THE INDUSTRIAL TRIBUNALS 

CASE REF:          6857/09

CLAIMANT:	                  Elizabeth Victoria Rolston

RESPONDENTS:	       1. Craig Bennett

       2.	Dreemore Developments Ltd (in administration)

                                       3.	BC (NI) ltd

DECISION

The decision of the tribunal is that the tribunal awards the claimant £782.30 in respect of her claims for a redundancy payment and unpaid wages.

Constitution of Tribunal:

Chairman (sitting alone):		Mr I Wimpress

Appearances:

The claimant was unrepresented and appeared on her own behalf

The respondents did not appear and were not represented 

The Claim and the Response

1.	In her claim form dated 21 August 2009, the claimant brought claims for a redundancy payment and unpaid wages, (including back pay) against Mr Craig Bennett Dreemore Developments Ltd / BC (NI) Ltd arising from the termination of her employment as a sales assistant on 8 April 2009.  

2.	On 6 October 2009, Mr Cavanagh of Cavanagh Kelly, a firm of chartered accountants and insolvency practitioners, wrote to the tribunal office.  In the letter, Mr. Cavanagh advised that he had been appointed as Administrative Receiver in respect of Dreemore Developments Ltd on 2 February 2009 and that all the employees which included the claimant were transferred to BC (NI) Ltd on 1 December 2008.  Mr Cavanagh enclosed a copy of his Letter of Appointment, the relevant sections of a Business Sales Agreement together with a schedule which listed all employees who had been transferred.  Mr Cavanagh concluded the letter by stating that he did not believe that there were grounds for any claim against Dreemore Developments Ltd.  

3.	A Case Management Discussion took place on 6 November 2009 which resulted in BC (NI) Ltd being joined to the proceedings. The tribunal office wrote to BC (NI) Ltd at 97A Main Street, Fintona on 17 November 2009 advising that it had been joined as a party to the proceedings and provided instructions as to how to respond to the claim.  No response was filed by BC (NI) Ltd.

Sources of Evidence

4.	The tribunal heard oral evidence from the claimant and received a number of documents from her which included Part 2 of a P45, P60s from 2006 to 2009, a number of pay slips, two cheques and some correspondence.   None of the respondents appeared at the hearing of this matter on 22 January 2010 but Messrs McGrigors, Solicitors, filed written submissions in advance of the hearing on behalf of the Administrative Receiver, Mr Cavanagh.  

The Facts

5.	The claimant's date of birth is 18 November 1949.  The claimant commenced working for Mr Bennett on 2 October 2006. Mr Bennett was appointed as Sub Postmaster and engaged the claimant as the Post Office Manager in Lisbellaw Post Office.  The claimant worked a 37.5 hour week and was paid £6.50 per hour gross.  The claimant did not have a contract of employment.  In addition to her basic pay the claimant received mileage as part of her responsibilities involved servicing an outreach Post Office in Fivemiletown.  

6.	On 9 April 2009 the claimant came in to work as normal and discovered that the business was closed.  The claimant contacted the Post Office which sent down a manager, Mr Brian Robinson.  The Post Office then closed for a week on Mr Robinson's directions.  A temporary Sub Postmaster was installed to keep the operation running and the claimant was asked by the Post Office to stay on as a temporary Sub Postmistress.   The Post Office re-opened on 17 April 2009.   

7.	Following the closure of the Post Office the claimant received two cheques from Janet Smiton who was employed by Mr Bennett in the Fintona office.  The first cheque was for £276.25 and the second was for £878.83.  Both cheques were signed by Mr Bennett and stamped “Bennett & Selvin Spmrkts Ltd".  No particular shop or business was known as Bennett & Selvin Supermarkets and to the best of the claimant’s knowledge all of the shops run by Mr Bennett closed.  

8.	The first cheque was honoured by the bank.  The second cheque was post dated 17 April 2009 and was not honoured.  The claimant also received a pay slip which covered both cheques.  It totaled £1155.08 and was broken down as follows:

Basic Pay    				   £39.00 (6 hours)

Back Pay    				 £382.79

Redundancy Pay  			 £828.75

The pay slip gave the employer's name as BC (NI) Ltd.  The claimant’s pay was less than normal as she had been off work on sick leave during the last weeks of her employment.

9.	The claimant wrote to Mr Bennett on 1 June 2009 and asked him to make good the payment on the £878.83 cheque but she received no reply.  The claimant's P60s for the years 2006/2007 and 2007/2008 gave Dreemore Developments Ltd as her employer.  The claimant’s P60 for 2008/2009 gave BC (NI) Ltd as her employer.  The claimant's pay slips from June 2008 to December 2008 gave Dreemore Developments Ltd as her employer.  From January 2009 onwards the pay slips gave BC (NI) Ltd as her employer.  When the claimant worked for Mr Bennett she received cheques from Dreemore Developments Ltd and this lasted up until the change of ownership to BC (NI) Ltd.  

10.	The claimant recognised Mr Bennett’s signature on the Business Asset Transfer Agreement which he signed as a Director of Dreemore Developments Ltd.  She also recognized the signature of Eugene Donnelly who signed the document as a Director of BC (NI) Ltd.  The claimant also knew Mr Donnelly to see but had no dealings with him.  

Submissions

11.	The claimant’s case rested on her evidence to the tribunal and understandably she did not seek to advance any legal submissions.  The claimant made clear however that in addition to a redundancy payment she was seeking the full amount set out in her final pay slip save for the partial payment made by the first cheque.  This comprised back pay and her last week's wages.  

12.	In their written submissions to the tribunal, Messrs McGrigors submitted that the claimant had been transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") from Dreemore Developments Ltd to BC (NI) Ltd by a Business Asset Sale Agreement dated 1 December 2008.  Clause 10.1 of the Agreement provides as follows:

"TUPE applies to the sale and purchase of the Business effected by this Agreement and accordingly the contracts of employment between the Employees and the Seller [Dreemore Developments Ltd] shall not terminate as a consequence of the Agreement and shall transfer to the Buyer [BC(NI)Ltd] with effect from the completion date [1 December 2008] pursuant to TUPE." 

13.	It was further submitted that this was a normal solvent transfer as Dreemore Developments Ltd, the transferor, was not the subject of insolvency proceedings at the time of the transfer on 1 December 2008.  As the claimant's claim  accrued  both after the transfer and after Dreemore Developments Ltd had entered into administrative  receivership on 2 February 2009, the amounts claimed were not liabilities arising during employment with Dreemore Developments Ltd or related to transfer or the insolvency proceedings [Article 8 TUPE].  Under Articles 45,118, 120 and 170 of the Employment Rights (NI) Order 1996 liability in respect of unlawful deduction from wages, obligations in respect of notice and entitlement to redundancy payments fell to be dealt with by the employer and BC (NI) Ltd was the claimant's employer during the relevant period rather than Dreemore Developments Ltd.  In essence it was contended that all liabilities in respect of the claimant's employment transferred to BC (NI) Ltd on 1 December 2008 and liabilities accruing after that date were the sole responsibility of BC(NI) Ltd.  The submission also drew attention to the consequences of the tribunal finding that any of the outstanding amounts related to past employment with Dreemore Developments Ltd.  It was submitted that if this occurred these liabilities would not be regarded as preferential debts within the meaning of Schedule 6 of the Insolvency Act 1986 and that it would therefore be unlikely that there would be funds available to meet such an award.  The submission concluded by requesting that Dreemore Developments Ltd and the Administrative Receiver be removed as respondents in the proceedings.

The Law

14.	Article 170 of the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”) provides that an employer shall pay a redundancy payment to any employee in the event that the employee is dismissed by the employer by reason of redundancy.  Circumstances in which an employee who is dismissed shall be taken to be dismissed by reason of redundancy are set out in Article 174 of the 1996 Order. This provides as follows: 

		“For the purposes of this Order an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to (a) the fact that his employer has ceased or intends to cease (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business— (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.” 

          15.    	Article 197 of the 1996 Order sets out how the amount of the redundancy 
         	payment should be calculated with reference to length of service and age of 
         	the employee.  

16.	The Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 (“the 1994 Order”) provides that an employee may bring a claim for damages for breach of contract of employment or for a sum due under that contract if the claim arises or is outstanding on termination of employment.  
Conclusions

 17.	The tribunal's knowledge of BC (NI) Ltd is limited to the Business Sales Agreement and the submissions filed by Messrs McGrigors.  In this regard the tribunal takes into account the information placed before it by the Administrative Receiver, Mr Cavanagh.  It is apparent that none of the stores are now trading notwithstanding the statement in paragraph 2.1 of the Business Asset Sale Agreement of the intention to carry on with the business as a going concern.  The tribunal does not however have the means to look behind this document  and based on all of the evidence presented it is clear that the business transferred for better or worse to BC(NI) Ltd on 1 December 2008.  Accordingly I am satisfied that the award should be made against BC (NI) Ltd.

18.	Although the Post Office may have contributed to the claimant's wages through its payment to Mr Bennett to run the Post Office the claimant's wages were at all material times paid by either Dreemore Developments Ltd or BC (NI) Ltd.  The precise financial arrangements between the Post Office and Mr Bennett are not known to the tribunal. 

19.	The claimant is clearly entitled to a redundancy payment based on two completed years of service.  The amount must be based on her basic gross pay alone with no enhancement due to mileage.  The claimant is also entitled to her last weeks wages and back pay as these payments were outstanding on the termination of her employment.  The value of the cheque that was honored must be deducted from this aspect of the award.

Award

20.	Redundancy Pay   £243.75 x 1.5 x 2 (gross pay)		£731.25

	Unpaid Wages			   £39.00

Back Pay				 £382.76
			Sub Total	 £421.76

Less PAYE & National Insurance	   £94.46
				
 £327.30

Less cashed cheque		 £276.25

Sub Total   								£  51.05

							     TOTAL AWARD £782.30

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

Chairman:

Date and place of hearing: 22 January 2010, Enniskillen

Date decision recorded in register and issued to parties: