim constructive dismissal. Indeed, if he had done so, I am not satisfied that the breach of his contract by his employer would have necessarily constituted, in the circumstances, a repudiatory breach in the circumstances. Further, he did not seek to activate the time LOST provisions under the 1996 Order. I accept the claimant was consulted prior to the imposition of the change to his contract of employment. Clearly, the respondent, in the circumstances should have obtained the claimant’s consent to the said variation of his contract, before imposing same. He did not do so. I am not aware of any previous imposition of short time working on the claimant by the respondent, which, if it had occurred, might have allowed me to consider that there was an implied term allowing the respondent to impose short time working by custom and practice.

4.6 It was necessary for me to consider whether the claimant, by continuing to work for the respondent, in the above circumstances, in some way affirmed the contract/waived any such breach of the contract of employment. I consider that it is difficult to find that the claimant affirmed the contract and/or waived the breach by reason of his letter of 11 March 2014, when it is quite clear that he was stating that he did not agree to the four day week but has had to accept it in the circumstances. As Harvey on Industrial Relations and Employment Law paragraph 524 makes clear, there is no fixed time with which an employer must make up his mind. A reasonable period is allowed. It is apparent that the claimant made his position clear in his letter of 11 March 2014, which was within a very short period following the imposition of the four day week and in circumstances when the first deduction from his pay, to reflect the change from a five day week to a four day week, was not due until 28 March 2014, the date of his next pay statement. In the circumstances, I am not satisfied that it could be shown that the claimant affirmed the contract and/or waived the breach. Even if I am wrong and the claimant can be said to have affirmed the contract, at common law, he would still retain the right to claim from the respondent damages for the said breach of contract (see further Harvey on Industrial Relations and Employment Law D1 para 52201).

5.1 In the circumstances, I am satisfied the claimant was entitled to be paid for the said 12 days, which were properly payable to him under his contract of employment. To fail to do so was in breach of his contract of employment. Mr Martin did not dispute the claimant’s calculation, of the value of his said claim, as set out in his written representations, of £653.40 (12 days x 54 x £45) less tax and national insurance (i.e. gross). Doing the best that I can, on the limited information before me, I have concluded the nett loss to the claimant was £490 less the sum of £125 (statutory guarantee payment - Article 64(2) of the 1996, which requires to be taken to account), namely £365.

5.2. I therefore make a declaration that the respondent has made an unauthorised deduction from the wages of the claimant in the sum of £365 and I order the respondent to pay to the claimant the sum of £365.

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

Employment Judge

Date and place of hearing: 8 July 2014, Belfast

Date decision recorded in register and issued to parties:

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You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Wedge v Hilditch Martin Services Ltd [2014] NIIT 949_14IT (11 July 2014) URL: http://www.bailii.org/nie/cases/NIIT/2014/949_14IT.html Cite as: [2014] NIIT 949_14IT

Industrial Tribunals Northern Ireland Decisions