Mr K Hayter v Dearden Motorcycles Ltd — 2020

Mr Hayter presented a claim on 30 August 2019 for £10,000 said to be an unpaid bonus from 2009/2010 and £20,000 said to be holiday pay for 2010 to 2018. He did not pursue a breach of contract amendment when that possibility was raised at the hearing. The tribunal accepted that he had worked for Dearden Motorcycles Ltd since 1 December 2007, that his salary had been £40,000 until 2009 and £43,333 from 2010, and that a 28 February 2010 email suggested a one-off bonus of £10,750 and payment for untaken holiday.

The tribunal found that the bonus was never paid, but it also found that on 23 December 2018 Mr A Hewitt wrote confirming that the company would pay £10,000 for the bonus and £20,000 for holiday pay via dividend payments. The judge found that this was a voluntary agreement reached after discussions between the parties, that it took account of the bike issue referred to in the correspondence, and that no part of the £30,000 had been paid in 2019. The tribunal further found that the 23 December 2018 agreement was a compromise and that the sums were payable to Mr Hayter in his capacity as a shareholder rather than as a worker.

Both claims were dismissed. The tribunal held that the £30,000 was not recoverable under section 23 ERA 1996 because section 27 excludes payments made otherwise than in the worker's capacity as a worker, and the agreed method of payment by dividend placed the sums outside the wages regime. As to holiday pay, the tribunal held that the claim before it was not properly a Working Time Regulations claim but a claim on the compromise agreement, and that if the compromise were ignored the bonus claim would be out of time and the holiday-pay claim could not succeed on the basis advanced. The judge noted that the dismissal did not prevent a possible breach of contract claim in another forum, but no such claim was before the tribunal.