THE INDUSTRIAL TRIBUNALS

CASE REF:    2814/11  

CLAIMANT:	Stephen K J Lee

RESPONDENT:	Frank O’Donnell trading as Protech Engineering

DECISION

The unanimous decision of the tribunal is that the claim of unfair dismissal is dismissed in its entirety.  Further the claim for redundancy payment and notice pay are dismissed.  The tribunal determined that it did not have jurisdiction to entertain the claimant’s claim for breach of contract and unlawful deduction of wages, as the claims were submitted outside the statutory prescribed time limits for presentation of the claim.

The tribunal declares that the correct name of the respondent is as detailed above and the title of the proceedings is amended accordingly. 

Constitution of Tribunal:

Chairman:	Ms M Sheehan

Members:	Mr B Collins
	Mr E Miller

Appearances:

The claimant appeared in person at hearing and was represented by Mr M Corkery, Barrister-at-Law, instructed by J Rafferty & Company Solicitors.

The respondent appeared in person at the hearing and without legal representation. 

THE ISSUES

1.	(a) 	To determine the question whether the claimant resigned from his employment in circumstances where he was entitled to treat himself as unfairly dismissed by the respondent contrary to Article 127 (1) (c) of the Employment Rights (Northern Ireland) Order 1996 (hereafter referred to as the ERO).

(b) 	Was the reduction in the claimant’s rate of pay from May 2011 onwards an unlawful deduction of wages and/or breach of contract and if so what damages if any was the claimant entitled to recover from the respondent.

THE CLAIM AND THE RESPONSE

2.	Mr Lee lodged his originating claim with the Office of the Industrial Tribunal and Fair Employment Tribunal on 21 November 2011 in which he complained that he had been unfairly constructively dismissed.  The basis of the claimant’s claim was that the respondent unilaterally reduced his pay from £40,000 to £30,000 in May 2011.  The claimant alleged he had objected to this reduction in pay and had requested redundancy but the respondent refused to make the claimant redundant or to pay his agreed salary.  The respondent disputed that the claimant was constructively dismissed in that while there had been a reduction in the claimant’s salary, the claimant had accepted that reduction and continued to work for the respondent at the new level of pay for some period of time.  It was only after months at the lower rate of pay that the respondent received notice from the claimant that he was unhappy with the reduced level of pay.  The claimant resigned in November 2011 with one week’s notice to the respondent indicating he had obtained alternative employment. 

THE FACTS

3.	The tribunal heard evidence from the claimant and the respondent.  The tribunal was referred to a bundle of documents identified at hearing as R1 (the agreed bundle of documents consisting of 169 pages).  The tribunal received oral submission from the representative for the claimant.  The tribunal found aspects of the evidence of both the claimant and the respondent to be unsatisfactory at times during the course of the hearing.  Neither of the parties sought to introduce witnesses in support of their case, despite some potential witnesses being identified.  The tribunal formed the view neither the claimant nor the respondent was completely frank in their evidence to the tribunal.  On the basis of the evidence, we make the following findings of fact.

4.	The claimant was employed by the respondent, Frank O’Donnell, from 25 November 1996 until the claimant gave notice of his intention to resign on 14 November 2011 from that employment.  The claimant gave the respondent one weeks notice of his resignation, with his last date of employment occurring on 21 November 2011.  From in or about 2005/2006 the claimant was employed as general manager.  The parties agreed that the claimant’s main duties in that role were pricing work, scheduling work for production, arranging sub contractors, managing staff, buying steel and purchasing, health and safety duties and some draughtsman duties. 

5.	The business of the respondent was in engineering, specialising in structural steel works and the supply of secure steel cabins.  By 2008 over eighty per cent of its contracts were based in the Republic of Ireland.  The downturn in the construction industry in that jurisdiction as well as in Northern Ireland had a consequential detrimental effect on the profitability of the respondent’s business.  The staffing levels in the respondent business reduced from 50 in 2007 to 10 in 2011.  At the same time the claimant’s salary level had fluctuated as general manager.  When first appointed to that post the claimant was on a basic annual salary of £40,000 with paid overtime as accrued.  In 2008, the respondent at the request of the claimant, agreed to the claimant’s salary being varied to £62,000 with no paid overtime.  Then in December 2009, the salary of the claimant was reduced from £62,000 per annum to £40,000 per annum.  On each of those occasions when the salary of the claimant was adjusted, a new statement of terms and conditions were issued to the claimant and two of the three produced at hearing had been signed by the claimant.  There was no dispute that the variation in salary from £62,000 to £40,000 was accepted by the claimant. 

6.	The respondent’s contractual documentation produced at hearing included a term governing hours to be worked which stated that employment was fulltime and “your hours of work are Monday - Thursday 8.30 am to 5.30 pm, Friday 8.30 am to 4.00 pm.  You will receive a lunch break of 1 hour”.  The parties were in agreement that from May 2011 the claimant’s hours of work changed so that he worked 9.00 am to 5.30 pm Monday to Thursday and 9.00 am to 1.00 pm on Friday.  In total there was a reduction of 4 and a half hours.  The claimant adhered to the new hours from May 2011 onwards.  The staff employed on hourly rates by the respondent had moved, at an earlier stage than the claimant, to short time working, namely 8.00 am to 4.00 pm Monday to Thursday and 8.00 am to 1.00 pm on Fridays.  Equally there was no dispute between the parties that from 11 May 2011 all staff members were paid at lower rates of pay.

7.	In some of the contractual documents produced at hearing there was a term concerning Notice entitlement/Requirements.  In some of the documents this provision was numbered 11 and in others 12.  Both clauses irrespective of their numbering read the same.  The provision set out the length of notice the respondent would provide, which varied depending on the length of service of the employee.  It also provided that after one months service, the employee, was “required to give the company one week’s notice of your intention of termination of your employment”.  There was no paragraph 13 in any of the copy documents produced to the tribunal although one of the documents included a page containing paragraphs 14 to 17.  Paragraph 17 was entitled Changes to terms and conditions.  It provided that main terms and conditions “may be subject to variation, eg, through negotiated agreements.  Should this occur you will be informed within one week from the change taking effect, through notices published on the company notice boards and/or by person written notification.”

8.	There was no agreement between the claimant and the respondent as to when the matter of a further reduction in salary from £40,000 to £30,000 was raised with the claimant but the claimant accepted that from April 2011 the respondent made him aware that there was to be a reduction in salary for all staff, as a result of financial pressures being imposed by the respondent’s bank on the business.  The claimant accepted that from 2009 he was aware that the respondent’s bank was pressing for a reduction to the business overheads.  From 2009 nearly all hourly rate employees had suffered a reduction in their hours.  There was a discussion involving both the claimant and the respondent as to the need to issue letters indicating a reduction to everyone’s salaries with a view to keeping jobs.  The claimant had the main role in presenting to the staff a generic letter regarding their new rate of pay and hours to be worked.  The claimant accepted he was provided with guidance from an outside consultant Deidre Kelly as to what was to be said to staff at the meeting where they were presented with written notice of the variation in hourly rate and hours.  At no time during this period did the claimant indicate to the respondent that he was not prepared to conduct this process or that he was not in agreement with the process.

9. 	The claimant was the person responsible for conducting the meeting with staff to advise of the new rates of pay, to issue the prepared letter regarding the variation of pay and hours and to obtain the signature of the staff member on the prepared letter confirming acceptance of the amendment to the written statement of terms and conditions of employment.  The claimant accepted that he did not pursue staff to sign the prepared letters indicating acceptance of the new rates of pay and hours of work.  The claimant was aware that letters were prepared for all staff whose terms had been changed.  The claimant made no enquiry regarding his letter when the respondent failed to issue a letter to the claimant.

10.	The respondent accepted that he had been advised by the independent human resources consultant, Deidre Kelly, that “good practice” dictated he technically had to make his staff redundant and then offer them their jobs back at a lower rate of pay.  The respondent could not afford to conduct that process as there were inadequate funds available to cover redundancy payments.  The only other alternative advised by the Human resources consultant was to seek the agreement of employees and obtain that agreement in writing.  The respondent determined to rely on staff loyalty and decided to simply advise staff of the need to reduce pay, their new rates of pay and hours of work and tasked the claimant with implementing that procedure with all operational staff below the level of management.
 
11.	The claimant as general manager was fully aware of the downturn in work for the respondent business and knew the respondent was in difficulty with creditors.  At the time that the claimant’s salary was adjusted from £62,000 to £40,000 in December 2009, other workers were placed on short time.  The claimant was the person who managed the short time process. 

12.	At some time between late April 2011 and July 2011, after the claimant had conducted the process of handing out the letters varying terms of pay and hours to the staff below management level, he approached the respondent to state that if his job at £40,000 was not available he wanted redundancy.  The respondent advised him that there was to be no redundancy as he needed people to do the job, and if the respondent had to pay out redundancy payments he might as well close up the business.  Two steel erector employees left the respondent’s employment rather than accept the lower rate of pay.  Two floor operatives left, one who had health issues.

13.	In April 2011 the respondent obtained a new contract based in Dublin.  At the same time due to lengthy negotiations with the Bank the respondent had obtained agreement for wages to be covered provided the business overdraft was below a certain level.  That level was reviewed on a weekly basis by the bank.  The wage bill for the business at that time was £10,000 per week.  Due to public holidays there was only one banking day in the last week in April and the respondent failed to get to the bank in time to lodge money.  This placed the business below the agreed overdraft level and the wages payments for that week were not honoured by the bank.

14.	On 6 May 2011 the respondent failed to pay any wages to the claimant or any of the staff employed by him at that time.  The respondent held a meeting with all the employees including the claimant regarding the failure to pay wages, which was due to problems with the banking facility of the respondent business.  For the rest of that month and into July 2011, the respondent made payments in cash to the claimant and other staff in respect of wages, which did not always equate to the contractual amount owed.  No payslips were provided until late July 2011 when a bundle of pay slips were produced to the claimant going back to 6 May 2011.  The bundle of pay slips produced at hearing show a change in the weekly gross rate from 18 May 2011 onwards.  Prior to that date the weekly gross wage appears as £769.23 but from that date onwards the gross weekly wage appears as £576.92.  The nett equivalent amounted to £568.97 and £438.42.  The higher sum equated to an annual salary level of £40,000.00, while the lower sum equated to £30,000.00 per annum.

15.	There was some dispute between the parties as to the exact date in July 2011 of a meeting that occurred between the claimant and the respondent but both agreed the meeting took place after the claimant had received the pay slips mentioned in the foregoing paragraph.  The tribunal concluded the meeting occurred late July 2011, most likely on 25 July 2011.  At that meeting the claimant raised with the respondent that the monies he had received from the respondent in cash for salary between 6 May 2011 to 22 July 2011 did not tally with the nett figures appearing on the relevant pay slips.  The claimant in his own evidence asserted that he made the case to the respondent that there was a shortfall of about £1,100.  The respondent did not initially agree with the claimant about the shortfall but after referral to the respondent’s accounts clerk, the respondent agreed with the claimant that the shortfall would be addressed over a period of five weeks.  The respondent produced at hearing a letter dated 5 August 2011, referring to a discussion with the claimant agreeing “on 5 August 2011 you will receive £223.60 and £187.59 per week for 5 weeks” to clear outstanding wages.  The respondent adhered to that payment schedule.  The agreed shortfall was discharged by mid September 2011. 

16.	Shortly after this discussion about the shortfall on the claimant’s wages the respondent received a letter from a solicitor instructed on behalf of the claimant dated 29 July 2011.  The letter referred to initiating a grievance regarding “unlawful deduction of wages and unilateral breach of contract by the reduction of wages to £30,000 without reaching agreement with our client”.  The letter requested a hearing to discuss the matter and requested a reply within 28 days.  Upon receipt of this letter the respondent became aware that the claimant had not signed the contractual documentation regarding the variation of pay and hours prepared for May 2011.

17.	In August 2011 there was a meeting between the claimant and the respondent where the letter dated 29 July 2011 was discussed.  During the meeting the claimant got angry with the respondent and insisted that he had gone to solicitors to “gain my redundancy”.  The respondent again advised the claimant that there was no redundancy.

18.	No further letter was issued by the claimant or his solicitors until a letter dated 25 October 2011, from the same firm of solicitors who wrote in July 2011, was received by the respondent.  This letter referred to the letter in July 2011 and a meeting held in August 2011 “wherein our client informed you that he was not agreeable to a reduction in wages from £40,000 to £30,000.  Our instructions are to formally advise you of our client’s disagreement with the reduction and to confirm that our client is continuing to work for your Company under protest in order to mitigate his loss”.  The letter indicated the claimant intended to submit a claim to Industrial Tribunal within seven days.  The claimant’s claim was not submitted to the Industrial Tribunal within seven days but instead was submitted some 24 days from the date of that October letter.

19.	A formal grievance hearing was not held until 17 November 2011, when the claimant had already tendered by letter his resignation with one week’s notice.

