THE INDUSTRIAL TRIBUNALS

CASE REF: 177/10

CLAIMANT:                   	Andrew Lawrenson

RESPONDENT:             	John Millen t/a Indulgence Kitchens &
Bathrooms

DECISION

The decision of the tribunal is that the claimant succeeds in his claim for unauthorised deductions from wages and outstanding expenses and it awards him a total of £5,648.75, which includes an enhancement of £1,882.92.

Constitution of Tribunal:

Chairman (sitting alone):   Mr W A Palmer

Appearances:

The claimant represented himself.

The respondent did not appear and was not represented.

The Claim

1.  	The claimant claimed unauthorised deductions in respect of unpaid wages (including commission earned and outstanding).  He also claimed expenses incurred in connection with his employment.

Evidence

2.  	The claimant gave evidence and also provided the tribunal with a number of documents.

Response to Claimant’s Claim.

3.  	No response to the claimant’s claim was presented.

Findings

4.  	The claimant was employed by the respondent, as a kitchen design consultant, for 8 weeks, from 21 September 2009 until 13 November 2009.  There was no written contract of employment.  It was agreed orally, between the parties, that the claimant would receive a wage of £24,000 gross per annum plus commission on sales.  It was also agreed that the claimant would receive expenses, including a mileage allowance.  No wages were paid to the claimant in respect of the 8 weeks during which he was employed by the respondent.  Commission accrued of £263 gross is outstanding, as is £878.63 for expenses.  The commission outstanding relates to premises at sites 1 and 15 Myrtle Grove.  The expenses are in respect of a Packard Bell computer (£479.99), computer accessories, (£102.96), building site clothing necessary for visiting building sites(£34.64), key cutting (£10) and mileage (£251.04)

5.  	The claimant spoke to the respondent when he started work and with the agreement of the respondent, bought articles necessary for him to carry out his contractual duties as a consultant, namely, the computer and accessories, the clothing and the keys.  The respondent agreed to reimburse the claimant.  The claimant did not receive reimbursement.  I am satisfied that these outlays fall under expenses and am also satisfied that the outlays were outstanding on termination of the contract of employment.  The mileage expenses were also outstanding at this time, namely, at the termination of the employment contract.

6.  	The claimant handed a grievance letter to the respondent on 17 November 2009.  The respondent glanced at the letter and said to the claimant, “What is this?”  The claimant said that it was a grievance letter and the respondent said, “That means nothing”.  The respondent then tore up the grievance letter in the claimant’s presence.  No grievance meeting was arranged or held.  The respondent was wholly to blame for the failure to hold a grievance meeting.

The Statutory Provisions

Wages and Commission

7.  	Article 45 of the Employment Rights (Northern Ireland) Order 1996 (“the Order of 1996”) provides, with certain exceptions, which are not relevant in this instance, that an employer, “shall not make a deduction from the wages of a worker employed by him”.  Article 3 (3) (a) of the Order of 1996 provides, inter alia, that a “”worker means an individual who has entered or works under….a contract of employment”.  Article 59 (1) (a) of the Order of 1996 provides that “wages” includes any commission.  Article 59 (2) (b) of the order provides that “wages” do not include, “any payment in respect of expenses incurred by the worker in carrying out his employment.”

Expenses (Breach of Contract)

8.  	The tribunal has jurisdiction, under Article 3 of the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994, to determine this part of the claim.

Decisions and Awards

Wages and Commission

Wages

9.  	I find that the claimant’s claim for unpaid wages to be well founded and so declare and I order that the respondent pay to the claimant £2,695.20 under this subhead, calculated as below.

	Agreed salary was £24,000 gross per annum, which is £461.54 per 	week.

	The net salary would have been £336.90 per week.

	8 weeks @ £336.90 amounts to £2,695.20.

Commission

10.  	I find that the claimant’s claim for commission well founded and so declare and I order that the respondent pay to the claimant £192 under this subhead, calculated as below.

	Amount of outstanding commission is £263 gross.

	Amount after deductions would have been £192.

Expenses (Breach of Contract)

11.		With regard to the expenses claimant, I award the claimant £878.63. 

12.  	The total award, prior to enhancement is £3765.83.

Enhancement

The Relevant Statutory Provisions

13.  	Article 17 (1) of the Employment (Northern Ireland) Order 2003 (the Order of 2003) provides as follows:

	“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.”

	In Schedule 2 the following 2 entries appear:

	“Article 55 of the Employment Rights (Northern Ireland) Order 1996 (NI 16) (unauthorised deductions and payments)”, and

	“The Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 (SR 1994/308) (breach of contract and termination)”

14.  	Article 17 (3) of the Order of 2003 provides, insofar as relevant, 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 of the statutory procedure was wholly of mainly 	attributable to failure by the employer to comply with a requirement 	of the procedure,

	it shall…… increase 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, increase it by a further amount, but not so as to make a total increase of more than 50 per cent.”

15.  	Article 15 (1) of the Order of 2003 provides as follows,

“Schedule 1 (which sets out the statutory dispute resolution procedures) shall have effect”

Part 11 of Schedule 1 sets out the statutory grievance procedures.

16.  	Regulation 6 (1) of the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004 provides that the statutory grievance procedures apply, ”in relation to any grievance about action by the employer that could form the basis of a complaint by an employee to a tribunal under.......a jurisdiction listed in Schedule 2 [to the Order of 2003]”

	In light of the statutory provision set out at paragraph numbered 14 above, I must enhance the awards by at least 10 per cent and I have a discretion to increase the enhancement to a figure not in excess of 50 per cent, if I consider it just and equitable to do so in all the circumstances.

17.	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.”

18.  	The respondent did not present a response to the claimant’s claim.  As a result, he was not entitled to take part in the proceedings: I did not hear evidence from him as to whether or not he was aware of the statutory grievance procedures.  The approach that I take in determining his knowledge of the existence of the procedures is that I am not required, in the circumstances, to give him the benefit of doubt (see paragraph numbered 17 above).  I am satisfied, therefore, on the balance of probabilities, that at the relevant time the respondent was aware of the procedures.  I also find, by a different route, that the respondent was, on the balance of probabilities, aware of the procedures.  The respondent’s reaction to the receipt of the grievance letter indicates, to me, the likelihood of awareness.  Also, by November 2009, the procedures had been in existence for over 4 years and, I consider, that it is more likely than not, after that length of time, that the respondent would have been aware of them.

19.  	Having considered the matter carefully, I take the view that the respondent adopted a contemptuous disregard of the procedures.  In the circumstances, I enhance the awards by 50 per cent, as I consider it just and equitable to do so.  I am not aware of any factor that would lead me to reduce this increase.

                                     Total Award made

                                     Total award prior to enhancement                                £3,765.83

                                     Enhancement 50%                                                        £1,882.92

                                     Total                                                                             £5,648.75

20.  	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: