THE INDUSTRIAL TRIBUNALS

CASE REF:	1675/08

CLAIMANT:	Michael Henderson
RESPONDENT:	Look C Ltd	

DECISION
The decision of the tribunal is that the claimant was unfairly dismissed by the respondent and that the respondent is to pay to the claimant £34,638.06 in respect of unfair dismissal, redundancy payment, unpaid wages and expenses. 

Constitution of Tribunal:
Chairman:		Mr Wimpress	
Members:		Mr Hampton
Mr Crawford

Appearances:
The claimant was represented by Ms Rachael Best, Barrister-at-Law, instructed by Worthingtons, Solicitors.
The respondent did not appear and was not represented.

The claim and the response

1.	The claimant lodged proceedings in the tribunal office on 10 November 2008 in which he made claims seeking compensation in respect of unfair dismissal, redundancy and breach of contract.  The respondent did not file a response or appear at the hearing of this matter.  As the tribunal was satisfied that the respondent had been duly notified of the date and place of hearing, the tribunal decided that it would be appropriate, having regard to Rule 27 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005, to proceed with the hearing in the respondent’s absence and to determine the matter on the basis of the oral and documentary evidence presented on behalf of the claimant. 

Sources of evidence

2.	The tribunal received a bundle of documents from the claimant’s solicitors together with a schedule of loss and heard oral evidence from the claimant.

The issues

3.	(1)		Whether the claimant was unfairly dismissed.

(2)		Whether the claimant was entitled to a redundancy payment.

(3)	Whether the respondent failed to comply with the statutory dismissal procedure and if so to what extent should any award be uplifted.

(4)	Whether the claimant was entitled to monies allegedly due to him in respect of unpaid wages and expenses.

The facts

4.	The claimant’s date of birth is 29 December 1950.  He commenced employment with Look C Ireland Limited in July 2002.  On 1 April 2004 the claimant entered into a written contract with Look C Limited whereby he was employed as a Regional Sales Manager at a salary of £28,000 per annum a position that he held until the termination of his employment on 4 September 2008.

5.	The circumstances giving rise to the termination of his employment were that on 21 July 2008, the Chief Executive Officer, Mr Martin Trussler, informed the claimant that he was being made redundant with immediate effect.  Mr Trussler followed this up with a confirmatory e-mail on 22 July 2008 in which he indicated that there was a need to stem trading losses and that in consequence there would have to be some redundancies and non-payment of salaries until the company could afford to make payment.  Mr Trussler went on to state that as he had mentioned the previous day the claimant’s position had been reviewed and unfortunately it would have to be made redundant with immediate effect.  Mr Trussler then went on to indicate that the respondent might be prepared to enter into a sales commission only remuneration relationship with the claimant for his existing sales territories and invited the claimant to let him know if he was interested.  

6.	The claimant responded by e-mail a short time later querying what Mr Trussler meant by redundancy with immediate effect, asking who was involved in the       non-payment of salaries and why he had been chosen for redundancy.  On the same day the claimant received an e-mail from the Managing Director, Mr Golightly, who indicated that there had been a misunderstanding and that Mr Trussler was referring to the provisional selection for redundancy and that a letter was in the post to the claimant to this effect.  Mr Golightly also stated that the directors were taking no salary and had not done so for some time.  On 23 July 2008, the claimant received a letter from Mr Golightly dated 21 July 2008 which explained the background to the situation, informed the claimant that he had been provisionally selected for redundancy and invited him to a meeting on 4 August 2008.  Mr Golightly stressed that it was only a provisional selection for redundancy and that final decisions would be subject to discussion and consultation and that the claimant was not being given notice of the termination of his employment.  The letter made no mention of the claimant’s right to be accompanied at the meeting.

7.	On 28 July 2008, Mr Golightly contacted the claimant by phone and e-mail seeking future sales information.  Mr Golightly asked the claimant to provide information as to what sales were in the pipeline and the prospects in Northern Ireland, the Channel Islands or Holland over the next 60 days together with any information on the likelihood of his major potential customers providing invoicable business in the near future.  Mr Golightly concluded by saying that they needed as much concrete information as possible to base the redundancy selection decision on and that all those involved in the selection process from the sales department were being asked for the same information.  The claimant’s response by phone and e-mail painted a bleak picture due to the economic climate with no outstanding orders and nothing in the pipeline in the near future and certainly not over the next 60 days.

8.	The redundancy meeting took place as scheduled at the respondent’s main office at Newcastle-upon-Tyne on 4 August 2008.  The meeting was conducted by Mr Golightly and the claimant was accompanied by Mr Peter Grant, the Technical Support Manager.  Had the claimant been made aware of his right to be accompanied in advance of the meeting he would have chosen someone else.  The only record available of the meeting is one produced by the claimant and we accept that it is an accurate account.  Mr Golightly opened the meeting by stating that its purpose was to tell the claimant that the respondent was making one person redundant in sales and that Paul Bewers who had already left was not being replaced.  This meant that there were no other opportunities for employment with the respondent in the United Kingdom.  Mr Golightly asked the claimant what sales he would be generating over the next 60 days and the claimant responded that he did not know what sales he would be bringing in over the next 60 days and did not believe that anybody could put a figure on this.  Mr Golightly then stated that in that case he was making the claimant redundant and that he could have gardening leave or carry on working for thirty days after which time he would receive his redundancy pay in accordance with his contract.  The claimant replied that he would take gardening leave.  

9.      It is material to note that at this point in the process the only other employee who was in theory at risk of being made redundant was Mr Neil Gray and he had not yet been interviewed.  Mr Gray’s area of responsibility was Great Britain whereas the claimant was responsible for Northern Ireland, the Republic of Ireland, the Channel Islands and Holland as well as corporate clients.  There is no evidence before us as to why Mr Gray was preferred to the claimant.  

10.      Mr Golightly wrote to the claimant on the same day indicating that the provisional 
selection for redundancy referred to in his letter of 21 July 2008 was now confirmed and advising that no suitable alternatives to redundancy had arisen.  Mr Golightly stated that he was giving the claimant notice of termination of his employment and that his employment with the respondent would end on 2 September 2008.  Mr Golightly assured the claimant that the respondent would continue to look for suitable alternative positions for the claimant and would keep him updated as to progress.  Mr Golightly did not make any mention of the claimant’s the right to appeal.

11.	On 19 August 2008, the claimant e-mailed Mr Golightly and Neil Martin complaining  
that he had received no updates or contact from him, querying what redundancy pay he would receive and seeking details of the selection criteria and results.  Mr Golightly subsequently wrote to the claimant on 4 September 2008 advising that he was entitled to a statutory redundancy payment based on four years service.  In the event the claimant did not receive any redundancy pay whatsoever from the respondent or his final month’s salary or the expenses incurred in attending the redundancy meeting. 

12.	 On 16 September 2008 the claimant contacted the respondent by e-mail complaining about the failure to pay wages, redundancy and expenses and by letter of 19 September 2008, the claimant also pointed out that any redundancy payment should be based on six years employment.  The respondent appears to have engaged solicitors at this point who wrote to the claimant on 23 September 2008 and requested that the claimant make certain items of property available to their client in exchange for the redundancy payment that was due to him.  We were not provided with a copy of this letter but it would appear that the solicitors were also seeking to dispute the claimant’s entitlement to six years redundancy on the basis that the identity of the claimant’s employer changed when he signed a new contract in April 2004 from Look C Ireland Limited to Look C Limited and that this broke his continuity of employment. 

13.	The claimant engaged solicitors who responded on his behalf on 8 October 2008 to the effect that there was no break in continuity of employment as both companies were part of a group owned by ATM plc and as such the claimant was entitled to a redundancy payment based on six years service.  The solicitors also sought payment of the August 2008 wages together with £200 in respect of underpayment of wages from April to July 2008, 4 days wages for September (£360.85) and a payment of £536.99 based on accrued holiday entitlement.  The solicitors also complained about the failure to provide the claimant with his P45 and P11D, sought a fully itemised list of property and argued that the mobile phone referred to in previous correspondence in fact belonged to the claimant.  There was no reply to the letter of 8 October 2008 and the claimant lodged his claim on 10 November 2008.

The law

14.	The relevant statutory provisions are found in Articles 130, 130A, 170, 174 and 197 of the Employment Rights (Northern Ireland) Order 1996, Article 17 of the Employment (Northern Ireland) Order 2003, the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004 and the Industrial Tribunal Extension of Jurisdiction (Northern Ireland) Order 1994.  Article 17 of the Employment (Northern Ireland) Order 2003 is of particular importance in the present case as it makes provision for increasing awards for non compliance with the statutory procedures by employers as follows:-

17.  - (1)	This Article applies to proceedings before an industrial tribunal relating to a claim under any of the jurisdictions listed in Schedule 2 by an employee.

        (3)	If, in the case of proceedings to which this Article   applies, it appears to the industrial tribunal that – 

(a)	the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b)	the statutory procedure was not completed before the proceedings were begun, and

(c)	      the non-completion of the statutory  
procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure,

it shall, subject to paragraph (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent.

(4)	The duty under paragraph (2) or (3) to make a reduction or increase of 10 per cent does not apply if there are exceptional circumstances which would make a reduction or increase of that percentage unjust or inequitable, in which case the tribunal may make no reduction or increase or a reduction or increase of such lesser percentage as it considers just and equitable in all the circumstances.

(5)	Where an award falls to be adjusted under this Article and under Article 27, the adjustment under this Article shall be made before the adjustment under that Article.

15.	Accordingly, if an employer wishes to dismiss an employee for redundancy or any other reason, it must go through the statutory dismissal procedure.  The procedure stipulates that the employer must set out in writing the reason for the proposed action, must invite the employee to a meeting for the matter to be discussed, must communicate the decision to the employee and advise of the right to appeal.  If the right to appeal is exercised by the employee there must be another meeting and the outcome must be communicated to the employee.  All meetings and actions must take place at a reasonable time and place.  

16.	If the failure to follow the statutory procedure is because the employer is at fault the tribunal must increase the compensatory award for unfair dismissal by 10% and may increase that award by a percentage up to 50%.  

Submissions 

17.	The tribunal is grateful to Ms Smith for her helpful and commendably thorough submissions.  In addition to the relevant statutory provisions, Ms Smith placed reliance on Bristol Channel Repair Ltd v O’Keefe [1977] 2 All ER 258, Alexander v Bridgen [2006] IRLR 422 EAT and McKindless Group v McLaughlin [2008] EAT 0010.  Although the respondent set out in writing the basis for the action and arranged a meeting, Ms Smith nonetheless sought a 50 % uplift on the basis of the respondent's failure to adhere to the statutory procedures on account of the absence of an opportunity for the claimant to secure his representative of choice at the hearing and the absence of an appeal.   Ms Smith also contended that the whole process was a sham. Ms Smith also relied on the Industrial Tribunal Extension of Jurisdiction (Northern Ireland) Order 1994 in respect of the breach of contract claim.

Conclusions 

18.	We have no difficulty in concluding that there was a dismissal based on the claimant's evidence and the correspondence.  Once a dismissal is established the burden of proof is on the respondent to show that the dismissal is fair. The standard dismissal procedures apply and include requirements to notify the employee in writing, hold a meeting with him and arrange an appeal if necessary.  

19.	The claimant accepted that there was a letter prior to the meeting but this contained no reference to the right to be accompanied.  Although the claimant was in the event accompanied this was by a different person than he would have chosen himself.  The right was effectively taken away from him because he was not informed of this in advance of the hearing.

20.	The meeting took place on 4 August 2008, but it is clear that the decision to dismiss him had already been made given that Mr Trussler had informed him of the decision by telephone on 22 July 2008 and by e-mail on the same date which refers to the decision being made ‘with immediate effect’. In these circumstances we are satisfied that the decision to dismiss the claimant had already been made and the offer of a meeting that was subsequently made was merely an attempt to camouflage this.

21.	In relation to the selection pool criteria, the burden lies on the respondent (Bristol Channel Repair Ltd v O’Keefe) to demonstrate that it has taken into account the characteristics of its employees when deciding whom to select.  There is no evidence from the respondent about this.  The employer should set out why there is a redundancy situation, the selection criteria and any assessment of the employee in order to prevent automatic unfair dismissal.

22.	The dismissal in the present case was substantively and procedurally unfair.  The only reference to criteria of any sort was to 60 days sales and the claimant was made redundant on this basis during the meeting before the other candidate was interviewed.  It was also a sham because the decision was already made.  The claimant sought further information in his letter of grievance of 19 August 2008 but the respondent failed to respond to it.

23.	Although there was a reference to an alternative job in the dismissal letter there was no evidence that a review or assessment was actually undertaken.  Although the suggestion of commission based work was rejected by the claimant as being outside the scope of his contract of employment this was not followed up by the respondent and the onus remained on the respondent to demonstrate to the tribunal that it had offered him alternative employment.  

24.	There is no evidence before us as to why Mr Gray was preferred to the claimant.  The fact that the claimant was informed that he was being made redundant before Mr Gray was even interviewed confirms our view that the decision to make the claimant redundant was made in advance of Mr Trussler’s telephone call to the claimant on 21 July 2008.   Accordingly there can be no reduction of the award on the basis that the claimant would have been dismissed in any event.

25.	The respondent also failed to comply with the requirement to offer an appeal as appears from the dismissal letter which makes no reference to a right of appeal.  

26.	It is clear that the respondent had already determined that the claimant was to be made redundant in advance of the meeting and bringing him to Newcastle for a meeting was simply a sham.  It is for the respondent to show why the statutory procedure was not complied with but the respondent has not participated in the proceedings or responded to the grievance letters.  Therefore this is both a case of unfair dismissal based on the basis of unfair selection for redundancy and automatic unfair dismissal under Article 130A.  

27.	In these circumstances we are satisfied that it is just and equitable to uplift the compensatory award by twenty five percent.  Further, in the absence of the respondent’s participation in these proceedings there is no evidential basis of exceptional circumstances which would make the increase of that percentage unjust or inequitable. 

28.      We are also satisfied that the claimant is entitled to redundancy pay on the basis of six years employment.  There was no break in continuity of employment as both Look C Ireland Limited and Look C Limited were part of a group owned by ATM plc and as such the claimant is entitled to a redundancy payment based on six years service.  

29.	In relation to the claims of unlawful deduction of wages and breach of contract, the claimant is clearly entitled to his August pay and gardening leave in accordance with the agreement with the respondent.  We are further satisfied that the claimant is entitled to recover the expenses incurred in attending the sham meeting in Newcastle.  The claimant was also underpaid by £50 per month from April 2008 to July 2008.

30.	Our conclusions on the issues raised in these proceedings are therefore as follows:

(1)		The claimant was unfairly dismissed.

(2)	The claimant is clearly entitled to a redundancy payment based on six years service.  However, in view of our decision that the claimant was unfairly dismissed, the claimant cannot recover compensation under both headings as we are prohibited from paying double compensation by Article 156(4) of the Employment Rights (Northern Ireland) Order 1996.

(3)	The respondent failed to comply with the statutory dismissal procedure in any meaningful way and the steps that were taken were no more than a sham because the decision had already been made to dismiss the claimant before the process was commenced.  In all the circumstances we consider it just and equitable to uplift the award by twenty five percent.

(4)	We are satisfied that the claimant is entitled to recover monies due to him in respect of unpaid wages and expenses.

Award

31.	Basic Award/ Redundancy Payment

£330 x1.5 x 6							£  2,970.00

Compensatory Award

£396 x 32								£12,672.00

Future Loss

£396 x 26								£10,296.00

						            		£22,968.00

25% uplift of compensatory award for failure to follow
statutory procedures		                                             £5,742.00

						           Sub-total	£31,680.00

Loss of Statutory Rights						£     280.00

Non Payment of Wages						£  2,362.44

Underpayment (April – July 2008) £50 x 4			£     200.00

Expenses (July and August 2008)		            	      	£     115.62

							Sub-total	£  2,958.06

					Total award			£34,638.06
                                                                              
32.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing:	16 April 2009, Belfast

Date decision recorded in register and issued to parties: