Pawlouski v Michael Young Younger Homes Ltd [2011] NIIT 02824

THE INDUSTRIAL TRIBUNALS

CASE REF: 2824/10

CLAIMANT: Marcin Pawlouski

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 period of “lay off” and accordingly is entitled to monies in respect of redundancy pay. The claim in respect of monies for unpaid notice pay is dismissed. The second named respondent is ordered to pay to the claimant the sum of £1,422.00.

Constitution of the Tribunal:

Chairman (sitting alone): Ms M Sheehan

Appearances:

The claimant was represented at hearing by Jane Griffiths from Magherafelt District Advice Services Ltd.

There was no appearance on behalf of the respondents as they had failed to submit a response in accordance with the rules of procedure and no application for an extension of time had been made by them or on their behalf.

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 and (c) the amount of any redundancy payment due in respect of same. There was also a claim for breach of contract – referring to payment of monies for the notice period provided by the claimant when tendering his resignation. While the claimant had included in his application a claim for unfair dismissal and damages for breach of contract, his representative on the morning of hearing indicated that the unfair dismissal claim and the claim for outstanding holiday pay were withdrawn as monies in respect of holiday pay had been received in November 2010.

The Facts

2. The tribunal considered the claim form and a bundle of documents produced at the hearing by the claimant’s representative. There was also oral evidence given by the claimant. The bundle of documents did not include a statement of main terms and conditions of employment for the claimant but various correspondence between the parties prior to and after the “lay off” period and the 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, accepting redundancy payment was still outstanding due to financial difficulties of the second named respondent. The letter made no mention of the claim for notice pay. 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 25 years of age and 31 years when it ended. He accepted his employer was the second named respondent. His employment commenced on 1st November 2004 as a machine operator. No written statement of terms and conditions of employment for the claimant was produced at hearing. The tribunal had sight of two different written statements of terms and conditions for employees of the second named respondent, produced at the hearing by other employees who also had claims before this tribunal on the date of hearing.

4. One written statement of terms and conditions of employment produced at hearing in respect of other claimants employed by the second named respondent sets out notice entitlements/Requirements at clause 14 of that document. The entitlement of the employee to notice from the respondent company was detailed first. The clause then reads

“It is a condition of your employment that you may be asked to give an equal amount of notice as shown above should you decide to leave the company. By mutual agreement these notice periods may be waived and the Company reserves the right, where it deems it appropriate, to pay wages in lieu of notice instead of the above. The company reserves the right, in the case of gross misconduct, to dismiss you summarily which means without notice and without payment in lieu of notice. Where an employee leaves before the end of the notice period given, (whether notice is given by the Company of the employee) he/she will forfeit the wages and other benefits for the un-worked period”.

There were also claimants, like this claimant, employed in 2004 who had terms and conditions where notice was addressed in clause 12 of that document. Clause 12 of that statement of terms and conditions set out variable periods of notice to be given or entitled to receive in the event of termination – which post 2 years service amounted to one week for each year of service – up to a maximum of 12 weeks.

5. The tribunal did have available to it a copy of the terms and conditions provided to another employee Charlotte O’Kane, who was a claimant in a case heard as the same time as this claimant’s claim. Ms O’Kane like the claimant had commenced employment in 2004 – in her case February 2004. This claimant was employed as a machine operative. The written statement of terms and conditions of employment provided to staff in 2004 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.

6. By letter dated 9 August 2010 the claimant received notice of the second named respondent’s intention to place all employees on temporary lay –off for the short term with statutory guarantee pay. The period was to be for four weeks effective from 9 August 2010. Before the lay off period commenced the claimant stated in his claim form that he had been earning weekly £279.00 gross. At another part of the claim form – part 7 – he stated his gross weekly pay to be £284.38 and net pay at £233.19. However in a letter dated 26 October 2010 the claimant stated his gross weekly pay to be £233.31 and net pay £192.48. In evidence at hearing the claimant affirmed that his pay was £284.38 and £233.19 per week. A further letter dated 6 September 2010 was received advising the claimant that the lay-off period was to be extended by two weeks with effective from 5 September 2010. A further letter dated 15 September 2010 then issued advising the lay off was to continue for a further 6 week period effective from 20 September 2010. Against this background the claimant by letter dated 11 September 2010 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 advised that “since I have worked at Younger homes for five complete years, I am giving you five weeks notice, which expires on the 29 October 2010”.

7. The claimant received no response from the second named respondent to his letter dated 21 September 2010 until a letter was sent dated 1st October 2010 – indicating that his resignation was accepted and acknowledging he was owed a redundancy payment in the sum of £1,421.00. It also referred to his holiday pay and the requirement to give the second named respondent “a notice period of 1 week for every year of employment, which equates to five weeks, and expires on 29 October 2010”. The respondent asked that the claimant contact them week commencing 25 October when “we will be in a position to confirm our payment proposals to you”. No payment was received so the claimant wrote on 26 October 2010 claiming redundancy pay of £1,166.55 and five weeks pay in lieu of notice in the sum of £769.92. The second named respondent sent a letter dated 15 November 2010 stating they had discharged outstanding holiday pay and other entitlements owed to the claimant save the redundancy settlement. They indicated they had insufficient funds to pay the monies owed but “plan to pay you as soon as possible and expect this to be early next year”.

8. The claimant submitted his claim to the Office of Industrial Tribunals and Fair Employment Tribunal on 3 December 2010. In the claim form the claimant disclosed that he had claimed “Contribution based job seekers allowance from 9 August 2010”. An employee on “lay off” can, for a period of 13 weeks, receive Job seekers allowance provided specified conditions are met. The claimant indicated he signed off on 27 September 2010 “because he had the prospect of another job”. The claim form indicates that the new job started on 18 October 2010.

The Relevant Law and Decision

9. 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.

10. 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”.

11. 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. 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.

12. 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”.

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

14. 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

15. 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 9 August 2010 and the claimant received notice that it would continue for 4 weeks taking it to the 5 September 2010. Then by letter dated 6 September 2010 the claimant was given notice of an extension of the “lay off” for two weeks, effective from 5 September 2010, due to end 19 September 2010. A further letter dated 15 September gave notice of a six week extension from the 20 September 2010. During the period of “lay off” the claimant received less than half a weeks pay. By the claimant giving notice on the 21 September 2010, he gave notice within four weeks of the ending of the first “lay off” period thereby satisfying the conditions of Article 183 (1) and (2) (a) of the 1996 Order.

16. 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. The period of notice to be given in this case was “the minimum period he was required to give” within the terms of his contract of employment. The tribunal had been referred to in the course of the hearing to two relevant clauses in written statements of terms and conditions for employees of the second named respondent. On a balance of probabilities in light of the fact that other employees who commenced employment in 2004 received the statement of terms and conditions which included clause 12 and the wording of the letter from the respondent dated 1 October 2010, the tribunal considered that the relevant clause regarding notice period which applied to this claimant was clause 12 which required the claimant to give the employer notice of “one week for each year of service”.

17. The “relevant period” for giving notice of termination where an employer does not give a counter notice is within four weeks of the 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”. This claimant admits commencing new employment on 18 October 2010 so in the circumstances of this case the tribunal determined that the date of effective termination for the claimant’s employment was 18 October 2010.

18. 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 9 August 2010 – as soon as he had been “laid off” yet signed off Job Seekers allowance on the 27 September 2010 due to “prospect of new job”. The claimant had not worked for the second named respondent during the lay off period. 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.

19. 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 the right to exercise a lay off period – as similar actions had occurred in 2009 without same being treated as a repudiation of contract, then a term covering same can be implied into the contract of employment. The second named respondent could easily have reacted to the notice given in the letter dated 21 September 2010 and waived the claimant’s obligation to give five weeks notice but did not do so. The tribunal took particular notice of the documents and letters that passed between the parties including the correspondence post 21 September 2010 in particular the letter dated 1 October 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. There was no explanation furnished at the hearing for the respondent’s failure to do so.

20. Entitlement to monies in lieu of notice is dependent on the employee being able and available for work with that employer. Having stated a new job on 18 October 2010 the claimant was clearly no longer available to work for the second named respondent from that date. It is noteworthy that the claimant signed off from Jobseeker’s allowance on 27 September 2010 due to “prospect of another job”. Entitlement to job seeker’s allowance is also dependent on being available for work which is offered by the state. The claim form contains details of the new employment commenced on 18 October 2010. No mention was made at hearing or in the claim form as to the claimant’s source of income during the period 27 September to 18 October 2010. It is difficult for the tribunal to conclude anything other than, on the balance of probabilities, that the claimant was in some type of job post 27 September 2010 and had work been offered to the claimant by the second named respondent post 27 September 2010, he would not have been in a position to complete same. Accordingly in contract law the claimant is entitled to one weeks pay for the notice period between 21 September and 27 September 2010. As the claimant during that period received job seekers allowance until 27 September 2010 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. Having heard evidence about the varying rates of pay the tribunal on a balance of probabilities concluded that the claimant’s gross weekly pay was £284.38 and net pay at £233.19. In addition 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. In light of the monies received in November 2010 and the sum in respect of job seekers allowance to be deducted from the net weekly wage the tribunal concluded there would be no balance of monies to be paid to the claimant in respect of the one week’s pay in lieu of notice owing to this claimant.

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 five complete years of service, commencing when he was aged 25 years and ending when he was aged 31. This would have entitled the claimant to one week’s gross pay for each of the five 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 five weeks gross pay – 5 x gross weeks pay namely £284.38 = £1,421.90, say £1,422.00.

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 limited to one week in the circumstances set out at paragraph 20 above. The sum in respect of one weeks notice is exceeded by the monies received from his employer in respect of holiday pay in November 2010 and accordingly the claim for further monies in respect of pay in lieu of notice is dismissed.

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:

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You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Pawlouski v Michael Young Younger Homes Ltd [2011] NIIT 02824_10IT (10 June 2011) URL: http://www.bailii.org/nie/cases/NIIT/2011/02824_10IT.html Cite as: [2011] NIIT 2824_10IT, [2011] NIIT 02824_10IT

Industrial Tribunals Northern Ireland Decisions