J Hammond v Intumescent Systems Ltd — 2023

The tribunal found that John Hammond was an employee of Intumescent Systems Ltd for the purposes of the unfair dismissal claim, despite the unusual working arrangement under which he also carried on side work through a company. It accepted that he worked under a contract of employment from 5 January 2011 until 31 October 2022, that Mr Ward controlled which leads he received, and that working from home from 2018 did not change the nature of the relationship.

On dismissal, the tribunal held that the respondent, not the claimant, terminated the contract. It relied on Mr Ward's letter of 5 August 2022 stating that it had been decided to stop paying the claimant from the end of October, and on later correspondence confirming that position. The tribunal rejected the respondent's argument that there had been termination by mutual consent and also rejected the suggestion that the case was a redundancy. It held that the claimant did not sign the proposed settlement agreement, so s.203 ERA 1996 did not bar the claim.

The unfair dismissal claim succeeded because the respondent did not show a potentially fair reason under s.98(1)-(2) ERA 1996, and in any event had not acted reasonably under s.98(4). The tribunal said the reason for dismissal was that Mr Ward thought the claimant was doing too well in his side business, which was not a sufficient reason to dismiss, and there was no dismissal process at all. It also held there should be no Polkey reduction, no deduction for contributory fault, and a 20% uplift to the compensatory award for failure to follow the ACAS Code.

The unlawful deductions claim was dismissed. The tribunal found the claimant had been paid his notice period and that, in any event, pay in lieu of notice is not wages. It also held that the £7,206.43 taken from the £10,000 ex gratia payment for the van was not an unlawful deduction because the ex gratia payment was not wages within s.13 ERA 1996. The tribunal recorded that the £10,000 ex gratia payment would be offset against any eventual unfair dismissal award, first against the basic award and then against the compensatory award.