Breach of contract costs employer £17,000
15 August 2018
An employee who handed in his notice after refusing to accept reduced hours and a reduction in pay, has won his complaint of unfair constructive dismissal and been compensated to the tune of almost £17k.
In the case of Mr C Decker v Extra Personnel Logistics Limited the claimant, whose employment began on 1 December 2008 and ended on 6 July 2017 by reason of his resignation, was employed by the respondent as a Branch Manager. The claimant's role, involved him in the everyday operations of the business, which included the recruitment of LGV/HGV drivers, responsibility for all administration, payroll operations and development of drivers ensuring their full compliance regarding driver hours, tachograph rules and legislation.
The contract of employment he entered into on 23 December 2008 provided that there was a 40 hour week and that employees were expected to work flexibly between the hours of 7.00 a.m. and 7.00 p.m. However in or around July 2015 an agreement was reached that his working hours would be reduced from 40 hours per week over five days to 32 hours per week over four days.
On 20 February 2017 the claimant was and asked if he would reduce his working days from four days to two days, which equated to a reduction in hours from 32 to 16 and a loss of income of £205.95 per week. After reviewing his current situation and financial commitments Mr Decker was unable to afford any reduction in his current hours but said he would be willing to accept the reduction from 32 hours to 24 hours if his day rate was increased from £102.97 to £110.00.
No agreement was reached between the parties and after several further email exchanges Mr Decker said that due to the forced reduction of his hours and future loss of earnings he had been put in the unfortunate position of having to leave. His employment was subsequently terminated on 5 July 2017 on completion of his notice period.
Mr Decker brought a complaint of unfair constructive dismissal within the meaning of section 95(1)(c) of the Employment Rights Act 1996 ("ERA 1996) and also pleaded that the respondent had unreasonably failed to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures.
The Tribunal concluded that the essential elements of an unfair constructive dismissal had been made out by the claimant which required the respondent to show a fair reason for dismissal and that it acted reasonably in treating it as a sufficient reason for dismissing the claimant.
In this case no fair reason had been pleaded and whilst it was suggested that there were business reasons for the dismissal due to the loss of two contracts and a business downturn to bring it under the potentially fair ground of some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held, the Tribunal considered in that a saving of £102.00 per week from the claimant’s pay was not realistically going to have any bearing on the company’s future viability.
The Tribunal further concluded that the respondent had failed to show that it had a fair reason to dismiss the claimant.
Compensation
Turning to the calculation of the claimant’s remedy of monetary compensation, which is made up ordinarily of a basic award and a compensatory award it was agreed between the parties in regard to the former that he was entitled to a basic award of £4,942.92, based on 8 complete years’ continuous employment, all of which was worked whilst the claimant was 41 or older, giving a multiplier of 12 of his gross weekly pay of £411.91.
Dealing next with his compensatory award his immediate loss fell to be calculated between the date of his dismissal on 5 July 2017 to the date of hearing, which comprised a period of 30 weeks. Based on a net weekly salary of £329.51 it was agreed that his immediate loss was £9885.30. It was further agreed that the sum of £350.00 was an appropriate sum for the loss of his employment protection rights, which took his immediate loss figure to £10,235.30. This figure was then reduced by the sum of £3614.10 (£120.47 x 30), which had been earned by the claimant over this period as a part-time coach driver taking it to £6621.20.
In regard to the claimant’s future loss 30 weeks net pay less earnings were sought in the schedule of loss. However, the Tribunal reduced the future loss period to 20 weeks on the basis that the claimant, notwithstanding his age, had a number of strings to his bow in terms of his employability which it considered would enable him to find work of a more commensurate value to that he had lost over this period. This gave a future loss figure of £6590.20 (£329.51 x 20) from which was deducted 20 weeks’ earnings from his part-time driving work in the sum of £2409.40, which took the figure to £4180.80.
Combined the claimant’s compensatory award totalled £10,802.00. This figure was then uplifted by 10% in the sum of £1080.20, which the Tribunal considered just and equitable, for the respondent’s failure to comply with the ACAS Code of Practice, taking the figure to £11,882.20.
Extra Personnel Logistics Limited was ordered to pay Mr Decker the total sum of £16,852.12 in satisfaction of his basic and compensatory awards.