Mr E Cadden v New Forest Communications: 4105618/2016

JurisdictionEngland & Wales
Judgment Date09 October 2018
Citation4105618/2016
CourtEmployment Tribunal
Published date28 November 2018
Subject MatterWorking Time Regulations
EMPLOYMENT TRIBUNALS (SCOTLAND) Case No: 4105618/2016 5 Held in Glasgow on 17 18 19 and 20th September 2018 Employment Judge: Laura Doherty 10 Mr E Cadden Claimant Represented by Mr R Turnbull Solicitor New Forest Communications Respondent Represented by: Mr. Walker Director 15 20 JUDGMENT OF THE EMPLOYMENT TRIBUNAL 25 The Judgment of the Employment Tribunal is; (1) The claimants claim of unfair dismissal succeeds, and the Respondents are ordered to pay the claimant a Monetary Award of Fifteen Thousand Six Hundred and Eighty-Two Pounds and Fifty Pence (£15,682.50). (2) The claim of unauthorised deduction of wages contrary to Section 13 of the Employment Rights Act 1996 (the ERA) succeeds and the 30 respondents are Ordered to pay the claimant the sum of Seven Thousand Pounds (£7,000). (3) The claimants claim of Breach of Contract succeeds and the Respondents are ordered to pay the claimant the sum of One E.T. Z4 (WR) 4105618/2016 Page 2 Thousand, Five Hundred and Fourteen Pounds and Fourteen Pence (£1,514.14). (4) The claim of under Regulation 14 of the Working Time Regulations 1998 ( the Regulations) succeeds and the respondents are ordered to pay the claimant the sum of One Thousand, Three Hundred and Seventy- 5 Two Pounds, and Seventy-Five Pence (£1,372.75) in respect of leave accrued but not taken at termination of employment. REASONS 10 1 The claimant presented a claim on 25 November 2016 claiming unfair dismissal, breach of contract, failure to pay holiday pay, and unauthorised deduction of wages. All claims were resisted by the respondents. The final version of the amended response was lodged in December 2017. 15 2 The claimant was represented by his solicitor, Mr Turnbull, and the respondents were represented by their Managing Director, Mr Walker. Preliminary issue 3 There is a preliminary issue as to the identity of the claimant’s employer. The Respondents position is that the claimant was not employed by them, but by another company, Pointshift Ltd. 20 Unfair Dismissal 4 The issue in this claim is whether the claimant was constructively unfairly dismissed in terms of Section 95 (1) (c) of the Employment Rights Act 1996 (the ERA) 25 5 The term of the claimant’s contract which is said to have been breached is the obligation to pay wages. It is accepted that the claimant tendered his resignation on 28th July 2016 giving 3 months’ notice, and thereafter, during that notice period he resigned with immediate effect on 20 September, bringing the contract and end on that date. 4105618/2016 6 Page 3 The Respondents position is that there was no breach of the claimant’s contract, in that all sums due to him had been paid. It is also said that the claimant resigned from his own the reasons and not in response to a breach of contract. 5 7 In the event that the Tribunal finds that the claimant was constructively unfairly dismissed it will have to consider the issue of remedy. This will include considering if compensation should be reduced on the grounds of failure to mitigate loss, contributory conduct, and whether the principles to be derived from the case of Polkey v A E Dayton Services should be applied. 10 Unauthorised deduction of wages 8 The issue is whether the claimant is due to be paid salary for the months of August and September 2016, and if so, in what amount. Holiday pay in respect of leave accrued but not taken on the termination of employment. 15 9 The issue is whether the claimant is due to be paid for any leave accrued but not been taken on the termination of his employment. Breach of Contract. 10 This claim relates to payment of expenses which the claimant says are due in respect of a period during which he worked away from home. The issue is whether the claimant is contractually entitled to recover expenses, and if so 20 in what amount. Preliminary Application 11 At the commencement of the hearing the Tribunal dealt with an application for strikeout of the response under Rule 37 (1) (a) and (c) of the Employment 25 Tribunal (Constitution and Rules of Procedure) Regulations 2013 (the Rules). The Tribunal refused the application and give reasons for this orally. 4105618/2016 Page 4 The Hearing 12 The claimant give evidence on his own behalf, and evidence was given by Monica What, who had worked with the claimant and had also been a Director of Pointshift Ltd. 5 13 For the respondent’s evidence was given by Mr Matt Walker, the respondents Managing Director and Mr Johnson Oliff -Cooper, a Director and shareholder of the respondents. 14 Both parties lodged bundles of documents, referred to by the prefix Cl and R. Findings of fact 10 1. The respondents are a company engaged in the supply of IT services, including the supply of computer hardware. They supply a significant number of ‘real time’ systems, which are used in security systems and in transporting cash. They had around 5 or 6 employees at the relevant time. 2. The respondents acquired a company by the name of Pointshift Ltd (Pointshift) on 1 August 2013. Pointshift is a company engaged in the supply 15 of software services. 3. The claimant whose date of birth is 28/06/1966 set up Pointshift in around February 2003 and had been was employed by that company from that date. He was a Director and Shareholder in that company. The respondents and Pointshift had worked together for a number of years in a main contractor/ 20 subcontractor type of relationship. 4. The respondents acquired Pointshift by way of a share transfer in around July 2013. The respondents Directors entered into a Shareholder’s Agreement with the Directors of Pointshift (CL 159), by virtue of which the claimant was 25 allocated twenty shares in the respondent company. Ms Watt was allocated 10 shares. The other Shareholders were Mr and Mrs Walker, and latterly Mr Ollif-Cooper 4105618/2016 5. Page 5 There are consequences for a shareholder, in terms of the Shareholders Agreement, if they are found to be a ‘Bad Leaver’. A Bad Leaver is defined as; ‘A shareholder who is an individual and who is an employee of a member 5 of the Group and who ceases to hold such employment as a result of fraud, dishonesty or gross negligence unless the Board notifies the Company that such person is not a bad leaver.’ 10 6. The Group, is defined as ‘the Company, and Track 360.’ The Company is defined as ‘New Forest Communications Limited’. 7. On the acquisition of Pointshift by the respondents, it was intended that Claimant, and the other employee and Director of Pointshift, Monica Watt, would become employees of the respondents. 15 8. On 8 January 2014 Mr Walker forwarded the claimant a draft contract of employment. This reflected that standard terms and conditions on which the respondents engaged employees. The claimant and Ms Watt revised this document, and their proposed amendments were marked up on it (page Cl 20 463). This was not returned to the claimant with an indication that the proposed amendments were rejected. The document was headed ‘Contract of Employment’ and is stated to be between the respondents and the claimant. 25 9. In terms of clause 5.1 of the document it is said that the claimant’s rate of pay is £3,500 per month payable on or about the 20th of each month. 10. Under the heading ‘Holidays’, the document states: 30 ‘6.1 Your holiday year runs from 1st December to 30th November and you are entitled to 20 per year, to be taken as such times as may be agreed with the Employer’ 4105618/2016 6.2 Page 6 In addition, you are entitled to the following public holidays: All Bank Holidays.’ 11. On the claimant’s revisions of the document there is a query as to whether the pay is net; whether it is a minimum salary plus dividend; and if the bank 5 holidays are English or Scottish. 12. The draft document provided by the respondent’s states that the claimant’s employment with Pointshift counted as parts of his continuous employment with the respondents. 10 In the revised version of the contract, the claimant inserted a date of commencement of employment of 25 February 2003. 13. No contract of employment was signed between the claimant and the respondent, however Cl 463, the final version of the draft, set out the terms on which the parties intended to contract with each other. 15 14. After the respondents had acquired Pointshift, the claimant continued with the duties which he had previously carried out as an employee of Pointshift. That was maintaining the existing infrastructure, looking after software services, dealing with support services, and looking for sales opportunities. He also had some contract with clients of the respondents. The claimant’s job title 20 was Head of Operations (Glasgow). He remained a Director of Pointshift. 15. Pointshift continued to invoice customers for work which was performed by Pointshift, however some work was invoiced to the respondents. 16. Mr Walker was not involved to any significant extent with day to day decisions which the claimant took in the performance of his work, but he was 25 responsible for deciding the order in which the projects the claimant worked on were done, and ultimately, he considered that the claimant was answerable to him. 17. 30 Pointshift continued to maintain its own bank account and the claimant was the only person who had access to this. The account was used to pay routine expenses associated with the running of the business. It was also the account 4105618/2016 Page 7 from which the salary payments (net of tax and NI) of the claimant and Miss Watt were made. 5 18. Pointshift’s major overhead was the payment of salaries. 19. The claimant received a salary of £3,500 net per month net. The payment of that salary was made from the Pointshift bank account. The tax and national insurance which was due on the salary payment was paid for from the respondent’s bank account. 20. The claimant received payment of his salary, on or around the 20th of each month, however on occasions salary was split over two payments, and it was 10 not...

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