Appeal. EAT/147/05/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal 
On 22 June 2005

Before
THE HONOURABLE MR JUSTICE SILBER
 MS J DRAKE OBE

MR M WORTHINGTON

                                 ELIZABETH CLAIRE CARE MANAGEMENT LTD	APPELLANTS

V

MS J FRANCIS

                                                  	RESPONDENT

Transcript of Proceedings

JUDGMENT

Hearing 9th June 2005

	APPEARANCES

For the Appellants	MR MARTYN WEST,
Senior Advocate,
Peninsula   Business Services Ltd, 
Riverside,
New Bailey Street
Manchester
M3 5JY 	
For the Respondent	THE APPELLANT IN PERSON	

SUMMARY

Employee not paid wages on time and complains - Employers dismiss Employee because of absence from work and because of failure to comply with instruction- Was this the reason for her dismissal or was it because she had asserted "a relevant statutory right"– Answer: the latter. 
Can a complaint about non-payment of wages amount to an assertion of "a relevant statutory right" pursuant to section 104 (1) of Employment Rights Act 1996?  Answer:  Yes.
Did the reasoning of the Employment Tribunal comply with the requirements set out in Meek v City of Birmingham District Council [1987] IRLR 250?  Answer - Yes.
Appeal dismissed.

       THE HONOURABLE MR JUSTICE SILBER:-
        I. Introduction
1.	Ms Jacqueline Francis ("the respondent") was employed by Elizabeth Claire Management Ltd ("the appellant) as a care home manger from 16 June 2003 until she was dismissed on 10 March 2004. The respondent commenced proceedings in the Employment Tribunal claiming that she had been unfairly dismissed even though she could not establish the requisite one-year's qualifying employment. Her claim was based on the contention that she had been dismissed because she was trying to assert "a relevant   statutory right” pursuant to section 104 of the Employment Rights Act 1996 (“the 1996 Act”), and that her relevant statutory right was her right to be paid the  wages due to her. 

2.	Under section 104 of the 1996 Act, an employee, who is dismissed, shall be regarded as unfairly dismissed if the reason or principal reason for her dismissal was that the employee alleged that the employer had infringed "a relevant statutory right" of the employee. Such a claim for unfair dismissal can be brought even though the employee not had been employed for a year and that was the basis of the respondent’s claim.

3.	This claim was upheld by the Employment Tribunal in a decision sent to the parties and entered in the Register on 21 January 2003 in which it held that the respondent had asserted "a relevant statutory" right (namely the right to be paid) and that this was the principal reason for her dismissal.

4.	The appellants now appeal on the basis that the Employment Tribunal erred   on both of these points because the respondent's dismissal was not asserting "a relevant statutory right" but that the reason for her dismissal was her unsuitability for her position as was shown first   by  her absences from work between 3 and 10 March 2004 and second by her failure to carry out an instruction to remove a written warning  issued to another employee. 

II. The Findings and Decision of the Employment Tribunal

 5. The Employment Tribunal found that the respondent was a lone parent of two young children and that if her salary was paid late, this caused difficulties for her in meeting her child care costs. The respondent's salary was payable on the first day of each month but the salary due to the respondent in November 2003 was paid two days late. The appellants accept that this was so but they have explained that payment to the respondent  was late because a payment from the local authority had got caught up in the postal strike.

6. The  Employment Tribunal also found first that the salary due to the respondent in March 2004 was not paid, second that she then made numerous calls to the appellants’ Head Office to ascertain the reason why she had not been paid  and third that the respondent had also received calls from other employees of the appellants, who also had not been paid. The respondent's calls were taken by Mrs. Carol Phillips, Human Resources Officer of the appellants, who told the respondent   that no one was able to deal with her queries. 

7. On 2 March 2004, the respondent made further numerous calls to the Head Office of the appellants and again she was told that there was no one able to answer her  salary queries. On 3 March 2004, the respondent was unable to go to work as she was unable to pay her child care costs and so she telephoned her manager Glenda Bunbury at the home at 7am from a call box leaving a message explaining her position and leaving her own mobile number. The respondent also telephoned the appellants’ premises at about 7am-7.30am and this call was taken by an employee, Bena Hamblin.

8.  On 4 March 2004, the respondent was told by her bank that her salary cheque had been returned but when she again phoned Mrs Phillips at the appellants, she was told that no one was available. The respondent  then  became extremely upset. Later, the respondent received a phone call from  Mrs Headley a director of the appellants, who said that she had not known that staff had not received their salaries and that she would make a cash  payment that day. The respondent was still unsure as to whether she would be paid and she together with another manager faxed, phoned and e-mailed requests to the appellant for an explanation. The respondent told Mrs Headley that she was depressed as a result of the financial difficulties that she had been experiencing because of the late payment of her salary and that she would take a few days off.

      9. On 8 March 2004, the respondent also telephoned her unit at about 7.30-8am and her call was taken by a senior care worker Ms Dayle. Two days later on 10 March 2004 and  after five day's absence, the respondent returned to work where she was met by Mr Headley, a director of the appellants and by Mrs Bunbury her line manager. A meeting then took place at which the respondent was asked where she had been and why she had not been following the requisite procedures concerning her absence. Mrs Bunbury denied receiving her voice message, which the respondent had left. The respondent was not told  at this time that she was being subjected to   disciplinary proceedings.

10.  The appellants then raised the matter of a verbal warning, which the claimant had given to  an assistant manager Fiona Richards three weeks previously on 6 February 2004. The respondent replied by saying first that she had been told to issue the verbal warning and then to  place it on the employee's file and second that by  doing this she was following the instructions of Mrs Bunbury. When the respondent was asked where the warning was, she indicated that it was in her personal drawer, which was part of a filing cabinet, which contained both the respondents' personal drawer and an area in which the personnel file of Mrs Richards was kept. Both the respondent and Mrs Richards had a key.

11.  At this point, the respondent was asked to leave the office and when she was called back 10 minutes later, she was told that she was dismissed. The respondent appealed and she was told that she was dismissed as being  unsuitable for her employment. The reasons that was given b the appellants  for the respondent’s dismissal were first her failure to follow the procedure with regard to reporting absences and second her  failure to follow an instruction. 

12. The respondent appealed against the dismissal   by a letter dated 11 March 2004 in which she repeated that she had been following the instruction of Mrs Bunbury in issuing the warning to Mrs Richards and noting that she had been given documentation supporting that to Carol Phillips on 12th February 2004 asking for clarification but that she had received no response. The Employment Tribunal was referred to a letter to Mrs Headley of 12 February 2004 stating that the warning had been issued as a result of a direction from Mrs Banbury.

13. The appeal of the respondent was heard by Mrs Headley on 2 April 2004 and the hearing took 15 minutes. The respondent was informed by a letter of 7 April 2004 that the decision to dismiss her had been  upheld on appeal.

14. During the hearing in front of the Employment Tribunal, Mrs Hedley explained that she had not realised that the respondent had not been paid in March 2004 until the respondent had told her and that at that point she made an immediate cash deposit into the respondent's account on 4 March 2004. It was also the evidence of Mrs Headley that the respondent had failed to inform her line manager that she was not coming in to work when she was away in early March 2004. It was said that the respondent had not spoken directly to Mrs Burbury but that she had left a message on the main phone in the home and not directly on Mrs Bunbury's home. Thus, Mrs Bunbury said that she had not known of the respondent's problems with child care at the time, and in particular that they arose because of the failure of the appellants to pay the respondent as this meant that the respondent was unable to go to work.

15.  The Employment Tribunal recorded in its Reasons that Mrs Headley admitted that she knew that the respondent was upset about not being paid on  4 March 2004 as result of Mrs Headley's conversation with the respondent. The Tribunal concluded that they were sure that the respondent would have made it clear then that the reason why she was not at work was because she had no money for childcare. The evidence of Mrs Bunbury was that she had been told by the respondent who had phoned her on the 4  March 2004 mainly to say she was not attending for work.

16 . The Employment Tribunal said that Mrs Bunbury's evidence made it clear that there had been a misunderstanding over the issuing of the warning to Fiona Richards but that she had told the respondent to remove it. The Employment Tribunal explained that it was not clear whether the respondent had removed it from Mrs Richard's personnel file to the respondent's personnel file in the same cabinet or whether she had simply left it in Mrs Richards personnel file as she had alleged.

17. The Employment Tribunal first considered whether the reasons given by the appellants for the respondent's dismissal were supported by the evidence and they concluded that they were not. The Tribunal also decided that the respondent had complied with the requirement of the disciplinary rules and procedures under which she was obliged to notify a duty member of staff two hours before the start of a shift that she was unable to work, as it had found first that the respondent had phoned the home at 7 o'clock on 3 March 2004, and that she had left a message for Mrs Bunbury, second that she had phoned again at 7-7.30 am when she spoke to Ms Hamblin and third that on 4 March 2004, when the cheque was returned, the respondent  had spoken to both Carol Phillips and Mrs Headley. The Employment Tribunal therefore found that they all knew of the reason for the respondent's absence. Thus the Employment Tribunal rejected the appellants’ evidence that   a failure to follow procedures was a reason for the respondent's dismissal. 

18. On the question of the warning given to Mrs Richards and the respondent's alleged failure to carry out a reasonable instruction, the Tribunal found that Mrs Banbury accepted that there was a misunderstanding over the issue of the warning as although the respondent had been told to remove it, it was unclear whether she removed it as she contended as the matter had not been investigated. In any event, nothing was done by the appellants   by way of disciplinary action against the respondent from the date of the warning on 6 February 2004 until 10 March 2004 when the respondent had been absent from work because she had not been paid and because  she could not afford child care.

19. The Employment Tribunal then turned to consider whether the appellant was dismissed because of an assertion of “a relevant statutory right” which is, as we have explained, pre-condition  to bring a claim for unfair dismissal for somebody like the respondent  who had not been employed for 12 months.
 
20. The Employment Tribunal had referred to section 104 of the 1996 Act and  later concluded that:-
"17. We have considered whether the claimant has satisfied us that the reason for her dismissal was her assertion of a statutory right. Her evidence that she made numerous phone calls to Carol Phillips on 1,2 and 4 March about the non-payment of her salary has not been disputed. Similarly that she and another manager had telephoned, faxed and emailed requests for explanations. We find that she made it clear to the respondents what the right she alleged to have been infringed was. We also find that the assertion was the principle reason for her dismissal
18. We conclude that she was unfairly dismissed for asserting her statutory right to be paid her wages…” 

III. The Grounds of Appeal

    21. Mr Martyn West on behalf of the appellants contends that the appeal should be allowed and that either the a finding should be substituted that the respondent was not dismissed by reason of an assertion of a statutory right and that her application be dismissed or that the matter be remitted for a hearing before a new tribunal. He puts forward either orally or in the written skeleton argument six  reasons in support of that contention 

22. First, Mr. West submits that the Employment Tribunal was wrong to conclude that that the dismissal was due to her assertion of her “relevant statutory right” as there is no “relevant statutory right” to be paid on time. He contends that late payment may be a breach of contract and actionable as such but that it is not a “relevant statutory right” and so the respondent cannot bring a claim for unfair dismissal.

23. This submission requires consideration of the relevant statutory provisions, which are to be found in   section 104 of the 1996 Act and they provide that: -

“ (1) An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee-
(a) brought proceedings against the employer to enforce a right of his which is a relevant statutory right, or
(b) alleged that the employer had infringed a right of his which is a relevant statutory right.

              (2) It is immaterial for the purposes of subsection (1)- 
     (a) whether or not the employee has the right, or
     (b) whether or not the right has been infringed; but for that subsection to apply, the claim    to the right and that it has been infringed must be made in good faith.

(3) It is sufficient for subsection (1) to apply to the employee, without specifying the right, made it reasonably clear to the employer what the right claimed to have been infringed was”
.
 
24. The definition of "a relevant statutory right" is contained in section 104 (4) of the 1996 Act, which provides, in so as far as is relevant to this appeal, that: -
 
“ The following are relevant statutory rights for the purpose of this section-
(a) any right conferred by this Act for which the remedy for its infringement by way of a complaint or reference to an [Employment Tribunal])..”
. 

25. One   right of an employee is not to have "deductions" made from his or her wages because, as will now explain, the remedy for the infringement of such a right is by way of a complaint   to the Employment Tribunal. Section 13 (1) of the 1996 Act provides, save in circumstances which are not relevant to the present case, that: -
"An employer shall not make a deduction   from wages of a worker employed by him".
   
26. Section 23(1) of the 1996 Act provides that: - 
"A worker may present a complaint to an employment tribunal-

(a) that his employer has made a deduction from his wages in contravention of section 13…"          . 

27.  In this case, the complaint of the respondent was not that she had been paid less than she should have been by her employers but that she was not paid at all between March 1 2004 and 4 March 2004. So the critical issue, which has now to be determined, is whether the failure by the appellants on and after March 1 2004 to pay any of the respondent's salary constituted   a "deduction from wages" under section 13(1) of the 1996 Act. It would be strange if an employee could claim that there had been a “a deduction from wages” pursuant to section 13(1) of the 1996 Act and that this had infringed “ a relevant statutory right “ when he was paid all but £1 of his wages but that he could not make such a claim if he was not paid any of his wages.

28. Not surprisingly, the Employment Tribunal found that the failure by the appellants on and after March 1 2004 to pay any of the respondent's salary constituted   a "deduction from wages" under section 13(1) of the 1996 Act  .We consider this approach to be correct because the term “a deduction from wages” in section 13(1) of the 1996 Act has a wide meaning as section 13(3) of the 1996 Act 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 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"

29.  The Court of Appeal has held that non-payment of all the wages due to an employee constitutes a "deduction from wages" in Delaney v Staples [1991] ICR 331 when it decided that a failure by an employer to pay holiday pay and commission was regarded as a deduction under a provision similar in all material respects to section 13(3) of the 1996 Act. In a judgment with which the other members of the Court of Appeal agreed, Nicholls LJ said that this provision  "makes plain that, leaving aside errors of computation, any shortfall in payment of wages properly payable is to be treated as a deduction” (page 339 H -340A). Although Delaney’s case was subsequently considered by the House of Lords ([1992] 1 AC 687)], this point was not the subject of that appeal. After we had reached our conclusion on this issue, we came across the decision of this Appeal Tribunal in Bruce v Wiggins Teape [1994] IRLR 536 in which Mummery J (as he then was) explained  in paragraph 13 that “the position is that any shortfall in the payment of the amount of  wages properly payable to the  worker is to be treated as a deduction” 

30. Thus we reject the submission of Mr. West that although non- payment   of wages may be a breach of contract and actionable as such, that right is not a  “ relevant statutory right” and so the respondent could not bring a claim for unfair dismissal. The true position is that where an employee is not paid any of  his or her salary on time, this failing by the employer constitutes a breach of “a relevant statutory right” of that employee.

31. Mr West’s second   submission is that nowhere in the Employment Tribunal's decision is there any indication of the right, which the respondent alleged that the appellants had infringed. We cannot accept that submission because the Employment Tribunal explains in paragraph 3 of its Reasons that the respondent: -
“claims that the reason for the dismissal was that she had raised issues regarding late or non-payment of her salary, i.e. assertion of a statutory right within the meaning of 104 (sic) of the Employment Rights Act 1996”

32. This claim of the respondent was upheld because, as we have explained, the Employment Tribunal stated of the respondent that: - 
“18. We conclude that she was unfairly dismissed for asserting her statutory right to be paid her wages” 

.
33. Mr. West’s third submission is that there is no reference in the Tribunal's reasons to the words used by the respondent. We are unable to understand why it was necessary  for the Employment Tribunal to refer to the words used by the respondent. As we have explained , section 104 (3) of the 1996 Act makes it clear that all the employee has to do in order to  allege that his employer has infringed his right was to make “it reasonably clear to the employer what the right alleged to have been infringed was”   What is important was for the Employment Tribunal to set out the gist of the words used by the respondent and as we have explained that is precisely what the Employment Tribunal did  when it  explained that there was ample evidence that the respondent was complaining to the appellants between 1 March 2004 and 4 March that she had not been paid. 

34. The fourth submission of Mr. West was that the assertions made by the respondent do not amount to assertions of a “relevant statutory right”. He points out in his written skeleton argument that as Mummery LJ explained in Mennell v Newall & Wright [1997] IRLR 519 at paragraph 29 the fact that an employee has raised some form of complaint is not sufficient to found a claim under the predecessor of section 104 of the 1996 Act. Mr. West also reminded us in his written skeleton argument that Bell J   giving the judgment of this Appeal Tribunal said in Jones v Cutting Edge Services (Employment Appeal Tribunal 204/97) that a mere dispute was not sufficient as there had to be an assertion that a “relevant statutory right” had been infringed.

35. In this case as, we have explained in paragraph 20 above, the Employment Tribunal found that the respondent had asserted her statutory right to be paid her wages in numerous phone calls between 1 March 2004 and 4 March 2004. So the position is that by complaining that she had not been paid, the respondent was asserting “ a relevant statutory right”,  which was not to have deductions made from her pay when the appellants failed to pay her from 1 March 2004 until 4 March 2004. So we reject this submission of Mr. West

36. Fifth, Mr. Ward submits that that no proceedings were issued by the respondent prior to her dismissal nor was there any threat by her to issue proceedings. He also points out that the Employment Tribunal did not refer to proceedings. There is no merit in these submissions as section 104 (1) of the 1996 Act does not require that the party asserting "a relevant statutory right" should have issued proceedings. Indeed an allegation of infringement of a relevant statutory right will enable an employee to invoke section 104 (1) of the 1996 Act as section 104 (1) (b), to which we have already referred makes clear.

37.That is what happened in this case as there was ample evidence that the respondent was complaining between 1 March 2004 and 4 March 2004 that she had not been paid and this claim was obviously made in good faith as the respondent had not been paid. So the position is that by complaining that she had not been paid, the respondent was asserting “ a relevant statutory right” which was not to have deductions made from her pay when the appellants failed to pay her from 1 March 2004 until 4 March 2004. 

38.Finally, it was also contended by the appellants that the Employment Tribunal did not give sufficient detail in their reasons to satisfy the Meek requirements, by which they meant the principle enunciated In Meek v City of Birmingham District Council [1987] IRLR 250 in which Bingham LJ (as he then was) said in a judgment with which other members of the Court of Appeal agreed that: -
"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basis factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises; and it is highly desirable that the decision of an Industrial Tribunal should give guidance both to employers and trade unions as to practices which should not be adopted"[8]

39. In this case, as we have explained, there was, as we explained in paragraphs 5 to16 above, ample material in the reasons adduced by the Employment Tribunal, which complied  with Bingham LJ's requirements for the Employment Tribunal to give   " an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions". Furthermore, as appears from paragraphs 17 to 20 above, the Employment Tribunal also satisfied the other requirement of Bingham LJ to provide "a statement of the reasons which have led them to reach the conclusion which they do on those basic facts".

40.. In other words, there can be no doubt in the mind of any party reading the Employment Tribunal’s decision as to why the Respondent was successful in the Employment Tribunal and why the appellants were unsuccessful. We therefore reject this complaint of the appellants.
     
IV Conclusion 

41. This case shows that if the reason or, if more than one, the principal reason for an employee’s dismissal is that he has alleged in good faith that his employer has delayed paying his wages, then the he shall be regarded as having been unfairly dismissed and this will be the position even if he was not employed fro the qualifying period of one year’s qualifying employment.  For the reasons, which we have sought to explain, this appeal is dismissed. 

42. The respondent has applied for an order that the appellants should compensate fro the work that she lost because she had to attend the hearing of her appeal. Although we have great sympathy for the respondent, we are unable to accede to this application because we do not consider that the proceedings brought by the appellants were, in the words of Rule 34 A of the Employment   Appeal Tribunal Rules 2003 as amended, “unnecessary, improper, vexatious or misconceived or that there has been unreasonable delay or other unreasonable conduct in the bringing or conducting of proceedings” by them so as to justify a costs order in favour of the respondent. In our view, the conduct of the appellants cannot be stigmatised in that way as they had reasonable arguments to support their stance even though ultimately, we did not accept it.

43. So the order that we make is that this   appeal must be dismissed with no order as to costs