20.	The claimant commenced seeking alternative employment and had interviews at the start of June 2011 and August 2011 where he was unsuccessful.  The claimant applied for posts advertised in JobsNI.  Applications were made and he attended interviews in September 2011 and October 2011.  He obtained an offer of a new job at a salary of £40,000 per annum late October 2011 and on foot of that success tendered his resignation to the respondent by hand delivering same in November 2011.

RELEVANT LAW

21.	By Article 127 of the Employment Rights (Northern Ireland) Order 1996 dismissal is defined for the purposes of the statutory right found in Article 126 of the same Order  -  the right not to be unfairly dismissed.  One of the definitions is termination by the employee “in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct”.  This is commonly referred to as “constructive dismissal”. 

22.	What circumstances can bring about constructive dismissal is determined not by the legislation which is silent on the subject but by the common law.  The common law holds that there must be circumstances amounting to a fundamental breach of contract by the employer.  The basic test is not merely that the employer must commit a fundamental breach of contract but “that the employee must resign in response to the breach; and the employee must accept the repudiation and resign without undue delay or otherwise affirming the contract”.  This is commonly known as the Western Excavating v Sharp test – set out by the Court of Appeal in Western Excavating (ECC) Ltd  v  Sharp [1978] IRLR 27.  In Bailey  v  Alexander House Agencies Ltd [2011], Richardson J, in considering the burden on an employee to prove that they resigned in response to a fundamental breach by their employer, observed that it has never been the law that the Tribunal must concentrate upon the” immediate cause” of the resignation.  Jones  v  Sirl and Son (Furnishers) Ltd [1997] IRLR 493 and Nottinghamshire County Council  v  Meikle [2004] IRLR 703 were cited by him with approval on the issue that the repudiatory breach need not be the sole cause of the employee’s resignation but instead the question for the tribunal should be whether the breach is the effective cause of resignation or whether once a repudiation of the contract by the employer has been established, has the employee accepted that repudiation by treating the contract of employment as at an end.

23.	In W E Cox Toner (International) ltd  v  Crook [1981] IRLR 443 Lord Browne Wilkinson described the general principles applicable to a repudiation of contract as follows:-

	“If one party (the guilty party) commits a repudiatory breach of the contract, the other party (the innocent party) can choose one of two courses: he can affirm the contract and insist on its further performance or he can accept the repudiation, in which case the contract is at an end.  The innocent party must at some stage elect between these two possible courses: if he once affirms the contract his right to accept the repudiation is at an end.  But he is not bound to elect within a reasonable or any other period.  Mere delay by itself (unaccompanied by an express or implied affirmation of the contract) does not constitute affirmation of the contract; but if it is prolonged it may be evidence of an implied affirmation...Affirmation of the contract can be implied.  Thus if the innocent party calls on the guilty party for further performance of the contract, he will normally be taken to have affirmed the contract since his conduct is only consistent with the continued existence of the contractual obligation.  Moreover if the innocent party himself does acts which are only consistent with the continued existence of the contract, such acts will normally show affirmation of the contract.  However if the innocent party further performs the contract to a limited extent but at the same time makes it clear that he is reserving his rights to accept the repudiation or is only continuing so as to allow the guilty party to remedy the breach, such further performance does not prejudice his right subsequently to accept the repudiation”.

24.	In Waltons and Morse  v  Dorrington [1997] IRLR 488, the Appeal Tribunal cited with apparent approval the following passage from the then text of Harvey on Industrial Relations and Employment Law:

	“There is no fixed time limit within which the employee must make up his mind.  It depends upon all the circumstances including the employee’s length of service, the nature of the breach and whether the employee has protested at the change.  Mere protest will not, however, prevent an inference that the employee has waived the breach, although exceptionally a clear reservation of a right might do so.  Where the employee is faced with giving up his job and being unemployed or waiving the breach, it is not surprising that the courts are sometimes reluctant to conclude that he has lost his right to treat himself as discharged by the employer merely by working at the job for a few months”

25.	The correct test of repudiatory conduct by an employer is perhaps best summarised in the judgment given by the Court of Appeal of England and Wales in Buckland  v  Bournemouth University Higher Education Corporation [2010] EWCA Civ 121.  Lord Justice Sedley at paragraph 22 endorsed the following summary of relevant principles by the Employment Appeal Tribunal in that case:-

		“(1)	 In determining whether or not the employer is in fundamental breach of the implied terms of trust and confidence the unvarnished Mahmud test should be applied.

		(2) 	If, applying the Sharp principles, acceptance of that breach entitled the employee to leave, he has been constructively dismissed.

		(3) 	It is open to the employer to show that such dismissal was for a potentially fair reason.

		(4)	If he does so, it will then be for the Employment Tribunal to decide whether dismissal for that reason, both substantially and procedurally (see Sainsbury v Hitt [2003] IRLR 23) fell within the range of reasonable responses and was fair.

		To the EAT’s reason one can now add the remark of Underhill P in Amnesty International v Ahmed [2009] ICR 1450, that “he was sympathetic to the contention that it is unhelpful to introduce into the concept of constructive dismissal a conceptual tool devised for an entirely different purpose”

26. 	In Mahmud  v  BCCI [1998] AC 20, 35, Lord Nicholls reiterated that the test of breach of a fundamental term of a contract of employment was objective: “A breach occurs when the proscribed objective conduct takes place”.  Further Sedley J in Buckland  v  Bournemouth University reaffirms the position that in common law all relevant case law indicates that “a repudiatory breach once complete is not capable of being remedied so as to preclude acceptance by the other party; From that point all the cards are in the hand of the wronged party: …That does not mean, however, that tribunals of fact cannot take a reasonably robust approach to affirmation: a wronged party, particularly if it fails to make its position entirely clear at the outset, cannot ordinarily expect to continue with the contract for very long without losing the option of termination, at least where the other party has offered to make suitable amends”.  Lord Justice Jacob in the same case states “a word about affirmation in the context of employment contracts.  When an employer commits a repudiatory breach there is naturally enormous pressure put on the employee.  If he or she just ups and goes they have no job and the uncomfortable prospect of having to claim damages and unfair dismissal.  If he or she stays there is a risk that they will be taken to have affirmed.  Ideally a wronged employee who stays on for a bit whilst he or she considered their position would say so expressly.  But even that would be difficult and it is not realistic to suppose it will happen very often.  For that reason the law looks carefully at the facts before deciding whether there has really been an affirmation”.

27.	The relevant provisions governing the right not to suffer unauthorised deductions are found in Part IV of the Employment Rights (Northern Ireland) Order 1996, in particular Articles 45 and 46.  In summary a deduction from wages cannot be lawfully made unless the deduction is required or authorised by statute or a relevant provision of the worker’s contract, or the worker has previously signified in writing his agreement or consent to the making of the deduction.  “Relevant provision” of a worker’s contract includes a term or terms of the contract, express or implied, and if express whether oral or in writing, the existence or effect of which the employer has notified to the worker in writing.  A relevant provision which results from a variation of the contract does not operate to authorise the making of a deduction before the variation took effect.  An Industrial Tribunal “shall not consider any complaint” in relation to unlawful deductions “unless it is presented before the end of the period of three months beginning with, the date of payment of wages from which the deduction was made”.  Where the complaint relates to a series of deductions the three month period begins with the date of the last deduction in the series.  The tribunal can only consider a complaint which has not been presented within that three month period where they are satisfied it was not reasonably practicable for a complaint to be presented within that time and that the complaint was presented within such further period as the tribunal considers reasonable.

28.	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.

DECISION  -  UNFAIR DISMISSAL

29.	The tribunal received a brief oral submission from the respondent to the effect that the claimant did agree begrudgingly to work on at the lower rate of pay but felt he could play the law by not signing the varied terms of contract that he knew had been drafted for all employees as a result of the meetings with Ms Kelly the human resource consultant.  The claimant’s allegations that the respondent was making life unbearable for him at the same time are clearly without substance as no mention of such conduct is contained in any communication from the claimant’s legal representatives or the claimant.

30.	The submission made on behalf of the claimant by his legal representative was also oral in nature.  It can be fairly summarised as that a change in pay can clearly be a repudiatory breach.  The issue in this case is whether there has been affirmation.  There is no written agreement or letter signed.  It is accepted affirmation can be inferred from a course of conduct.  A clear issue for the tribunal is when did the repudiatory act take place, the claimant says May 2011 in his evidence but it is arguable the date could be 29 July 2011, given that is the date the claimant has a solicitors letter sent to the respondent indicating he has not received all his salary for the implemented variation.  It is not until September 2011 before all arrears accumulated have been discharged.  In relation to the claim for unlawful deduction of wages, any agreement or consent must be obtained before the deductions are made and they must be made in accordance with the contract.  The lack of written consent given or obtained is a glaring omission in this case.  A number of cases mentioned in Harvey on Industrial Relations and Employment Law from 5.24 onwards were referred to the tribunal concerning the issue of when or if delay on the part of an employee can amount to affirmation of the repudiatory breach including New Sutherland Railway  v  Quinn [2006].  Lastly it was submitted if the tribunal did consider there had been delay on the part of the claimant, the breach was a “continuing breach” and so the claimant still had the right to treat the contract as repudiated when the salary for each week was tendered.

31.	The tribunal reviewed carefully the conflicting evidence it had received from the claimant and the respondent.  As the claimant’s legal representative conceded the tribunal had heard two versions of events leading to the termination of the claimant’s employment.  The claimant’s memory of events was described by his own representative as “not particularly clear or useful in establishing facts here and there”.  While it was contended on behalf of the claimant that “those defects pale in comparison to inconsistencies in the evidence of the respondent”, the tribunal could not find itself in agreement with that point.  In his submission for the claimant, counsel referred to the claimant in March 2011 being “uncategorical that he couldn’t accept the proposed level of pay”.  In his evidence in chief at hearing the claimant placed any discussion about pay being reduced to £30,000 as not occurring before April or May 2011.  The tribunal concluded the claimant could not have informed the respondent he could not accept this reduction in wages in March 2011.

32.	The claimant equally in his claim form makes no reference to events in March 2011.  In his claim form the first repudiatory breach identified is the failure to pay any wages on 6 May 2011.  There is then a reference to the series of reductions in wages in the following six weeks from 6 May 2011 which had not been notified in advance and which are stated to breach his contract of employment.  The claim form reads “this is a repudiatory breach of my contract of employment and as a direct result of this I have been forced to resign”.  In response to questioning from the respondent the claimant accepted that in April 2011 he attended meetings which involved discussion of a process leading to reduction of wages for everyone in the respondent’s business with a view to keeping everyone’s job available.  The claimant also recollected comment by the independent Human Resource consultant, Deidre Kelly, about redundancies where there was an offer of reduction in wages that was not accepted.  The claimant knew the respondent’s view was he needed the people and if he gave redundancies he might as well close the business as he couldn’t fund redundancy.  The claimant in cross examination stated he “thought he wasn’t getting a reduction until May 2011 when told his salary reduced to £30,000”.

33.	What is clear to this tribunal is that before early May 2011 the claimant knew his salary was to be reduced from £40,000 to £30,000.  He also knew this was due purely and simply to the dire financial situation the respondent’s business was in due to the lengthy continued economic downturn in the construction industry.  The claimant was in effect the respondent’s immediate deputy and right hand man.

34.	The failure of the respondent to pay any wages on the first week of May 2011 is a clear and fundamental breach of the claimant’s contract of employment.  However that breach was not acted on by the claimant.  The tribunal was satisfied that the claimant, like all the other employees, knew it was the respondent’s intent to make up the shortfall in pay once the bank approved the necessary financial arrangements.

35.	There is no doubt that the unilateral reduction of salary from £40,000 to £30,000 with effect from the week commencing 12 May 2011 is also a clear and fundamental breach of the claimant’s contract of employment.  The claimant however continued working and more importantly worked only the varied hours which gave him a shortened working day.  There was no immediate verbal or written indication that he was not accepting the reduced level of pay.  The claimant upon receipt of the bundle of payslips tendered in July 2011 met with the respondent and identified a shortfall between the monies he had received and that detailed on the payslips.  On the basis of the payment details provided at hearing by the claimant the tribunal calculated that the shortfall, based on a salary of £40,000 per annum, should have amounted to £2,467.64.  The claimant in his own evidence accepted he calculated a shortfall of £1,100.00.  It is only when the tribunal placed the payslips produced in July 2011 against the evidence of the claimant that the tribunal concluded that the difference between the nett sum received and the nett payments indicated on the payslips provides a shortfall of £1,131.59 if the annual salary is £30,000 per annum.  The claimant in his own evidence asserted after the shortfall was discussed with the respondent’s accounts clerk, the respondent agreed with the claimant that this shortfall would be paid over a period of five weeks.  It is clear over the month of August 2011 to mid September 2011 the claimant received additional sums over and above his salary at a level of £30,000 per annum and the agreed shortfall was discharged by mid September 2011.  The claimant could only have calculated his shortfall at a level of £1,100 if he was calculating the difference in payments received and payment indicated on the payslips on the basis that his salary post mid May 2011 was at £30,000 per annum.  This was in the opinion of the tribunal a clear affirmation of the repudiatory conduct of the respondent both of the failure to pay any salary in early May 2011 and the reduced level of pay from £40,000 to £30,000 from May 2011.

36.	The tribunal did not perceive a conflict between the claimant reaching this oral agreement on the shortfall of wages and the agreed schedule of repayments with the terms of the letter dated 29 July 2011 sent to the respondent by solicitors instructed by the claimant to initiate a grievance concerning unlawful deduction of wages and unilateral breach of contract by reduction of wages to £30,000 per annum.  The claimant told the tribunal he could not remember the exact date that he took legal advice save it was in July 2011.  One possibility is that his meeting with his legal representatives predated the discussions with the respondent regarding the identified shortfall when he reached an agreement on a schedule of payments.  It could explain the absence of any reference to that meeting held in late July 2011 which led to the agreement reached on the schedule of payments.

37.	The tribunal noted that in his evidence the claimant complained that the respondent did not hold a grievance meeting upon receipt of the 29 July 2011 letter.  However as the letter makes no mention of the meeting held regarding the alleged shortfall and the agreement reached on the schedule of payments to address that shortfall, it is not surprising to this tribunal that the respondent considered the meeting he had held with the claimant had addressed the concerns expressed in the solicitor’s letter.

38.	The tribunal noted that despite the letter dated 29 July 2011 requesting a response be sent by the respondent to the solicitors office “within 28 days hereof”, no other communication was received until late October 2011.  This somewhat undermines the strength of the claimant’s complaint that the respondent made no response to that letter. 

39.	The claimant advised the tribunal, in answer to an enquiry from the tribunal members, that he was unaware that he could have made a claim to the tribunal for unlawful deduction of wages while remaining in the respondent’s employment. While the tribunal were not convinced of the truthfulness of this response, the legal representatives for the claimant could not have been unaware of that option for legal redress.  The tribunal found the absence of any such claim being made by late August or early September 2011 puzzling if the claimant had informed the respondent at a meeting on 25 August 2011, as claimed in the letter dated the 25 October 2011 sent on behalf of the claimant to the respondent by the same firm of solicitors, that he was not agreeable to a reduction in his wages from £40,000 to £30,000 and that he was working under protest to mitigate his loss.  Such an obvious omission led the tribunal to be satisfied that the letter dated 25 October 2011 was the first indication the claimant had given to the respondent that he was “continuing to work for the company under protest in order to mitigate his loss”.  The tribunal did not believe that any earlier indication of “working under protest” was given by the claimant to the respondent, once the meeting in late July 2011 had occurred and a schedule of payments agreed to address the identified shortfall in wages.

40.	The tribunal had no doubt that the claimant was aware from May 2011 that the respondent had no intention of making either him or any other employee redundant.  The claimant gave evidence that he was actively seeking alternative employment from June 2011.  He described the situation at hearing as “until alternative employment was found he had no choice but to grin and bear it”.  The tribunal was satisfied that the claimant had been interviewed for his current employment which he commenced immediately upon leaving the respondent’s employment in late October 2011.  The tribunal believed, on the balance of probabilities that the letter from the claimant’s solicitors dated 25 October 2011 was sent after the claimant had obtained new employment following his interview in October with his current employers.  It appeared too much of a coincidence that after nearly three months silence from the claimant’s legal representatives, that the “grievance” is reignited so soon before the claimant gives notice to terminate his employment.  The tribunal concluded that once the claimant had secured an alternative post, then and only then, was the claimant prepared to terminate his employment.  The tribunal considered the successful gain of alternative employment was the reason for the introduction of “working under protest” in the solicitor’s letter in October 2011.  The tribunal noted that the claimant gave notice of his termination of his employment in accordance with the terms to be found in the statement of main terms and conditions of employment, an act that can only be described as consistent with the continued existence of the contractual obligation.

41.	The tribunal considered the timing and actions of the claimant in relation to the various fundamental breaches of the claimant’s contract of employment:-

	(a) 	the failure to pay any wages on 6 May 2011  -  The claimant affirmed his contract in relation to same as not only did he continue working on different hours, he made no immediate or subsequent specific complaint in respect of that failure prior to the submission of his claim to the Industrial Tribunals;

	(b) 	the failure to pay the full contractual wages at a level reflecting an annual salary of £40,000 per annum from the week commencing 12 May 2011; the claimant made no clear reservation of his right to a salary level of £40,000 per annum until the solicitor’s letter dated 25 October 2011.  While the tribunal were mindful of the need “to take a reasonably robust approach to affirmation” the tribunal concluded that the claimant’s conduct in agreeing a shortfall level for the deductions of salary, made between May 2011 to 22 July 2011, together with an agreed timescale for the shortfall to be discharged, can only be viewed as an affirmation by the claimant of his contract of employment  -  an affirmation equivalent to that described in W E Cox Toner (International) Ltd  v  Crook.  Further his request to the respondent to address that shortfall and the provision of a period of notice before terminating his employment is evidence of the continued existence of a contractual obligation.  Therefore at that stage in the words of Lord Browne Wilkinson “his right to accept the repudiation is at an end.” 

42.	The claimant provided little or no evidence as to the alleged breakdown in trust and confidence in his employer alleged in his claim and the tribunal was not satisfied on the balance of probabilities that any such conduct had occurred over and above the variation in the claimant’s terms and conditions of pay and hours, together with a refusal to consider the claimant’s request to make him redundant.  Accordingly the claimant’s claim for unfair dismissal is dismissed.

43	While the claimant also made a claim for a redundancy payment in his claim, the issue was not ventilated in any detail before the tribunal, either in evidence or in submission.  The factual circumstances of this case as found by the tribunal do not satisfy the definition of redundancy as set out in Part XII of the Employment Rights (Northern Ireland) Order 1996, in particular Articles 173 and 174 of that Order. 

DECISION  -  UNLAWFUL DEDUCTION OF WAGES

44.	The claimant’s claim for unlawful deduction of wages was received by the office of Industrial Tribunals and Fair Employment Tribunal on 21 November 2011.  The tribunal was satisfied, on a balance of probabilities, that the respondent made a series of deductions from the claimant’s wages from mid May 2011 until week ending 22 July 2011.  The deductions were made on foot of a relevant provision of the contract of employment, namely an oral express term that the hours of work of the claimant would be reduced with effect from mid May 2011 and the salary reduced at the same time from £40,000 to £30,000 per annum.  However the effect of that contractual term was not notified to the worker in writing until the pay slips covering that period were provided to the claimant on a date between 22 July 2011 to 25 July 2011.  As Article 45 (5) provides that “a relevant provision …having effect by virtue of a variation of the contract…does not operate to authorise the making of a deduction…before the variation took effect”, in the circumstances of this case, the date of payment of the last wage from which the deduction was made concerned the week ending 22 July 2011.  It appeared to this tribunal that as all the alleged unlawful deductions were made before the end of July 2011, the relevant three month period for submitting a claim to the tribunal was exhausted prior to 1 November 2011.  The claim was therefore submitted outside the prescribed three month period. 

45.	The tribunal then went on to consider whether it was reasonably practicable for the claimant to have submitted his claim form prior to 1 November 2011.  In relation to the test of ‘reasonably practicable’, the Court of Appeal in the case of Marks & Spencer  v  Williams-Ryan [2005] IRLR 562, the Court of Appeal, has indicated that the said word should be given a liberal interpretation in favour of the employee; and in the case of Palmer & Saunders  v  Southend-on-Sea Borough Council [1984] IRLR 119, the Court of Appeal interpreted that ‘reasonably practicable’ to mean ‘was it feasible for the complaint to be presented to the tribunal within the relevant three months’?  However, it is well-recognised the test of ‘reasonably practicable’ is much narrower and harder for a claimant to establish than the test of ‘just and equitable’, which allows time to be extended in a case under the various discrimination legislation.  However, the wider ‘just and equitable’ test is not what Parliament has provided under the Employment Rights (Northern Ireland) Order 1996 in relation to a claim of unfair dismissal or unlawful deduction of wages; although it could have done so had it thought it appropriate.  In light of the fact that the claimant had availed of legal advice in July 2011 and that the letter dated 25 October 2011 indicated an intention to submit a claim within seven days, the tribunal was not satisfied that it had not been reasonably practicable for the claimant to submit his complaint regarding any unlawful deduction of wages before 21 November 2011.  The tribunal concluded therefore that it had no jurisdiction to entertain the claimant’s complaint regarding unlawful deduction of wages and breach of contract as those claims had been submitted outside the prescribed statutory period.

46.	Accordingly the totalities of the claimant’s claims are dismissed.

Chairman:

Date and place of hearing:       18 June and 2 July 2012, Belfast.

Date decision recorded in register and issued to parties: