THE INDUSTRIAL TRIBUNALS

CASE REFS:	249/15
250/15  

CLAIMANTS:		1. Lorraine Osborne
				2. Alexandra Jayne Johnston

RESPONDENT:		Department for Employment and Learning

DECISION 

(A)	The Decisions in respect of the Osborne appeals are as follows;

	(1)	Pursuant to that claimant’s application under Article 205 of the Employment Rights (Northern Ireland) Order 1996 (“the ERO”), I have determined that Mr Shaun McCrum, and only Mr Shaun McCrum, is liable to that claimant in respect of a redundancy payment.

	(2)	The claimant’s appeal (“complaint”) pursuant to Article 233 of the Order is dismissed.

	(3)	The amount of the redundancy payment due to the claimant will be determined by the Department.  If the claimant disagrees with that amount, a remedies hearing, in these proceedings, will be arranged.

(B)	The Decisions in the Johnston appeals are as follows:

	(1)	Pursuant to that claimant’s application under Article 205 of ERO, I have determined that Mr Shaun McCrum, and only Mr Shaun McCrum, is liable to that claimant in respect of a redundancy payment.

	(2)	That claimant’s appeal under Article 233 of ERO is dismissed.

(3)	The amount of the redundancy payment due to the claimant will be determined by the Department.  If the claimant disagrees with that amount, a remedies hearing, in these proceedings, will be arranged.

Constitution of Tribunal:

Employment Judge (sitting alone):	Employment Judge Buggy

Appearances:

Both of the claimants were self-represented.

The respondent Department (“the Department”) was represented by 
Mr Neil Cruikshanks.

REASONS

1.	By agreement, these cases were heard together.  

2.	In each case, the claimant, in effect, appeals against decisions which the Department has made in the Department’s role as the statutory guarantor in respect of certain employment debts.

3.	Therefore, in each case, the only proper respondent to these proceedings, and accordingly the only respondent to these proceedings, is the Department.

4.	However, from the outset, in each case, Mrs Marlene McCrum and Miss Courtney McCrum have been notice parties.  Later Mr Shaun McCrum was also added as a notice party. (Mr and Mrs McCrum are married and Miss McCrum is their daughter.

5.	In each case, each of the three McCrums is an appropriate notice party, because he/she may well have an interest in the outcome of these proceedings (in view of the fact that that outcome necessarily involves a determination as to which, if any, of them was the claimant’s employer at the time of the relevant claimant’s dismissal).

6.	Written notice of these proceedings, and of the date of the appeal hearing, were served on Mr and Mrs McCrum at their last known address.  Unfortunately, those documents were returned by Royal Mail; and somebody had endorsed the envelope with the words “No longer at this address”.

7.	In light of the current state of the evidence, I am unclear as to whether the relevant documents were, or were not, properly served on Mr McCrum and/or Mrs McCrum.

8.	What I do know is that efforts were made to notify Mr and Mrs McCrum of this hearing, so as to give them an opportunity to participate in the hearing.  In my view, everything that could proportionately be done has been done in that connection. Therefore, in my view, the returning of the relevant correspondence was not a good reason for postponing the main hearing of these appeals; accordingly, I decided to go ahead with that hearing.

9.	Each of these claimants was employed in a bar in Grand Street, Lisburn (“the Bar”) for many years.  

10.	Each claimant was dismissed from her employment in the Bar, with effect from May 2014.  

11.	On 26 August 2014, each of these two claimants brought industrial tribunal proceedings against Shaun McCrum, Marlene McCrum and Courtney McCrum.  In those proceedings, each of the claimants made claims in respect of notice pay, holiday pay and redundancy pay. 

12.	In each case, I made a default judgment, whereby I declared that Shaun McCrum was liable to make a redundancy payment to the relevant claimant. In each instance, the default judgment was made only because Mr McCrum had not presented any response to the claimants’ claims. (Each relevant default judgment was made without assessing the evidence).

13.	Each claimant applied to the Department, pursuant to the default judgment, for a payment equivalent to the amount of redundancy payment which, according to the default judgment, was due to the relevant claimant from Shaun McCrum.

14.	In each instance, the Department refused to pay the claimant.

15.	Each claimant also asked the Department to make a payment to her in respect of holiday pay and notice pay.  

16.	In each instance, that other application, of the relevant claimant, was also rejected by the Department.

17.	Each claimant has, in effect, appealed against the Department’s refusal of a redundancy payment-equivalent payment, and in respect of the Department’s refusal of her application for a payment in respect of holiday pay and notice pay.

18.	As each claimant accepts, Shaun McCrum’s bankruptcy (see below) had ended by the time of the termination of her employment, and Marlene McCrum and Courtney McCrum were never insolvent at any relevant time. Accordingly, as each claimant accepts, the Department was clearly right to refuse her application for payments in respect of holiday pay and notice pay. (The effect of Article 227 of ERO seems to be that the statutory guarantee in respect of holiday pay and notice pay does not operate unless, at the time of the relevant termination, the employer is “insolvent” within the meaning of the statutory guarantee provisions).  

19.	Accordingly, against that background, and for those reasons, in each of these two cases, the Article 233 appeal must be dismissed.

20.	The effect of paragraph (1) of Article 201 of ERO, so far as material, is as follows.  The Department is expected to make a payment equivalent to the relevant redundancy payment, to an applicant, if both of two conditions are satisfied:

	(1)	The claimant’s employer is liable to pay a redundancy payment to her.

	(2)	The employee has taken all reasonable steps to recover the payment from the employer.

		(3) 	The employer has refused or failed to pay it.

21.	In each of these cases, as the Department appropriately recognises, the second and third of the paragraph 20 conditions have been met. 

22.	Furthermore, in each case, the Department also realistically and appropriately recognises that somebody is liable to pay the claimant a redundancy payment.

23.	Accordingly, in these proceedings, in each case, the only question is who is so liable.

24.	In each instance, the relevant claimant is making a reference to an industrial tribunal pursuant to Article 205 of ERO.  Among the matters which are within the scope of an Article 205 application is any question as to the identity of any employer who is liable to pay a relevant redundancy payment.  That question is at the heart of these proceedings.

25.	I considered both claimants to be honest witnesses.

26.	This appeal hearing has occurred because the Department was not content to make payments to these two claimants pursuant to the default judgments which were made last year against Shaun McCrum.  The reason for the Department’s reluctance to make payments (unless and until these appeals had been the subject of a tribunal adjudication) was that some of the official documentation, which has become available to the Department, but which was not available to me when I made the default judgment, indicates that Marlene McCrum and Courtney McCrum were recorded as the claimant’s employers, in that official documentation.

27.	The relevant documentation was as follows.  First, HMRC contributions records showed Marlene McCrum as the employer in respect of the tax year 13/14 (but, I note, those records would not have been available, or were not readily available, to either claimant during her period of employment in the Bar).  Secondly, copy P60s, for the year 2013/14, show Marlene McCrum and Courtney McCrum as these claimants’ employers.  (However, I note that those P60s were issued after the termination of the employments of these claimants).  Thirdly, and perhaps more significantly, these claimants were sent Certificates of Coding, from HMRC, in July 2013; and those coding notices identified Marlene McCrum and Courtney McCrum as the claimants’ employer at that time.

28.	Both claimants told me that, once they got the July 2013 coding notice, they were under the impression that Marlene McCrum and Courtney McCrum had replaced Shan McCrum as their employer.

29.	However, that was only a matter of impression.  Shaun McCrum never told either of these claimants that he had ceased to be her employer.  Marlene McCrum never told either of these claimants that she had become an employer of the relevant claimant.  Courtney McCrum never told either of these claimants that she had become an employer of the relevant claimant.

30.	On the basis of the contributions records and the coding notices and the P60s, I accept that, at least in respect of the financial year 2013/14, some person or persons was/were telling HMRC that Marlene McCrum and Courtney McCrum were, at that time, the employers of these claimants and (at least implicitly) that Shaun McCrum was then not their employer. 

31.	However, HMRC was not a party to either employment contract.  Instead, at any relevant time, in relation to each relevant contract of employment, the only relevant parties were the employer (or employers) and the employee.

32.	In respect of any periods prior to the tax year 2013/14, there are few facts in favour of any proposition that Shaun McCrum was not, at that time, the employer of each of these claimants.  During the tax year 2012/13, North Down Leisure Company Ltd paid each claimant’s wages.  However, it has not been suggested during these appeals, and it could not realistically have been suggested that that company (which, apart from paying wages, and being the landlord of the premises, had no other involvement with the claimants) was, at any relevant time, an employer of either claimant.

33.	During these two claimants’ respective periods of employment in the relevant Bar, there were various owners.  Originally, the pub was called the Tipsy Toad, and was owned by a Mr McKenna.  Scandown Developments was the next owner of the business.  In 2006, while Scandown Developments was still the owner of the business, Shaun McCrum came to the pub, as an employee.  (He was Assistant Manager from 2006-2007).  In mid-2009, Shaun McCrum took over the business.  Four or five months after he took over the business, the name of the bar changed.  (It became “McCrums”).

34.	From the moment he became owner, until the date of their dismissal, the claimants were paid directly by Shaun McCrum.  They were paid in cash.  They were provided with payslips.   Until the financial year 2013/14, the payslips showed their employer as “S McCrum”.  From then onwards, the name of the employer was “McCrums” on the payslips.

35.	Shaun McCrum always told each relevant claimant what to do, throughout their respective periods of employment, from the moment he became the owner, until the moment of their dismissal.  Although, from the time that her husband took over ownership of the business, Marlene McCrum worked part-time in the bar, she never got involved in the management or supervision of these claimants.  Most weeks, Courtney did a few hours of part-time work in Off Sales.  Again, she took nothing to do with the management or supervision of these claimants, at any time.

36.	Shaun McCrum became bankrupt on 12 April 2013.  In the ordinary course of events, he would have become discharged from bankruptcy by 12 April 2014. For present purposes, I am assuming that that did happen.  

37.	An undischarged bankrupt is legally entitled to continue in business as a sole trader.   However, in that situation, he will be under an obligation, if he operates under a trade name, to identify himself as that trader.  No doubt, such identification, in circumstances of undischarged bankruptcy, might well be seen, at least by the bankrupt business operator, as a factor which is unlikely to be conducive to effective business relationships with suppliers and with other potential creditors. Accordingly, if an undischarged bankrupt continues to operate as a sole trader, there is nothing implausible about any proposition that he or she might be tempted to arrange for officialdom to be misinformed as to the true identity of the operator of the business.

38.	Marlene McCrum, Courtney McCrum and Shaun McCrum have had the opportunity, or could have been given the opportunity if they had asked for it, to put their points of view during the course of the protracted litigation of which these appeals are the latest (and hopefully, final) instalment.  None of them has chosen to avail of any such opportunity.  Nevertheless, in fairness to them, I express no definitive view on the question of whether or not one of them, or two of them, or all of them, has been,  or have been, participants in an attempt to mislead anyone regarding the true identity of the person who was running the relevant business during the tax year 2013/14.

39.	However, even if they were all involved in telling HMRC that Mrs McCrum and Miss McCrum, and not Mr McCrum, were these claimants’ employers, that, in my view, does not constitute sufficient evidence that what the taxman was told was the true position.

40.	Throughout the relevant period, Shaun McCrum never told either claimant that he was ceasing to be her employer.  Throughout the relevant period, Mrs McCrum never told either claimant that she was starting to be that claimant’s employer.  Throughout the relevant period, Miss McCrum never told either of these claimants that she was starting to be the employer of the relevant claimant.  Throughout the relevant period, nothing changed in terms of the day- to- day interactions between Shaun McCrum and each relevant claimant.

41.	Against that background, and for those reasons, I have concluded, on the balance of probabilities, that throughout the tax year 2013/14, Shaun McCrum continued to be the sole employer of each claimant.  I have not had my attention drawn to any evidence which would indicate that, if Mrs and Miss McCrum were not these claimants’ employers in 2013/14, they nevertheless became the employers of these claimants in the last month of their employment, in April 2014.

42.	I note that both claimants told me in evidence that, once they received the tax Coding Notice in July 2013, they were under the “impression”, from then onwards, that Maureen McCrum was the employer.  However, that was only an impression.  They were never told by the “old” employer that he was ceasing to be their employer.  They were never told by the “new” employers that they were starting to be their employer.  In the circumstances of these two cases, although any messages being sent to the third party (HMRC) might be an indicator of a change of employer, any such messages were not sufficient, on their own, to effect an actual change of employer, especially in circumstances in which the “old” employer never tells the employee that he is abandoning the relationship, and neither of the “new” employers ever tells the relevant employee that she (the prospective new employer) is seeking to participate in the relationship.

Employment Judge:       

Date and place of hearing:	19 May 2015, Belfast.	

Date decision recorded in register and issued to parties: