Miss A Arthur v Angela McKee t/a Candy Land — 2019

Miss A Arthur worked for Angela McKee t/a Candy Land from 10 April 2015, became a supervisor and later reverted to a sales assistant role after informing the respondent that she was pregnant, and went on maternity leave in June 2018. The tribunal accepted that on 12 June 2019 HMRC told her that no earnings had been declared for her since November 2018 and that she had been overpaid universal credit by £1,594.93. The respondent did not enter a response or attend the hearing, and the tribunal found the claimant to be a credible witness whose evidence was largely corroborated by documents.

On illegality, the tribunal applied Hall v Woolston Hall Leisure Ltd, Enfield Technical Services v Payne and Patel v Mirza, and held that the claimant could enforce her contract. It found the illegality arose from the respondent's failure to declare the claimant's income, that denying the claim would not significantly advance the public policy against tax evasion, and that the claimant did not know of or participate in the illegality because she plausibly thought her maternity-related payments did not count as income. On constructive dismissal, applying Western Excavating, Malik v BCCI, Bournemouth University Higher Education Corporation v Buckland and Berriman, the tribunal found the respondent had breached the implied term of mutual trust and confidence by not declaring earnings from November 2018 to 12 June 2019, had no reasonable cause for that failure, and had not given a sufficient justification in her message about accountants and HMRC.

The tribunal concluded that the claimant was constructively unfairly dismissed without notice. It awarded a basic award of £525.44 and a compensatory award of £4,884.09, including net loss of earnings to 22 October 2019, future loss, and £500 for loss of statutory rights. Recoupment regulations applied, with a prescribed element of £2,873.49 covering 12 June 2019 to 29 November 2019. The separate unlawful deduction claim succeeded because the claimant was not paid for four hours on 9 June 2019 and four hours on 10 June 2019, which the tribunal calculated at £65.68.