THE INDUSTRIAL TRIBUNALS

CASE REF:  1179/16

CLAIMANT:			Michael Gwynne

RESPONDENT:		Viribright Lighting Ltd

DECISION 
The decision of the tribunal is that the claimant was dismissed and is entitled to unpaid wages.  He is hereby awarded the sum of £9,067 in compensation.

Constitution of Tribunal:
Employment Judge:	Employment Judge Murray
Members:			Mr I Foster
				Mrs E Gilmartin

Appearances:
The claimant represented himself.
The respondent did not appear and was not represented.

The claim

1.	The claimant claimed that he was dismissed and/or constructively dismissed and that that dismissal was unfair.  The claimant also claimed unpaid wages.  The respondent’s case on the papers was that the claimant had resigned.

Sources of Evidence

2.	The respondent was represented by Peninsula Business Services until 22 August 2017 when they came off record.  On that date a bundle was lodged on behalf of the respondent by Peninsula together with witness statements from Mr Linger, Mr Johnson and Mr Leung.  

3.	The letter from Peninsula of 22 August 2017 stated that the respondent company had ceased trading or was in the process of ceasing trading, that the witnesses for the respondent no longer worked for the company and would not be in attendance at the tribunal and that Mr Leung could not attend (he was the CEO of the parent company, Matrix Ltd). 

4.	An unsuccessful application to adjourn the case due to the unavailability of Mr Leung had been made the week before the hearing and was refused by an Employment Judge partly on the basis that it was not clear that Mr Leung could give relevant evidence.  In Peninsula’s letter of 22 August they gave some further detail as to the relevance of the evidence by Mr Leung.

5.	In so far as it was necessary for the tribunal to determine the matter, any application for an adjournment which was made in the letter of 22 August was rejected.  The primary reasons for rejecting any suggestion that the case should be adjourned was firstly, because it was not clear that Mr Leung would be unable to attend (on the evidence before the tribunal) and, secondly, it was not clear as to the relevance of the evidence by Mr Leung, particularly in view of the brief nature of his witness statement lodged on 22 August 2017.  

6.	The Employment Judge put key points from the respondent’s statements to the claimant for his comment.  The respondent’s statements were taken into account in so far as there was agreement on aspects of their content.  On contentious matters the respondent’s statements were given no weight whatsoever.

Findings of Fact and Conclusions    

7.	The tribunal had regard to the documentation to which it was referred, the claim and response forms and the respondent’s statements in so far as they were relevant to agreed points.  The claimant gave evidence on his own behalf and we had a statement and oral evidence from the claimant’s witness, Mr Tracey of Fornax, which is a rival company of the respondent.  The tribunal considered all the evidence both oral and documentary to reach the following findings of fact and conclusions by applying the legal principles to the facts found.

8.	The claimant was employed as a regional sales manager from 1 February 2014 to 26 February 2016.  

9.	The claimant’s case was that he was dismissed in a Skype conversation on 15 February 2016 when he was told by his managing director, Mr Linger, that the managing director of the parent company, Mr Leung, wanted him out of the organisation.  On the claimant’s evidence Mr Linger, his manager, put to him two options namely, firstly that the claimant would resign and work on a commission basis for the company or secondly that he would remain employed by the company but would be disciplined in relation to the concerns about his conduct and performance.

10.	The claimant agreed to consider the matter and was on paid leave for the next few days.

11.	There then ensued correspondence between the parties whereby the claimant alleged that he had been sacked in the Skype conversation and Mr Linger alleged that he had not and that they were in negotiations in order to facilitate the claimant’s alleged request to go on a commission basis rather than an employed basis.

12.	On the claimant’s account he tendered his resignation by letter of 26 February 2016 because he had been locked out of the company’s systems and his company credit card had been stopped as at 16 February 2016.

13.	We were dissatisfied with some of the evidence of the claimant in that he contradicted himself on several key points as follows:-

(1)	He at first stated that at no point was it mentioned in the conversation with Mr Linger on 15 February that the claimant might go on a commission basis rather than an employed basis.  The claimant then changed his evidence to say that this was mentioned but it was not at his suggestion but at Mr Linger’s suggestion.

(2)	The claimant was adamant that he had been instructed to stay at home and not to go out to sell for the period leading up to February 2016 and that this meant that any criticism of his performance was unjustified because he was acting on management instruction. The contemporaneous documents from the claimant himself however contradict that position and when the claimant was asked to clarify he then changed his evidence to say that he had had to stay at home intermittently over a two year period rather than go out and sell.

(3)	The claimant gave unsatisfactory evidence in relation to his financial loss and provided no documentation nor coherent evidence on key points in relation to financial loss.

14.	We are not satisfied that the claimant has shown that he was dismissed in the conversation of 15 February 2016 given that the contemporaneous exchange of messages and documents could point either way and given our concerns about the reliability of the claimant’s evidence.  The claimant has not therefore discharged the burden of proof on this point.
  
15.	We find however that the claimant was constructively dismissed as at 26 February 2016.  The fact that the claimant was locked out of company systems on 16 February 2016 meant that he could no longer perform his role.  The claimant’s explanation for the time gap between 16 February and 26 February was that he was seeking advice from a friend who had HR experience in a company.  We are satisfied from an analysis of the contemporaneous documentation that there is support for the claimant’s account and in the absence of any challenge from the respondent we accept that he resigned in response to being locked out of company systems and that he did not delay too long in doing so.  We specifically find that he did not leave in order to take up a job with Fornax given the clear evidence of Mr Tracey (which we accept) which was that at no point has the claimant ever been made a job offer by his company.

16.	We find that the effective date of termination was 26 February 2016.  The claimant had two full years’ service at that point and was therefore entitled to 1½ weeks’ gross wages for each year of service in relation to the basic award subject to a maximum of £490 gross per week.

17.	The claimant’s gross earnings were £2,916.67 per month and net earnings were £2,240.91 per month.

18.	The calculation of the basic award is therefore as follows:

			Gross weekly earnings		£490 x 3 - £1,470.

19.	The next issue for us is the level of compensatory award to be given.  The claimant was made two job offers in or around November 2016, both of which involved earnings at a higher level than that with the respondent.  The claimant turned those down on the basis that he wanted to pursue his own business.  It was also the case that Mr Tracey had on an ongoing basis before the termination told the claimant that if he ever needed a job he should come speak to him.  The claimant did not pursue that with Mr Tracey because he wanted to set up his own business.

20.	The schedule of loss provided by the claimant (with very little supporting documentation) shows that the claimant earned “sales commission” in the sum of £3,154 for the period from April to August 2016.  The claimant’s account was that whilst his own statement said that this was sales commission, it was really a loan which he intended to repay.  The claimant was clear in his evidence that those who paid him that commission wanted it to be commission but that it was his choice to ask them for it to be a loan.  Despite this the claimant himself stated in his schedule of loss that it was sales commission.  Given our concerns about the reliability of the claimant’s evidence, we find that this was a payment of commission for that period and it shows us that the claimant had the ability to either obtain a full-time job or work which earned him commission from various sources.  

21.	The claimant confirmed that he set up his company in England in November 2016 and that company is IDMCD Ltd.  The product which the claimant was developing was available to sell in March 2017.  The claimant said that he had been developing his business prior to setting up the company.

22.	The claimant stated that trading started in March 2017 and that his turnover from March 2017 to date is $420,000.  The claimant stated that he has invested in tooling in China in the sum of $24,000 and that his accountant’s advice the week before the tribunal was that he should start to draw a salary from his business from 1 September 2017.

23.	The claimant’s evidence was that in the period after termination he did not apply for or receive benefits, he received loans from friends, and he lived off savings.  

24.	The compensatory loss claimed by the claimant relates to loss of salary, savings expended, mobile phone use, mileage, a loan and the net figure claimed is £22,700 as at 12 August 2016 when the claimant compiled his schedule of loss i.e. approximately six months after the EDT.

25.	We must assess what is just and equitable in relation to any compensation for compensatory award.  We are satisfied that this is a case where a very limited compensatory award should be awarded and have decided that two months’ pay should be awarded from the date of the EDT.  Our primary reasons for so finding are as follows.

(1)	Despite a clear direction in the case management process that the claimant had to produce documentation to support any claim for loss of earnings very little documentation was produced to us.

(2)	We were dissatisfied with the claimant’s reliability generally and we therefore decided not to accept all of his account to us of his financial position.

(3)	It was clear from the evidence that the claimant is someone who is in demand in his industry; he had several offers of a job; he had the capacity to earn commission on a flexible basis from several sources and yet chose not to do so to any greater extent than the £3,154 earned between April and August 2016.

(4)	We had no documentation at all to show any turnover in the claimant’s business for any period but on the claimant’s own account he suddenly had a very large turnover this year.  The claimant’s explanation was that it took some months for him to set up his business which involved trading with China.

26.	The issue for us is the extent to which the respondent should be held to compensate the claimant for loss of earnings.  We have decided on the period of two months from the EDT because the claimant was able to earn commission from April whilst he was setting up his business and we deduce from his evidence that it was his choice not to earn more than that.

27.	The claimant’s schedule of loss produced to the respondent on 12 August 2016 covered approximately six months from the EDT. The claimant claimed expenses/compensation for mileage and mobile phone use. The contract is clear that the phone was a company phone for exclusive company use.  We therefore decline to award any sum for mobile phone usage as this was neither a loss nor an expense incurred as a result of the dismissal.

28.	The claimant’s schedule of loss claimed mileage of £1,800 for the approximate six month period.  We decline to award any sum for mileage as this was neither an expense nor a loss incurred as a result of the dismissal.

29.	The compensatory award is therefore as follows:

(1)	Two months’ net salary at £2,240 =  		£4,480
(2)	Loss of statutory industrial rights			£   400
								______
Total compensatory award				£4,880

30.	As we have found that the claimant was dismissed, that dismissal was in breach of the statutory dismissal procedures and was therefore unfair.  The claimant is therefore entitled to the statutory uplift which is in the measure of 50% in the absence of an explanation from the respondent for their failure to do so. 

31.	As the claimant has stated in evidence that he was not in receipt of benefits there is no recoupment statement.  

Unpaid Wages

32.	The claimant claimed £360 in relation to underpayment of his final salary.  From a perusal of the claimant’s pay slips, his normal gross salary was £2,916.  The claimant’s last pay slip included a payment for holiday pay.  It is clear from that statement that his gross pay was underpaid in the sum of £359.  As this is an award of compensation for underpayment of salary, the claimant is entitled to the equivalent net sum.  The approximate net sum payable after deduction of 20% in relation to tax is £287.  

Summary

33.	The summary of the compensation payable is therefore as follows:

			(1)	Basic award: 					£ 1,470

			(2)	Compensatory award:
Loss of statutory industrial rights			£    400
				Two months’ net pay				£ 4,480
				
				Compensatory award				£ 4,880

				50% uplift on compensatory award		£ 2,440
				Total compensatory award				£ 7,320

				Add basic award					£ 1,470

				Sub-total 						£ 8,790

				Add unpaid wages					£    287

				TOTAL						£9,067

34.	The claimant is therefore awarded the total sum in compensation of £9,067.

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

Employment Judge

Date and place of hearing:  23 August 2017, Belfast.

Date decision recorded in register and issued to parties: