THE INDUSTRIAL TRIBUNALS 

CASE REF: 2194/12 

CLAIMANT:	Kerry Lynn Chessman

RESPONDENT:	Stewart Digital 2 Ltd

DECISION

The decision of the tribunal is that the tribunal finds the claimant’s claims in respect of 
non-payment of pay in lieu of notice; unlawful deduction of wages; and failure to provide a written statement of terms and conditions of employment to be well-founded and the tribunal Orders the respondent to pay to the claimant the following amount:-

(a)	One week’s net pay at £218.81 per week	=	£218.81

(b)	Two weeks’ gross pay at £250.00 per week	=	£500.00

		Total:		£718.81

Constitution of Tribunal:

Chairman  (Sitting alone):	Mr J V Leonard

Appearances:

The claimant appeared and represented herself.

The respondent was represented by Ms Elaine Francis of the respondent company.

THE ISSUES TO BE DETERMINED AND THE EVIDENCE

1.	The claimant, by claim dated 29 October 2012, claimed against the respondent company in respect of (1) pay in lieu of notice; (2) unlawful deduction of wages; (3) 
non-payment of commission due under contract; (4) failure to provide a written statement of terms and conditions of employment; and (5) failure to provide itemised wages slips.  At the outset of the hearing the tribunal clarified the nature and extent of these claims with the claimant.  In response to the claim, by response dated 5 December 2012 (and as further clarified to the tribunal at hearing), the respondent contended that the claimant, being employed by the respondent, was dismissed with full wages having been paid upon dismissal.  It was contended that the contract was terminated upon due notice; that no commission or bonus properly fell due for payment for the reason that any such did not form part of the contractual terms agreed; and that no monies were outstanding.  The tribunal therefore had to proceed to determine these claims and if determined to be well-founded, the matter of such remedy as might be appropriate.  The tribunal heard oral evidence from the claimant and from Mr Gareth Stewart, a director of the respondent company.  The tribunal also heard oral evidence from Ms Elaine Francis, who indicated that she was responsible for wages and payroll, amongst other matters, in her job function with the respondent company.  The tribunal, in reaching a determination in a matter, also considered some other documentation adduced in evidence, such as is referred to below.

FINDINGS OF FACT

2.	In consequence of the oral and documentary evidence, the tribunal made, on the balance of probabilities, the following findings of fact material to the issues:-

2.1.	The respondent company, Stewart Digital 2 Limited, is a limited liability company of which Mr Gareth Stewart is a director.  The company conducts business from premises at 19 Enterprise Road, Balloo South, Bangor, County Down.  The respondent made a decision to engage an employee specifically for the purpose of conducting direct marketing in order to promote specific products and services by means of targeted promotional marketing campaigns and the development of commercial strategies on behalf of the company.  A written job description in respect of this new post of “Direct Market/Sales Person” was prepared.  This written job description was made available to the local Job Centre in Bangor.  That was done on 25 May 2012.  The claimant contacted the Job Centre and she responded to this invitation by applying for this post.  She was invited to interview and she met with Mr Stewart who discussed the job duties and terms and conditions of employment with the claimant.  The position was offered to the claimant and she agreed to accept the post.

2.2.	Materially, notwithstanding a dispute at hearing between the parties as to the precise nature of what terms had been discussed and agreed either expressly or by implication, the tribunal’s finding is that, orally, a salary of £13,000.00 gross pay annually was expressly offered by Mr Stewart to the claimant.  It was also indicated by Mr Stewart to the claimant in the course of these discussions that there would be a bonus or commission arrangement available.  Mr Stewart indicated in these discussions that it was anticipated, in due course, that this bonus/commission arrangement would produce anticipated earnings for the claimant of in or around £23,000.00 to £24,000.00 per annum.  Whilst this potential earnings issue was certainly discussed, the significant point is that there was no expressly or impliedly concluded agreement made between the claimant and Mr Stewart on behalf of the respondent concerning one particularly significant issue.  That issue concerned the matter of any precisely quantifiable or assessable terms (perhaps in regard to sales volumes to be generated or other work targets to be attained by the claimant) necessary to “trigger” any bonus payment; nor, indeed, was the means of qualification of any such payment, in addition to the basic salary of £13,000.00 per annum, ever discussed and agreed either orally or in writing.  This issue was explored in the course of the hearing with the claimant and it was noted that the claimant conceded, quite candidly, that there was nothing specifically agreed in respect of bonus/commission enabling that to be “pinned down” in contractual terms.  In regard to the less controversial aspects of what was agreed, the claimant was to work five days each week and there was no contractual sick pay arrangement agreed.
2.3.	
The tribunal noted the content of a letter dated 7 June 2012 from Mr Stewart addressed to the claimant, produced by the respondent in evidence.  This letter referred to an interview with the claimant held on 1 June 2012 and confirmed that the annual salary for the full-time position was to be £13,000.00.  The letter also mentioned that there would be discussions regarding a bonus scheme upon the conclusion of a six-month trial period.  Mr Stewart’s evidence was that he had prepared and had signed this letter (in “hard copy” form) and that he had given this to Ms Francis. The evidence from Ms Francis was that she had given this letter to the claimant on 7 June 2012, together with some other papers.  For her part, the claimant strenuously denied having ever seen the letter during the course of this employment and she stated that she had not seen a copy of this letter until just a few days before the tribunal hearing date.  The significance of this relates to the fact that the letter purports to allude to a six-month trial period attaching to the terms of the job offer.  The claimant denied that any such arrangement had ever been agreed.  However, this conflict in the evidence is not as significant as might otherwise seem to be the case for the reason that, irrespective of whether a trial period did or did not apply, the incontrovertible evidence is that no specific bonus/commission terms were agreed between the parties, and that is the significant point to be drawn from all of this.

2.4.	The claimant commenced work with the respondent on 7 June 2012 and she performed the duties of her post for the remainder of that month of June and thereafter throughout July (there being two holiday days in that month).  The employment continued throughout the month of August 2012.  The claimant was on holiday leave for part of that latter month.  The evidence of the claimant was that she went on leave on 2 August and this leave continued until 10 August, inclusive.  That period of leave, when taken together with the August Bank Holiday (when the business was closed), meant that the claimant took eight days’ holiday leave in the month of August.  The employment then continued into September 2012 and the claimant worked all of the normal working days of that month until the employment ended, save for two days when she took leave of absence due to illness.  As mentioned, the agreed arrangement was that the claimant would not be paid contractual sick pay for these two “sick days”.  Whether her ultimate dismissal was on notice or otherwise (and the tribunal will come to that below), the last day of employment was 14 September 2012.  Accordingly, the claimant worked for eight working days in that final month of September.

2.5.	At no stage throughout the duration of this employment was the claimant ever provided with a written statement of main terms and conditions of employment.  A “Company Handbook” is referred to in the letter of 7 June 2012, mentioned above.  However the claimant strenuously denied that she had ever received a copy of that letter.  A copy of a document entitled “sd2 stewart digital 2 ltd contract/handbook” was produced to the tribunal.  The claimant's contention was that she had only seen this for the first time a few days prior to the tribunal hearing date.  On behalf of the respondent it was conceded that this was correct and that the claimant had never been provided with a copy of this document at any time throughout the employment.

2.6.	Mr Stewart contended in his evidence that he had prepared a letter dated 7 September 2012, a copy of which was produced to the tribunal.  However Mr Stewart stated that the letter in question was sent not in “hard copy” form but was rather transmitted by e-mail only to the claimant’s e-mail address.  He stated that he did this personally by attaching the letter to the e-mail as a PDF attachment.  The letter dated 7 September 2012 reads as follows:-

			“As you have been recently aware we have been unable to bring our new website online within the expected timeframe.  This is making it very difficult to handle our normal workload and even harder to process numer-ous (sic) Wedding samples each day.  In fact the samples are causing too much chaos we are starting to lose regular clients to (sic) the lack of customer service.  To this end I have decided to stop all sales, concentrate on retaining our existing clients and make your position redundant one week from today.  When we resolve these issues I will get back in touch with you.”                

2.7.	The claimant strenuously denied she had ever received either this e-mail or the PDF attachment (the letter).  In the course of the hearing Mr Stewart undertook to furnish to the tribunal further evidence which he stated would prove conclusively the effective electronic transmission of this e-mail by him to the claimant.  The tribunal afforded an opportunity to the respondent to produce any further evidence deemed appropriate on this point after conclusion of the oral hearing.  The tribunal also provided an opportunity to the claimant to make any further observations and submissions she wished upon anything thus produced on behalf of the respondent.

2.8.	The tribunal noted an attachment to an e-mail sent to the office of the tribunal by Mr Stewart on 23 January 2013 and the claimant's comments in respect of the attachment thereto (the e-mail being forwarded to her for further comment).  The attachment to Mr Stewart’s e-mail consisted of a “screen shot” with the content of that entirety redacted (as it presumably related to other e-mails or information which the respondent had decided did not concern this tribunal) save for the first item present in the “screen shot”.  The unredacted portion of this purported to indicate that an e-mail had been sent to the claimant's e-mail address on 9 July 2012 which had an attachment of “114K” (presumably referring to the size of the attachment in kilobytes of data).  The claimant's observation in respect of this, when afforded by the tribunal with an opportunity to make further comment, was that this was not what Mr Stewart had told the tribunal he would send as proof of the termination notice email.  An electronic copy of the email was what the claimant stated was expected, not a “screen shot” of a “sent box”.  The claimant contended that such a “screen shot” could be easily manufactured using such methods as Photoshop, or by simply changing the date on a server and making up a contact using an e-mail address as a contact name.  The claimant requested that Mr Stewart send to the tribunal the e-mail complete with attachments, electronically, so that it could be checked for authenticity.  In response to this, Ms Francis, on behalf of the respondent, stated that great exception was taken to the challenge to the integrity and the provenance of this e-mail and to it being called into question by the claimant.  Ms Francis stated in an e-mail to the tribunal that the respondent had provided all the information that it could provide and had been as helpful as possible.

2.9.	
Accordingly, the tribunal had to determine, in the light of this factual dispute, if proper and due notice of termination of employment had been provided by the respondent to the claimant.  The significance of this, of course, is that the September letter purported to dismiss the claimant upon one week’s notice.  The claimant’s position was she had been dismissed summarily and without any notice on 14 September 2012.  The tribunal's determination in respect of the factual issue as to whether or not a letter giving due notice of termination of employment was effectively brought to the attention of the claimant, is that the tribunal prefers the evidence of the claimant in that the respondent has not satisfied the tribunal that, as a matter of fact, the respondent effectively give due and proper notice of termination to the claimant in advance 
of the contract being terminated, the contractual termination date being 14 September 2012.  Thus the tribunal’s finding is that the contract was summarily terminated by the respondent, without notice.

2.10.	The claimant contended, further, that she did not receive itemised pay statements from the respondent for the first two months of employment but only for months three and four.  The respondent produced wages records purporting to be in respect of all four months of employment.  These indicated that in the first month, ending 30 June 2012, the claimant’s gross wage was £850.00 and the net wage was £789.28; in the month ending 31 July 2012 the gross wage (for the full month) was £1,083.33 and the net wage was £948.17; in the month ending 31 August 2012 the gross wage was £1,083.33 and the net wage was £948.17; and in the final month, with the employment ending on 14 September 2012, the gross wage was £300.00 (with no deductions).  When questioned regarding the latter, the respondent indicated that this final wage was paid gross, without deductions, upon advice from the respondent’s accountants.  On the basis of the evidence, the applicable net weekly wage is therefore £218.81 (£948.17  x  12/52  =  £218.81).

2.11.	The claimant, it seems, took no issue in regard to the first three months’ wages.  She contended, however, that the final instalment of wages was deficient in that there were unauthorised deductions.  The respondent’s explanation of the position, as provided by Ms Francis, was that the monthly gross wage was 1/12th of the annual gross wage of £13,000.00; that equated to £1,083.33 per month, or £250.00 per week.  This was the equivalent of £50.00 per day.  Ms Francis stated that the claimant was entitled to 28 days’ annual leave, in total, including public and privilege holidays, which she referred to as being “statutory days” (this would indeed equate to the statutory entitlement mentioned below).  The respondent's office was closed for three public/privilege holiday days on 12 and 13 July and 27 August (the latter being the Summer Bank Holiday) and also the claimant had been ill for two days and was thus not entitled to be paid for these latter two absence days.  The evidence before the tribunal was that these two days in respect of which the claimant was absent due to illness were 12 and 13 September 2012 and that appears to be the case.

2.12.	Regrettably, the tribunal’s task was not made easier by the tribunal not being provided with a schedule of working days to correlate to any calculation of the payments made for the respective months.  Notwithstanding this, the position appears to be as follows:-

			June 2012	-	17 working days.

			July 2012	-	20 working days and 2 public/privilege holidays.

			August 2012	-	15 working days, 7 days annual leave taken and one day public/privilege holiday day (being 8 holiday days in total).

			September 2012	-	8 working days and 2 sick days (latter unpaid).

2.13	When questioned by the tribunal as to how the annual leave had been computed in respect of the foregoing, the evidence of Ms Francis was that the claimant was entitled to 1.7 days leave per month and that she had taken 8 days leave, plus 3 “statutory days” and that the claimant was therefore entitled to 4.8 days leave plus 3 “statutory days”.  The computation, on those terms, Ms Francis stated, produced a wages entitlement for the final month of 5.8 days which was rounded up by the respondent to 6 days, thereby producing the figure of £300.00 computed at £50.00 per day, without any deductions in that final month’s pay.  The tribunal did not need to determine any further material facts for the purposes of the determination.

THE APPLICABLE LAW

3.	

3.1	In regard to the claimant’s claim of breach by the respondent of the working time statutory provisions, Regulation 13 and 13A of the Working Time Regulations (Northern Ireland) 1998 as amended by the Working Time (Amendment) Regulations (Northern Ireland) 2007 (“WTR”) applies and the tribunal may make an appropriate order.  WTR provides that a full-time worker is entitled to 5.6 weeks’ paid annual leave (or to pay in lieu thereof).  Thus the current statutory annual leave entitlement is 28 days, capped at that figure and pro-rated as necessary.  Regulation 15 deals with the provisions for taking leave and for arranging leave dates and Regulation 16 provides that a worker is entitled to be paid in respect of any period of annual leave to which he or she is entitled under regulation 13, at the rate of a week’s pay in respect of each week of leave.

3.2	The Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”), Article 118, provides that the statutory minimum period of notice required to be given by an employer to terminate the contract of employment of an employee who has more than one month and less than two years’ continuous service is one week.  In the absence of evidence of enhanced contractual terms, this minimum statutory notice is deemed to be incorporated into any contract of employment.  It is a breach of contract on the part of any employer to fail to provide either pay in lieu of notice or due notice upon termination of employment.  A breach of contract claim may be brought under the terms of the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994.  This enables an employee such as the claimant to recover sums due under a contract of employment which arise or are outstanding upon termination of any employment.

3.3	Article 45 (1) of the 1996 Order provides that: "An employer shall not make a deduction from wages of a worker employed by him unless – (a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or (b) the worker has previously signified in writing his agreement or consent to the making of the deduction".

Article 45(3) of the 1996 Order provides that: "Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion".

	The Court of Appeal in England in the case of Delaney  -v-  Staples (t/a De Montfort Recruitment) [1991] ICR 331, held that there was no valid distinction to be drawn between a deduction from a sum due, and non-payment of that sum, as far as the relevant statutory provision was concerned.  Article 59 of the 1996 Order provides that the definition of “wages”, in relation to a worker, means: "... any sums payable to the worker in connection with his employment, including - (a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise...", subject to certain statutory exceptions which do not apply to the facts of this case.

3.4	Articles 33 and 36 of the 1996 Order require an employer to provide an initial statement in writing of employment particulars and also covering any subsequent changes to particulars.

3.5	The Employment (Northern Ireland) Order 2003 ("the 2003 Order") amended the 2006 Order.  Notwithstanding subsequent changes to the statutory provisions, the dismissal and disciplinary proceedings remain unchanged.  These provisions include, specifically, at Article 27 of the 2003 Order, the stipulation that the tribunal shall make a minimum award of either two weeks’ or, if in all the circumstances it considers it just and equitable to do so, four weeks’, gross pay if there is a breach of the requirement to provide such a written statement of employment particulars by the employer.  This entitlement applies only where the tribunal finds in favour of any claimant in respect of proceedings concerning specific statutory entitlements.  These specified entitlements include unauthorised wages deductions and breach of contract proceedings.

3.6	Article 40 of the 1996 Order, requires any employer to provide written itemised pay statements to the employee containing the information specified in Article 40 (2).

THE TRIBUNAL’S DECISION

4.	The most significant issue in this case, in financial terms, relates to the claimant’s claim that she would be contractually entitled to a bonus or commission payment by the respondent.  Notwithstanding this claim, when this issue was explored by the tribunal with the claimant in the course of the hearing, the claimant did concede that there was no specific agreement reached with the respondent which would enable the employer to compute any bonus or commission payment nor, indeed, to enable the employer to determine when any such might have arisen.  The tribunal does accept, for this was not contraverted by Mr Stewart in his evidence, that there was an indication given to the claimant in the initial discussions enabling her to aspire at some stage to achieving a salary, including bonus or commission, of in or around £23,000.00 to £24,000.00 per annum.  The difficulty for the claimant here is that there would need to be something expressly agreed, something with sufficient certainty and precision in the nature of a contractual agreement, to enable the tribunal to make a determination in the claimant's favour that additional monies were due.  Furthermore there is nothing enabling the tribunal to compute how much might be due under any clear and unambiguously agreed arrangement.  The claimant indeed, very candidly, conceded that this would be an impossible task for the tribunal in the light of all of the evidence.  Accordingly, and without any difficulty, the tribunal does not find the claimant's claim for an authorised wages deduction or breach of contract concerning the specific bonus or commission issue to be 
well-founded.  That aspect of the claimant's claim is dismissed by the tribunal, without further order.

5.	Examining then the claimant’s contention that the final salary paid was subject to unlawful deductions, the tribunal regrettably found some of the evidence of the parties to be imprecise and a little unhelpful.  The tribunal noted that it was not assisted with the provision of any schedule clarifying the payments made and clearly illustrating the basis for any wages calculations.

6.	Examining the provisions of WTR mentioned above, as the period of employment commenced on 7 June 2012 and ended on 14 September 2012, this equates on a pro-rated basis under Regulation 13 and 13A of WTR to 7.5 days annual leave.  The tribunal was somewhat puzzled by the statement on the part of the respondent that the claimant took eight days’ holiday leave plus the three “statutory days”.  The claimant’s evidence was very clear in that she took seven days annual leave and she also had the benefit of the three public/privilege holiday days.  This claimant’s evidence, which the tribunal accepts as factually correct, thus indicates that 10 days’ leave was taken, not 11 days’.  Thus, excess leave taken by the claimant amounted to 2.5 days. The respondent was entitled to deduct that excess from the final wages afforded.  The number of working days worked by the claimant in the final month amounted to 8 days (deducting the two sick days).  Then, further deducting the 2.5 days in regard to excess leave taken, that produces a figure for paid working days to be remunerated in the final month of 5.5 days.  The claimant was paid £300.00.  This sum, the respondent states, equates to six days’ pay.  Any outstanding balance of wages due but unpaid by the employer would otherwise have constituted an unlawful deduction of wages.  However, in this case there appears to be no deficiency to be compensated under Article 45(3) as an unauthorised deduction, upon the facts.  Accordingly the claimant's claim in this respect is not well-founded and is dismissed by the tribunal.

7.	As mentioned above, Article 118 of the 1996 Order provides that the statutory minimum period of notice required to be given by the employer to terminate the contract of employment under these circumstances is one week.  The tribunal has determined that such contractual notice was not given and that the employment was summarily terminated by the respondent.  This also falls within a claim for breach of contract under the provisions of the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994.  This part of the claimant's claim is 
well-founded and the claimant is thus entitled to one week’s pay in lieu of notice.
8.	
Article 40 of the 1996 Order, requires any employer to provide written itemised pay statements to the employee containing the information specified in Article 40 (2).  However the tribunal does not determine, upon the facts, that there is any breach of these provisions and accordingly the claimant's claim in this respect is dismissed.

9.	Articles 33 and 36 of 1996 Order require the provision of written employment particulars.  Article 27 of the 2003 Order applies to proceedings before a tribunal relating to the claims set forth in Schedule 4 to the 2003 Order.  This entitlement applies only where the tribunal finds in favour of any claimant in respect of proceedings concerning specific statutory entitlements.  In this case these specified entitlements in regard to which the tribunal has found in favour of the claimant include breach of contract under the provisions of the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994.  At no stage throughout the duration of this employment was the claimant ever provided with a written statement of main terms and conditions of employment.  That was effectively conceded by the respondent.  That being the case, the tribunal is required to make one of the specified awards unless there are exceptional circumstances which would make such an award unjust or inequitable.  The award is, at the tribunal’s discretion, either two or four weeks’ (gross) pay.  In this case the tribunal does not determine that there are any exceptional circumstances which would make such an award unjust or inequitable.  The tribunal accordingly determines that it is just and equitable to make an award of two weeks’ pay under these particular circumstances.  This is included in the award set out below.

10.	The tribunal therefore finds the foregoing part of the claimant’s claims to be 
well-founded and Orders the respondent to pay to the claimant as follows:-

	(a)	One week’s net pay at £218.81 per week	=	£218.81

	(b)	Two weeks’ gross pay at £250.00 per week	=	£500.00

			Total:		£718.81

11.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing:       17 January 2013, Belfast.

Date decision recorded in register and issued to parties: