Coyle v Unibol Ltd (NI)& Ors  (Preliminary Issue : Employment Rights)  (25 June 2002)
THE INDUSTRIAL TRIBUNALS

CASE REF:	3160/01

APPLICANT:	Patrick Coyle

RESPONDENTS:	1.  Unibol Limited (NI) 
			2.  California Software Corporation
			3.  Unibol Inc
			4.  Unicomp

DECISION
The unanimous decision of the tribunal is that the applicant was not unfairly dismissed contrary to Article 126 of the Employment Rights (Northern Ireland) Order 1996.  Accordingly the applicant’s complaint for unfair dismissal is dismissed.

The tribunal declares that the second named respondent was in breach of the applicant’s contract of employment and made unauthorised deductions from the wages of the applicant contrary to Article 45 of the Employment Rights (Northern Ireland) Order 1996.  In accordance with Article 56(a) of the Employment Rights (Northern Ireland) Order 1996, the second named respondent is ordered to pay £4,823.28 to the applicant. 

Appearances:
The applicant was represented by Mr Mark McEvoy, Barrister-at-Law, instructed by The Law Centre (NI). 
There was no representation on behalf of the respondents at hearing. 

SUMMARY REASONS

1.	The applicant alleged that the first and second named respondents failed to pay him any wages for April and May 2001, due and owing for work done in accordance with his contract of employment, therefore he was entitled to leave his employment on 21 June 2001.  Further the applicant alleged they unlawfully withheld payment in respect of holiday entitlement accrued at that date.  The first named respondent in the Notice of Appearance accepted that the applicant was an employee but did not indicate the dates of that employment.  It denied that the applicant had been constructively dismissed or subject to any breach of contract, unlawful deduction of wages or holiday pay.  The second named respondent denied that it had ever employed the applicant or that it was responsible for any constructive dismissal, breach of contract, unlawful deduction of wages or holiday pay.  No appearance was entered either by or on behalf of the third named respondent and the fourth named respondent denied any direct employment relationship with the applicant. 

2.	The tribunal heard oral evidence only from the applicant.

3.	The tribunal having heard the evidence and considering all the documentation before it found the following facts: -

4.	From March 1994 the applicant was seconded to work in the United States at Unibol Incorporated, which was in accordance with the Statement of Main Terms and Conditions provided to him.  His salary continued to be paid by the first named respondent to an account in Northern Ireland and was subject to United Kingdom taxes.

5.	Prior to 8 November 2000 the fourth named respondent was a parent company of the first and third named respondents.

6.	On 8 November 2000 all shares in the first named respondent were purchased by and transferred to the second named respondent.  The first named respondent at that time became a wholly owned subsidiary of the second named respondent.  The first and second named respondents at that time became “associated employers” within the terms of Article 4 of the Employment Rights (Northern Ireland) Order 1996.

7.	On 29 January 2001 employees of the second named respondent entered the premises of the first named respondent in Belfast and physically took control of the premises and staff.

8.	In February 2001 the applicant attended a meeting in the headquarters of the second named respondent.  The second named respondent, through their employee Carol Conway, a member of their management team, made clear to the applicant that he was not to perform “revenue generating work” for or on behalf of the third and fourth named respondents.  The applicant raised at that meeting the non-payment of his salary since January 2001 and the second named respondent agreed to pay the outstanding salary and expenses for attending the meeting. 

9.	On 1 March 2001 a lodgement was paid into the applicant’s bank account with Ulster Bank Limited in respect of the applicant’s salary for January and February 2001. 

10.	In late February 2001 the applicant and the second named respondent agreed that the applicant could take some annual leave prior to returning to Belfast at the end of March 2001. 

11.	On 6 March 2001 legal proceedings in the United States of America involving the second and fourth named respondents resulted in the second named respondent being unable to communicate with the applicant without breaching the court order obtained by the fourth named respondent.  The applicant was aware that this was a reason for the second named respondent not communicating directly with him.

12.	The applicant received his salary for March 2001 on the 2 April 2001.  No further payments were received after that date.  The tribunal calculated that over the period January to March 2001 the applicant’s weekly nett salary was £ 438.48.

13.	In early April 2001 the applicant became aware that the court order obtained in the United States of America had been lifted.  On 27 April 2001 an email exchange between the fourth and second named respondents was shared with the applicant by Steve Hafer, a former director of the first named respondent and a member of the management team of the third and fourth named respondents.  The email exchange made clear that the second named respondent was enquiring as to whether the applicant wanted to work for them and indicating that they “could really use him in Belfast right now”.  It also stated that they were not intending to include the applicant in the April payroll as he had been “working exclusively for Atlanta”.

14.	The applicant was content, after speaking to Stephen Hafer on 30 April 2001 to take no immediate action and to await developments in the settlement of matters between the second and fourth named defendants.  The applicant made no attempt to contact the second named respondent in writing regarding the matters raised in the email of the 25 April 2001.  The applicant was of the view that as long as he was in America he was in a better position to get alternative work.

15.	In the third week of May 2001 the applicant reached agreement with Stephen Hafer for payment of past accrued commission on a monthly basis at a rate equal to his salary level.  At the same time the applicant instructed solicitors to correspond with his employers regarding the non-payment of wages.  A letter dated 23 May 2001 was sent on his behalf to the Belfast address of the first and second named respondents.

16.	The second named respondent replied through their attorneys by letter dated 30 May 2001 and there followed an exchange of correspondence between the solicitor for the applicant and the legal representative of the second named respondent. 

17.	On 31 May the applicant spoke to his solicitors.  On 1 June the applicant contacted the manager of the Belfast office whom he had been requested to “report to” on the 1 June”.  The manager, Lynette Kane advised that she would get back to him later that day.  On the same date the applicant’s solicitors wrote and faxed a letter dated 1 June to the second named respondent’s attorneys.  The letter stated that if the matter of the non-payment of wages and the applicant’s employment status is “not resolved without further delay I will have no alternative but to advise my client to resign and claim constructive dismissal for breach of contract and statutory rights”.  At 4.47 p.m. Lynette Kane emailed the applicant at ‘patrick.coyle@unicomp.com’ and copied it to Carol Conway.  The email stated that while “they would respond via email to technical support issues” the applicant would need to work through his attorney and their attorneys about his “situation”.

18.	The second named respondent’s attorney’s responded by letter dated 5 June 2001 and enquired as to when they may expect the applicant in Belfast.

19.	An email exchange took place between Carol Conway and Stephen Hafer on 19 June 2001 regarding a distribution agreement.  However it also enquired as to “what do you want to do about poor Paddy?”  This email was shared with the applicant. 

20.	On 21 June 2001 the applicant’s solicitors on his behalf formally gave notice of his intention to resign due to the unlawful deduction of wages and the employer’s repudiation of the Contract of Employment.

21.	The correspondence from the attorneys instructed by the second named respondent was consistent with the email of 25 April and 19 June.  It was the opinion of the tribunal that these written documents could not be interpreted as indicating an intention by the second named respondent to repudiate the contract of employment. 

22.	The terms relating to holiday entitlement was contained in clause 9 of the applicant’s Statement of Main Terms and Conditions.  In 2000 to 2001 a variation of that clause was agreed reducing the statutory or customary number of days from 10 to 5 and increasing the annual holidays from 22 to 28.  Under the clause the applicant could at maximum have accrued eleven days holiday entitlement from 1 January 2001 to 21 June 2001.  However the applicant in February 2001, with the agreement of Carol Conway had postponed returning to Belfast until the end of March so that he could take leave prior to his return to Belfast.

23.	Clause 19 and Appendix 3 of the applicant’s Statement of Main Terms and Conditions set out the terms of a Grievance Procedure.  The applicant did not avail of the Grievance Procedure. 

24.	Written submissions were submitted on behalf of the applicant.

25.	The tribunal considered Articles 126 and 127 of the Employment Rights (Northern Ireland) Order 1996.  The tribunal considered the facts found and in particular the period between the applicant terminating his employment and from when he first knew that he might not be paid for April 2001.  While the obligation to pay wages is a fundamental term of a contract of employment – R F Hill Ltd v Mooney [1981] IRLR 258; a failure to pay wages on the due date “may amount to conduct which constitutes a fundamental breach indicating that the employer has no intention thereafter of honouring the contract and thus justifying the employee in resigning.  But the circumstances of each case must be looked at” – Adams v Charles Zub Associates Ltd [1978] IRLR 551.  In this instance the failure to pay was not “unexplained” – Cantor Fitzgerald International v Callaghan [1999] ICR 639.  The tribunal took note of the knowledge that the applicant had of the reasons for non-payment and in particular his failure to clarify the situation with the second named respondent directly once he had seen the terms of the email of 25 April 2001.  The tribunal concluded that the reason for the termination of the applicant’s employment was because he did not wish to return to Belfast to work and once he had made alternative arrangements for paid remuneration in the United States of America the applicant determined to terminate his employment.  The tribunal concluded that the applicant had not been entitled on 21 June 2002 to terminate his employment without notice - Western Excavating (ECC) Ltd v Sharp [1978] IRLR 27 CA.  

26.	The tribunal considered Article 45 of the Employment Rights (Northern Ireland) Order 1996.  The tribunal concluded that the respondent’s withholding of pay from the 1 April 2001 up to and including the 21 June 2001 was unlawful within the terms of Article 45 of the Employment Rights (Northern Ireland) Order 1996. 

27.	The applicant claimed for 28 days holiday pay as due and owing to him.  This clearly is not a true and valid claim under the terms of his Statement of Written Terms and Conditions.  The tribunal could not be satisfied, on the balance of probabilities, as to the value if any of this element of the applicant’s complaint and accordingly makes no order in respect of holiday pay.

28.	Delaney v Staples (t/a De Montfort Recruitment) 1991 IRLR 112 CA is authority that “deductions” as referred to in Article 45 of the Employment Rights (Northern Ireland) Order 1996 includes a failure or refusal to pay monies.  Accordingly, the tribunal declares that the respondent made unnotified deductions from the pay of the applicant contrary to Article 45 of the Employment Rights (Northern Ireland) Order 1996 in the sum of £4,823.28.

29.	The applicant did not receive income support or jobseekers allowance. Accordingly the Employment (Recoupment of Jobseeker’s Allowance and Income Support) Regulations (Northern Ireland) 1996 do not apply.

This decision is a relevant decision under the Industrial Tribunals (Interest) (Northern Ireland) Order 1990.

Chairman:

Date and place of hearing:  4 and 19 March 2003, Belfast

Date decision recorded in register and issued to parties: