THE INDUSTRIAL TRIBUNALS

 CASE REF:  2303/10

CLAIMANT:		Patrick Barton

RESPONDENTS:	1.  Michael Young
2.  Younger Homes Ltd

DECISION

The Decision of the Industrial Tribunal is:

(i)	that the claimant was employed by Younger Homes Ltd and accordingly the first named respondent is dismissed from the proceedings;

(ii)	the claimant terminated his employment with notice to the second named respondent, after a qualifying period of “lay off” without pay and accordingly the second named respondent is liable to pay the claimant monies in respect of redundancy pay. The claim for notice pay, holiday pay and monies in respect of a bonus payment accrued in the financial year ending 31 December 2008 is dismissed. The second named respondent is ordered to pay to the claimant the sum of £1,140.00, 

Constitution of the Tribunal:

Chairman (sitting alone):		Ms M Sheehan

Appearances: 

The claimant was represented at hearing by Stuart Marriott from Magherafelt District Advice Services Ltd.  

Mr Michael Young, as director in Younger Homes Ltd appeared on behalf of the respondents.

The Issues

1.	The main issues for the tribunal to decide were (a) who was the claimant’s employer at the effective date of termination of employment; (b) was the claimant eligible for redundancy payment by reason of being laid off; (c) the amount of any redundancy payment due in respect of same; (d) was the claimant entitled to monies for breach of contract arising from non payment of a bonus payment arising from the tax year ending 31 December 2008, notice pay and holiday pay and if so the amount of same. 

The Facts

2.	The tribunal considered the claim form and the response filed by the second named respondent. There was also oral evidence given by the claimant, Gavin McFalone and Mr Michael Young. A bundle of documents was produced at the hearing by the claimant’s representative. The documents ranged from statements of main terms and conditions of employment for the claimant and various correspondence between the parties prior to and after the “lay off” period and notice of intention from the claimant to the second named respondent to claim a redundancy payment. A letter dated 11 April 2011 signed by Michael Young on behalf of Younger Homes Ltd was faxed and posted to the Office of the Industrial Tribunals and Fair Employment Tribunal stating that any holiday pay due and owing had been discharged in the sum of £917.07. Further the respondent accepted redundancy payment of £1,996.00 was still outstanding due to financial difficulties of the second named respondent and the only claim opposed by them was the claim for notice pay and a bonus payment for the financial year 2008 as there was a lack of evidence as to “precisely what was agreed and how this was to be calculated”. On the basis of the evidence received we make the following findings of fact.

3.	The claimant when employed initially at Younger Homes Ltd was aged 38 years of age. He was given a statement of main terms and conditions of employment which indicated his employer was the second named respondent. His employment commenced on 11 December 2006 as a contracts manager. By letter dated 18 June 2010 the claimant was placed on temporary lay –off for an initial eight week period. During this period the claimant was not provided with any work by the second named respondent. By letter dated 19 July 2010 the claimant gave notice to Younger Homes Ltd of his intention to claim a redundancy payment. At the same time he gave notice to terminate his contract of employment. He stated “Since I have worked at Younger Homes for three complete years, I am giving you three weeks notice which expires on 6th August 2010. 

4.	The claimant had received a letter of offer of employment which amongst other matters set out that a “period of notice of 1 month will be offered in the event of resignation”. The claimant had also received a written statement of terms and conditions of employment which included no express provision regarding “lay of” or “short time”. Other employees who were also before the tribunal at the same hearing as this claimant but employed at an earlier date to this claimant did have written statements of terms and conditions which included such a clause. There had been earlier “lay off” periods in 2009 and this claimant, like others, had remained in the second named respondent’s employment subsequent to the period of lay off. These “lay off” periods in 2010 followed on from changes in pay arrangements proposed in January 2010 by the respondent company as well as an agreed reduction in pay some years previously. The claimant had refused to accept the most recent proposed reduction in pay and the parties at hearing agreed that the claimant had been earning weekly £535.00 gross. 

5.	The claimant received no response from the second named respondent to his letter dated 19 July 2010 and therefore sent a further letter dated 9 August 2010 claiming the outstanding monies for redundancy and notice pay as well as monies in lieu of holiday leave and a bonus payment “of up to £2,000 per annum”. The second named respondent by letter dated 17 August 2010 indicated that his resignation was accepted “effective 13 August 2010”. The letter acknowledged he was owed a redundancy payment in the sum of £1,140.00. It also referred to his entitlement to holiday pay in the sum of £856.00.  However the respondent indicated they did not believe any notice pay was due and owing as he was “laid off” and they requested “copies of all correspondence” regarding a bonus payment of £2,000.00.  Further correspondence passed between the parties and on 5 November 2010 the claimant was sent a cheque for £917.07 with a compliment slip from the second named respondent stating “Please find enclosed cheque for holiday pay”. No breakdown of how the monies were calculated was enclosed. At hearing details were produced to the tribunal which showed it was the sum due after tax in respect of holiday pay, statutory guarantee payment and some outstanding wages.
 
6.	The claimant’s written statement of terms and conditions of employment included at clause 12 variable periods of notice to be given or entitled to be received in the event of termination. Once an employee had 2 years plus service the notice required amounted to one week for each year of service – up to a maximum of 12 weeks.  The claimant had signed his acknowledgement of the statement of terms and conditions on 30 May 2008. The claimant also produced at hearing a letter dated 29 May 2008 signed by him and the then Operations Director Pat Phelan. It referred to an increase in salary and an “eligible for a performance related bonus of up to £2,000 per annum…based on successful achievement of the following: successful delivery of all contracts assigned to you by ensuring all contracts are completed to industry standard and the full invoiced price is collectable by the Finance Department. The bonus payment will normally be paid in December”. The only other correspondence produced re the bonus arrangement was a letter dated 28th April 2009 – which accepted “in principle a performance related bonus may be payable to you. It also sought “any written criteria agreed with Pat Phelan, as to how your end of year bonus was to be calculated”, The tribunal having heard oral evidence on the issue of the bonus concluded at no time either orally or in writing was there a specific acknowledgement from the second named respondent as to the exact figure due, if any, to the claimant under the agreed bonus scheme. 

7.	The claimant submitted his claim to the Office of Industrial Tribunals and Fair Employment Tribunal on 22 September 2010. In the claim form the claimant disclosed that he had claimed “job seekers allowance from 28 June 2010”. 

8.	The claimant received from the second named respondent a letter dated 15 November 2010. The letter dated 15 November starts “This letter is to confirm the following: As per your letter of 9 August 2010 requesting redundancy and resigning your position effective from 13 August 2010, we confirm you have received any outstanding holiday pay and other entitlements excluding your redundancy payment. We plan to pay you your redundancy as soon as possible. We expect this to be early next year”.

9.	The parties were agreed that at the time of termination of the claimant’s employment, the claimant was receiving a gross weekly wage of £535.00. The claimant did not detail his net weekly wage in his claim form other than to say it was variable. The respondent equally did not address it in the response. At hearing pay slips were produced which covered the April, May and June 2010 salary which enabled the tribunal to calculate the average net weekly wage as £371.99. The claimant registered for job seekers allowance on 28 June 2010 as an employee on “lay off” can, for a period of 13 weeks, receive Job seekers allowance provided specified conditions are met. 
 
The Relevant Law and Decision

10.	The tribunal considered the provisions of Article 170 (1) (b) of the Employment Rights (Northern Ireland) Order 1996 (hereafter referred to as the 1996 Order) which states that an employer “shall pay a redundancy payment to any employee of his if the employee is eligible for a redundancy payment by reason of being laid off or kept on short time”. Employers do not have an automatic right to lay off employees without pay. Their right depends on contractual provisions which can be incorporated into the contract of employment in a number of ways. It can be expressly written, included in a collective agreement, implied as a term through custom and practice or agreed by both parties to the contract. 

11.	There are certain conditions laid out in Part XII of the 1996 Order which the claimant must satisfy to protect his entitlement to a redundancy payment. The relevant provisions in respect of this claimant are found in Articles 182 – 185, 190, 198 and 199 of the 1996 Order. Article 183 to 185 inclusive sets out qualifying conditions that must be satisfied to protect that eligibility to redundancy payment. Article 185 of the 1996 Order provides “An employee is not entitled to a redundancy payment by reason of being laid off unless he terminates his contract of employment by giving such period of notice as is required for the purposes of this Article before the end of the relevant period”. The relevant period is defined in Article 185 (3) - in effect before the expiration of four weeks from service of the notice of intention to claim. The period of notice required in the circumstances where the employee is required by his contract of employment to give more than one weeks notice to terminate the contract is “the minimum period which he is required to give and otherwise one week”. 

12.	In regard to the claim for pay in lieu of notice, the claim of the claimant is based on contractual arrangements made between the parties when he commenced his employment. No evidence was called or produced that the clause 12 was varied at any stage during his employment. If the contract of employment gives employee or employer a right to longer notice than that in legislation then the longer period of notice applies. Equally the principal right conferred during a period of notice is “to be paid in cases where the employee is ready and willing to work but no work is provided for him by his employer” amongst other circumstances. Any payments in fact made by an employer during period of notice (including holiday pay or sick pay) go towards meeting the employer’s liability – see Harvey on Industrial Relations and Employment Law paragraph 48.12. 

13.	The date of termination is governed by Article 129 (1) (b) of the Employment Rights (Northern Ireland) Order 1996 and is the date the “termination takes effect”.  

14.	Article 197 of the 1996 Order sets out how the amount of the redundancy payment shall be calculated.

15.	Under the Industrial Tribunal Extension of Jurisdiction Order (Northern Ireland) 1994 an employee may bring a claim for damages for breach of his contract of employment or for a sum due under that contract or any other contract connected with his employment before an Industrial Tribunal if the claim arises out of or is outstanding on termination of his employment.

Applying the Law to Facts Found

16.	The tribunal is satisfied in light of the evidence of earlier lay off periods in 2009, which did not result in the claimant treating same as a breach of his contract, that in the circumstances of this case there is an implied provision in the contract of the claimant permitting the second named respondent to “lay off” this employee without pay. The claimant established that he is eligible for a redundancy payment by reason of “lay off” as provided for by Article 183 of the 1996 Order. The period of lay off had commenced for this claimant on 18 June 2010 and the claimant received notice that it would continue for 8 weeks taking it to the 13 August 2010. By letter dated 19 July the claimant gave notice of his intention to claim redundancy. During the period of “lay off” the claimant received less than half a weeks pay. By the claimant giving notice on the 19 July 2010, he gave notice after four consecutive weeks of the first “lay off” period thereby satisfying the conditions of Article 183 (1) and (2) (a) of the 1996 Order. No counter notice was served by the second named respondent. The claimant must give notice of resignation as required by Article 185 of the 1996 Order before “the end of the relevant period” – see Article 185 (1) of the 1996 Order. While there was some conflict between the letter of offer of employment in 2006 and the written statement of terms and conditions produced at hearing as signed and dated in 2008, it appears to the tribunal that the later document is a variation of the original terms and conditions. The period of notice to be given in this case was “the minimum period he was required to give” within the terms of his varied contract of employment namely three weeks. The “relevant period” where an employer does not give a counter notice is within four weeks of notice of intention to claim. While case law supports the proposition that the legislative requirements must be followed strictly – there is authority the tribunal can “resolve the issue as to resignation by taking into account “the particular circumstances which applied in that context” – Buffrey, Auker–Howlett and Baldwin v Manpower PLC [2003] UKEAT 0443/02/0804. In this case the claimant gave notice of resignation at the same time as the notice of intention to claim.  Even though the notice of resignation was given at the same time as the notice of intention to claim it appears to the tribunal that does not undermine the claimant’s legal entitlement as such notice of resignation has still been given “before the end of the relevant period”. The tribunal takes the view that this notice of resignation is still “within four weeks of notice of intention to claim”. In all the circumstances of this case the tribunal determined that the date of effective termination for the claimant’s employment was 9 August 2010.

17.	The claimant gave notice as required by clause 12 – one week for each year of service. The tribunal was faced with a claimant who had registered for jobseekers contribution based allowance from the 28 June 2010 – some four weeks before he gave notice of his intention to terminate his employment with the second named respondent. The claimant insisted he had not worked for the second named respondent during the lay off period and could not understand the amount of money tendered in the cheque sent 5 November 2010 for £185.00 in respect of 17 hours worked between 21 June and 23 July 2010. It was against this background that the issue of whether or not the claimant was entitled to notice pay in circumstances where he exercised his right to claim entitlement to redundancy having been laid off or placed on short time by his employer fell to be resolved. 

18.	While there are certain legislative provisions governing when notice of termination can be waived “lay off” does not appear as one of the statutory exceptions. Equally in this case while there was no express provision in the written statement of terms and conditions of this claimant providing the employer with the right to exercise a lay off period, similar actions had occurred in 2009 without same being treated as a repudiation of contract.  A term covering “lay-off” can be implied into the contract of employment. The second named respondent could easily have reacted to the notice given in the letter dated 19 July 2010 and waived the claimant’s obligation to give three weeks notice but did not do so. The tribunal took particular notice of the documents and letters that passed between the parties including the letter dated May 2008 and the correspondence post 19 July 2010 – which exhibited no evidence of an intention on the part of the second named respondent to waive the contractual notice period as provided within clause 12 of the contract of employment held by the claimant. The respondent gave no counter notice in accordance with Article 184 of the 1996 Order nor did they waive the requirement in the contract of employment for the claimant to give notice of termination equivalent to the notice an employee was entitled to under the contract of employment namely one week for each year of service when employed for two years or more.There was no explanation furnished at the hearing for the respondent’s failure to do so. 

19.	It is difficult for the tribunal to conclude anything other than on the balance of probabilities, had work been offered to the claimant during that three week period he would have completed same. It appears to the tribunal that the claimant has established that he had a contractual obligation to give three weeks notice to the second named respondent which the respondent could have waived but didn’t. Accordingly in contract law the claimant is entitled to three weeks pay for the notice period running from 19 July 2010 until 9 August 2010. However as the claimant during that period received job seekers allowance it is necessary to deduct that amount from the weekly net pay due to the claimant – as it would be contrary to law for the claimant to be awarded a sum greater than his loss. As his net weekly pay was £371.99, the sum of £105.85 should be deducted to make a total weekly loss of £266.14. Also the second named respondent is entitled to have deducted any payments in fact made. As the claimant is adamant that he in fact did no work in the period for which the sum of £184.40 gross was tendered in November 2010, that sum together with the sum of £927.00 gross in respect of holiday pay would require to be deducted from any monies allegedly due in respect of unpaid notice pay.      
 
20.	The tribunal was satisfied that monies in respect of all holiday pay due and owing has been discharged in the cheque tendered to the claimant in early November 2010. The tribunal considered the claim in respect of the alleged unpaid bonus payment arising from the financial year ending 31 December 2008. The tribunal found it difficult to determine what sum of money was precisely anticipated within the contractual term of being paid – given the wording utilised – a bonus of “up to £2,000”. Specific performance of a contract cannot be ordered where the clause is not sufficiently precise as to its remit. The tribunal took note that despite the monies being outstanding for a year and a half, there was no question of a bonus accruing in the financial year ending 31 December 2009 – and no progress made on clarifying the underlying criteria that established how the amount owing was to be determined. In the circumstances the tribunal, on a balance of probabilities was not satisfied that the alleged bonus monies was owing to the claimant and therefore dismissed that element of the claim. 

 Award

21.	The tribunal considered Articles 17 to 20 and Articles 197 of the Employment Rights (Northern Ireland) Order 1996. There was no break in any of the claimant’s continuity of employment. The claimant had three complete years of service, commencing when he was aged 38 years. This would have entitled the claimant to one week’s gross pay for each of the three years service as a redundancy payment subject to the relevant statutory maximum weekly wage which is £380.00.  The claimant is entitled to a payment  representing three weeks gross pay – 3 x statutory maximum gross weeks pay namely £380.00 = £1,140.00.

22.	The tribunal orders that the first named respondent be dismissed from these proceedings as he was not the employer of the claimant at any time during the claimant’s employment in particular at the relevant date of termination of that employment.

23.	In respect of the breach of contract claim for notice pay the tribunal have concluded that the sum owed in respect of same is three x £266.14 (£798.42) less the net amount received in respect of holiday pay and pay for wages (£834.30). Accordingly the claim for notice pay is also dismissed as the monies received in November 2010 exceed the notice monies which the claimant was entitled to in respect of the alleged breach of contract. 

24.	The Employment Protection (Recoupment of Job Seeker’s Allowance and Income Support) Regulations (Northern Ireland) 1996 do not apply to this decision. 

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

Chairman:

Date and place of hearing:  19 April 2011, Belfast.

Date decision recorded in the register and issued to the parties: