1406318-2019 teagann v aurea search jment and reasons - …

Case Number: 1406318/2019

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EMPLOYMENT TRIBUNALS

Claimant: Miss C Teagann Respondent: Aurea Search Limited Heard at: London South (by CVP) On: 22nd January 2021 Before: EMPLOYMENT JUDGE BECKETT (sitting alone) Appearances For the Claimant: In person For the Respondent: Mr Liberadzki (counsel)

RESERVED JUDGMENT

1. The Claim for unauthorised deductions from wages was, in part, well

founded.

2. The Claim in respect of pension contributions was withdrawn prior to the hearing. That claim is dismissed.

3. The Claim in respect of the bonus payment was withdrawn during the hearing. That claim is dismissed.

REASONS

Issues to be determined 4. By a claim presented to the Employment Tribunals on 18 December 2019,

the Claimant claimed unauthorised deductions from wages, pension contributions and a bonus payment.


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5. The key issues for the Tribunal to determine are: 6. Was the Claimant a worker at the relevant times?

7. Is the claim in respect of wages?

8. Has the Respondent made a deduction, and if so, was the deduction

authorised?

Unauthorised deductions from wages

9. The Claimant argued that she was entitled to her full months’ salary, namely

£1,541, for the months of December 2019, January 2020 and February 2020.

10. The Respondent denied that the Claimant was entitled to a full salary in December 2019 as she had only worked two days that month, and that she was not entitled to any wages for January or February 2020 as she was no longer employed by the Respondent at that time.

The Hearing

11. The Claimant gave sworn evidence and called sworn evidence from her

mother, Jacqueline Teagann (JT).

12. The Claimant had also arranged the attendance of a further witness, Chloe Evans, via CVP. However, after considering her witness statement, it was accepted that her evidence did not assist in determining the relevant issue for the Tribunal and she was therefore not called.

13. Anika Bakrania (AB) gave sworn evidence for the Respondent. 14. I considered the documents from an agreed Bundle of Documents of 166

pages which the parties had introduced into evidence, with the addition of one page provided by the Respondent, which was a letter from her accountant.

Findings of facts

15. Based on the evidence heard and the submissions made, I found the

following facts. 16. The Claimant was offered the position of Head of People at Aurea Search

on 10 January 2019 (pages 67 to 69 of the Bundle). She worked for the Respondent from 29 January 2019. Her working hours and salary were set out in a letter dated 29th January 2019. Within that letter, the Claimant is entitled to “unlimited” annual leave. The initial salary was £20,000 although


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this was later increased. As at November 2019 the Claimant’s take home pay was £1,541 per calendar month.

17. The Respondent is a start-up company specialising in technology

recruitment. The Claimant was the company’s only employee. At the time of recruitment, the parties were close friends.

18. From the outset, the Claimant was also working two days per week

(Wednesday and Saturday nights) at a nightclub doing promotion work. The Respondent was aware of her other job, and adjusted the Claimant’s working hours so that she started one hour later than usual on a Thursday morning.

19. As part of her evening work, the Claimant was active on social media.

However, she was also active on social media with a view to promotions, for which she was not paid.

20. The entitlement to unlimited annual leave was confirmed in an email from

the Respondent to the Claimant on 4 October 2019 at 12.43 (page 90 of the Bundle), which referred to “annual leave: as per contracts” but added that a week’s notice was required for one day’s leave, two weeks’ notice for any longer period.

21. The friendship and working relationship started to decline after some 5

months or so, when the Respondent did not pay the Claimant’s wages on time. The wage payments from July 2019 were made late, and the Respondent gave various reasons for the delays, relating to banking issues. The Claimant repeatedly asked for her wages.

22. The Claimant sent a copy of a message informing her that she only had

£6.30 available to her in her bank account to the Respondent at the end of July. She added a message indicating that she was in difficulty. The Respondent replied, “sorry queen I meant it will be paid today on the 31st, will be with you by 12”.

23. The payment ought to have been made on Friday 26 July 2019, as per the

contract. 24. In addition to the July payment being late, the August wages had not been

paid by 9 September 2019 and the Claimant had to request payment by text (page 82).

25. The Claimant sent a text message to the Respondent on 6 September 2019

asking for her wages to be paid as she needed to pay back her mother and sister, both of whom had loaned her money (page 81). She chased the Respondent with further messages on 9 September. On both dates the Respondent stated that she had transferred money.

26. The Respondent sent a message to the Claimant on 10 December 2019

stating that she would draw up a proposal for a part time role the following day. She added that she was going to go “back the W tomorrow” and would


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be there for 10am but was happy if the Claimant wanted to work from home. This contradicts her assertion that the Claimant did not need to travel and could work from home every day by December 2019. There was clearly a work place at that time where the Claimant could attend.

27. A further message stated that she would “sort it” that day and apologised

that the Claimant had had to wait so long. This is referring to the November wages.

28. In addition, the Claimant’s mother, Jacqueline Teagann (JT), sent a text on

12th July 2019 regarding the lack of payment and the delays (page 74). She gave evidence that during the latter part of the year, she had had to support her daughter financially and did not believe the “appalling” excuses that the Respondent gave for late payments.

29. JT sent a further message on 7th December 2019 (page 95). The

Respondent replied, apologising that the Claimant’s mother was out of pocket, and stating that she would sort out the wages that day.

30. However, by 16 December 2019 the Claimant had still not been paid and her

mother sent a further message. 31. The Respondent accepted that the wage payments were “slightly late on a

few occasions” (paragraph 11 witness statement of AB). In evidence she explained that she was using a company she had not used before, Transferwise, and that payments being late happened with startup companies. She added that every month her priority was to pay the Claimant, it was sometimes late but was always paid.

32. I find that the late payments of wages caused the Claimant significant

concern and financial issues, as she had to rely on her mother to make payments. The excuses made by the Respondent do not ring true; she said that paying the Claimant’s wage was her priority, but later stated that she would have used her own savings to pay. She did not use her savings to pay the wages on time, despite knowing the impact it was having on the Claimant.

33. In November 2019 the Respondent spent £4,617.22 on a trip to Las Vegas

for herself, the Claimant and four others (page 87). The trip took place between 14 and 18 November 2019.

34. In evidence the Claimant confirmed that she had last undertaken work for

the Respondent in December 2019. She had not been paid her November salary and said that she was “working for free”. She stated that she thought that she had worked more than the two days the Respondent had recorded her as working.

35. There was a meeting in December about the Claimant reducing her working

days from five to three per week. Whilst that was agreed, there was never a discussion or agreement as to her new salary.


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36. The Respondent’s evidence was that in December 2019 the working

relationship between the parties had completely broken down and that there were issues on “both sides”. She suggested a part time contract at the meeting on 10th December to help the Claimant, stating that it was not beneficial for her business at all. She accepted that she had not paid the Claimant her November wages in full at that time.

37. The Respondent sent an email on 11 December 2019 entitled “Change to

Contract @ Aurea Search”, which set out a new contract to take place immediately. The working days were set out as Tuesday, Wednesday and Thursday, hours 9am to 5pm and place of work as “our co-working space as to be confirmed for the 1st of Jan” (page 103).

38. The Respondent added that in keeping with the reduction of working hours

the “compensation package” would need to be altered, which would be “discussed and implemented immediately”. She added that she was really pleased that they had found a solution that would be beneficial of “us both”. This is contrary to the evidence the Respondent gave at the Tribunal, as outlined above.

39. On 16 December 2019 the Respondent sent a message to the Claimant,

saying that she was “so annoyed” that the Claimant had only worked 2 days that month that she did not prioritise paying her November wages. She said that the payment should have cleared in her account by then. The Respondent also said that the Claimant could not take any more days as holiday as it was “crazy” and that any holiday would have to be unpaid.

40. The Claimant replied, stating: “regardless of what has happened this month,

I still need my November pay. It’s unacceptable to have an employee to wait this long especially as it’s Christmas next week. I’m super annoyed as it’s the same thing every single month. Until this is sorted then we can discuss the way forward” (page 108). She sent a further message on 18 December asking for a reply.

41. On 18 December 2019 the Respondent replied saying that she had tried to

telephone yesterday and she had not heard back. She added “I’m not responding to crazy emails asking for a bonus it’s madness”.

42. The parties also exchanged messages on 18 December 2019. The

Respondent said that the Claimant had sent a few emails and Whats App messages and said that it was “pretty poor communication especially as [she hadn’t] done any work this month either”. The Claimant responded that she had messaged the Respondent every day and that she was going to contact her bank.

43. The messages became personal and the Claimant again requested that she

be paid her November wages by the Friday. The Respondent asked her to check her bank as she said she had paid the wages. However, on 19 December 2019 the Respondent sent a further message saying she had


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paid £500 from her personal account and would send 2 further payments of £500 on the following two days, as that was her daily cap.

44. The Claimant sent messages to the Respondent on 19, 20 and 21 December

2019 chasing payments and arranging to speak (pages 111 to 117 of the Bundle).

45. On 21 December she told the Respondent that she had not had the other

two payments and that it had gone too far and was “out of her hands”. At that stage she sent a screenshot showing a nil balance in one account and £1 in a help to buy ISA account.

46. The Respondent continued to claim that she had sent the payments and

would chase her bank and messages continued to 24 December 2019. On that date the Claimant’s mother sent another message to the Respondent.

47. In the claim form, the Claimant stated that she still worked for the

Respondent. She stated that her wages were generally paid between one and three weeks late, and that she had not received her November salary. The Claimant went on to state that she was due her November and December wages, and her bonus as per her contract. I note that at that date, 18 December 2019, the Claimant was not yet entitled to her December wages. Wages were due to be paid on the last Friday of each month.

48. The Claimant acknowledged in her claim form that the Respondent had told

her that she had not worked in December, but she stated that she had not been able to afford to travel into London to work and “no one should work for free”. She added that the stress was making her ill.

49. On 2 January 2020 the Claimant contacted the Respondent by text saying

that she had not contacted her as she was “so angry and annoyed” and that she still was. She asked when she would be receiving the rest of her November wages and said that she was two months behind on her bills. The Respondent replied saying that she needed to meet and discuss “what to do about the December pay and obvs discuss moving forward” (page 120 of the Bundle).

50. The Respondent did not mention in those text messages that the Claimant

was no longer working for her. I find that the Claimant was still employed by the Respondent at this time.

51. On 3 January 2020 the Respondent’s accountant emailed the Respondent.

In that email the accountant, Fahad, asked the Respondent to “email Imran regarding the hours Karina will be working from January 2020”.

52. The Claimant and Respondent both agreed that they met to discuss work on

6 January in London. However, their accounts as to the content of that meeting is entirely different. The Claimant stated that they discussed her wages, and she told the Respondent that she was going on holiday for 11 days, between 12 and 23 January 2020. The Respondent told her to go and


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have a good time. She did not make a formal application, and she did not give the requisite two weeks’ notice.

53. The Claimant was adamant that there was no discussion about ending her

employment, and she had never agreed to any such termination. 54. The Respondent’s evidence as to the meeting was that they agreed to part

ways on that date. She stated that they had discussed a final payment for December. In evidence she said that they had not discussed company property, but when referred to her witness statement, she said that they had “touched upon” that issue.

55. The Respondent said that she did not feel the need to say the meeting was

an exit interview, as the meeting was to “tie up loose ends”, to clear the air and agree a final payment. She did not authorise any leave, and was not asked to do so, as the Claimant no longer worked for her.

56. After the meeting on 6 January 2020 the Claimant sent the Respondent a

message saying that it was lovely to see her earlier and she was glad that they were “ok”. She added: “so regarding wages I know your still running a business and things are a bit difficult atm but I am still employed and by law should have it in full but if you could just pay me the rest of November and then £900 for December that will help me pay my mum back for my bills”.

57. The Respondent said that she would text her the following day and that it

had been lovely to see the Claimant (page 121). 58. Neither party mentioned any parting of ways in their messages.

59. I find that the meeting on 6 January 2020 was not a meeting relating to the

end of the Claimant’s employment. The contemporaneous text messages are particularly persuasive as neither party mentioned the termination in any way. an exit interview. The Claimant’s evidence was also persuasive and she appeared genuinely shocked by some of the Respondent’s evidence on this point. The Respondent did not set out in writing a termination of the contract. The Respondent might well have planned to end the working relationship on that date, however I find, based on the evidence given and the documents in the bundle, that she did not in fact do so.

60. The Claimant again asked for the outstanding money in a message on 8

January 2020. The Respondent had stated that she was going to get a payslip drawn up and was waiting for that. She asked for screenshots of the payments received in November 2019 so she could get the “final payment” sent over that week. That final payment, I find, was a reference to the final part of the November wages which were owed (page 123). I do not accept that it related to a discussion as to the last wage packet. At no time is there any reference in writing during January that the employment had ended. All discussions relate to the late payment of wages.


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61. On 9 January 2020 the Respondent removed the Claimant’s access to her work emails and therefore the Claimant said that she could no longer work. She said in evidence that she had not been dismissed and would have done work as she was “still employed and that was [her] job”. She said that she had asked the Respondent to reinstate her email account, and asked her “why she had cut [her] off”.

62. She had by then made her claim to the Tribunal and therefore did not contact

the Respondent further. In evidence she stated that “no one should work for free”.

63. On the 10 January 2020 the Claimant wrote to the Employment Appeal

Tribunal (page 22). She stated that she wanted to amend her claim, and described the meeting that had taken place on Monday 6 January. Within the letter the Claimant stated that she had told the Respondent that she was still employed by her and had a contract, which was attached to the letter.

64. Importantly, the Claimant stated that the Respondent had changed the

password to her business email account so she now believed that the Respondent wanted to “terminate” her rather than paying what was owed.

65. On 13 January 2020 the Respondent emailed her accountant saying that

she needed a final payslip for the Claimant, as she was “no longer with Aurea Search” (page 128). She asked for the payslip for December to be £900 minus £77.94 for phone insurance.

66. In the Respondent’s ET3, dated 4 February 2020 (delayed due to the

Claimant initially claiming against the Respondent personally and not the company), the Respondent gave an end date of the employment as 24 December 2019.

67. In the ET3 the Respondent stated that the Claimant had moved to a part

time role from 10 December as she “was clearly overwhelmed with working three jobs and needed a break”. The Respondent also stated that the Claimant was working as a nightclub dancer “multiple nights a week”. The evidence before the Tribunal was that the Claimant had two jobs, as outlined above, and that the nightclub work was once during the week and one night at the weekend.

68. The Respondent stated that the Claimant’s performance was “struggling”

and she had had official warnings after not turning up for work and missing deadlines. The Respondent added that she did not terminate the Claimant’s contract as she wanted to give her the benefit of the doubt. The Respondent also stated that from 10 December 2019 to January 2020 she had not seen the Claimant and the Claimant had not resigned.

69. There was no evidence before the Tribunal of any official warnings being

given to the Claimant. The Respondent later stated that the Claimant had been a good assistant and had been rewarded for her hard work with a pay


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increase of £5,000 in July 2019 and “numerous dinners/ drinks/ extended leave” (page 29).

70. The Respondent stated that the Claimant “ultimately made the decision to

leave the business to explore her dancing/ Instagram job further” (page 30). 71. The Respondent referred to the meeting on 6 January 2020 as a final exit

interview, stating that they had left on good terms. The Respondent added that a meeting was arranged for 29th January 2020 “to return items and to make any relevant/ agreed payments which did not include the “bonus” included in this Tribunal claim” (page 30). However, the Respondent had not attended or contacted her, and no such meeting had taken place. The Respondent further stated that as at 4 February, the Claimant was still using the Respondent’s company name, claiming that she still worked for the Respondent.

72. I find that the Claimant was still employed by the Respondent in February

2020. This is evident from all the documentation that was provided at the relevant time. She had not resigned, nor had she been dismissed. I find that this belief was reasonable in the circumstances of this case. However, she had not undertaken any work for the Respondent during January or February 2020.

73. The Claimant initially made a claim in respect of a bonus payment which she

argued was due to her. In her contract, the Claimant would be entitled to a “bonus package” of 5% of the company’s gross profit per quarter, payable four times a year in arrears (page 69 of the Bundle).

74. She thought that the company was making a profit, as she saw the bills and

invoices and knew that the company had money for a planned trip to Lapland. She said that the company had a board with all the deals on, and she did not know the company was in any difficulty. Text messages sent between the parties (at page 113 of the Bundle) referred to closing a candidate John, and the Respondent replied “£56,000 of pipeline!!!!”. Again, this supported the Claimant’s view that the Respondent was in profit.

75. Whilst I accept that she might well have thought at times the company was

doing well, in light of the trips (taken and planned) abroad and new businesses coming onboard, she was also aware of bills being paid late, including of course her wages. She said that the Respondent told her that she was transferring funds between banks, and had issues with her bank, rather than money issues. I find that she had been told this.

76. I do not accept the Respondent’s submission that the claim in respect of a

bonus was “disingenuous from the start”. I find that the claim was more hopeful and based on the term set out in the letter and the comment made by the Respondent that the Claimant would be getting a good bonus. I find that the comment, which the Respondent stated she had not made to her knowledge, was made but probably in a general context as to the future rather than the first year. The Claimant did not know the details of the


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Respondent’s bank balance, and evidence as to the profit and loss from the accountant was only provided just before the Tribunal hearing.

77. The Claimant did not accept in evidence that by the 14 February 2020, when

she received the letter stating her employment had ended in December, she knew that she was no longer working for the Respondent. She said that she had never resigned and that the Respondent had never told her that she was dismissed or why she had been dismissed.

78. The Respondent said that she did not send a letter after the meeting on 6

January as she did not want to submit a “hardcore” termination letter. She said that the decision was mutual and amicable and did not want to “add fuel to the fire”. However, once she received the letters from the Tribunal and was aware that the Claimant had made a claim in December, she “thought it was best” if she sent an official letter.

79. In respect of that letter, which is at page 173 of the Bundle, it was attached

to an email sent when the Respondent became aware of the Tribunal claim. It opens with “this letter confirms the end of your employment with Aurea Search as of the 31st of December as discussed and mutually agreed on the 6th of January”.

80. The letter continued stating that “we both agreed terminating your

employment contract is the best decision following numerous warnings about not turning up for work following nights out (4th of October & 4th of December), failure to complete tasks as outlined by your previous contract and new contract given on the 11th December and of course your wish to pursue your dancing career”.

81. The Claimant responded to that letter confirming that she had never resigned

and that they had never had any discussion about termination of her employment.

82. When asked about certain aspects of her business, the Respondent said

that she was 25 years old and “learning on the job”. However, as the Claimant was under a contract working for her, she would have known that a dismissal letter was necessary.

83. The position left the Claimant in doubt as to the nature of the relationship as

she kept repeating that she had never resigned and never been fired. 84. Whilst the Claimant accepted that she had undertaken no work in January

or February 2020, she said she was no longer prepared to work for free, and as she had already made a claim to the Tribunal, she did not engage with the Respondent.

85. I find the evidence of the Claimant on this aspect credible and consistent.

She made the claim in December so that her wages would be paid, and so that she could claim the bonus which she thought she was entitled to be paid. Had she not already made the claim in December 2019, and had just


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expected to be paid for wages without taking any further action, the position might well have been different.

86. In respect of January 2020, she had been on holiday and had not completed

the relevant forms or given the requisite notice. She cited her contract, which entitled her to unlimited leave, and the fact that they were friends. She was also still waiting for her December 2019 pay.

87. The Respondent accepted that she was aware of the trip, but was told as a

friend rather than an employer. She had proposed a meeting for when the Claimant returned, but that planned meeting had not taken place. The Claimant disputed that a meeting had been planned.

Unauthorised deductions from wages Wages

88. In respect of a claim for unauthorised deductions from wages, the Claimant

was an employee in December 2019. The Tribunal must decide if she was a worker for the full months of December 2019, January 2020 and February 2020.

89. The definition of “worker” is provided within section 230(3) Employment Rights Act 1996 (ERA). The Claimant worked under a contract of employment from January 2019. The issue for the Tribunal is when that contract was terminated.

90. The claim relates to wages, which are defined in section 27(1) ERA as “any

sums payable to the worker in connection with his employment”. It then sets out a non-exhaustive list of what is included. For the purposes of this case, the relevant types of payment are the salary and holiday pay.

91. Lord Browne-Wilkinson considered the meaning of wages in Delaney v

Staples [1992] IRLR 191, HL. He stated that “the essential characteristic of wages is that they are consideration for work done or to be done under a contract of employment. If a payment is not referable to an obligation on the employee under a subsisting contract of employment to render his serves it does not in my judgment fall within the ordinary meaning of the word “wages”.

92. The dispute that arises is whether the sums claimed are properly payable.

93. The Respondent accepted that a deduction was made from the Claimant’s

December wages. 94. Section 13(3) ERA provides:

“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 the wages properly payable by him to the worker on that occasion (after deductions), the amount


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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”.

95. Section 13(1) ERA creates three types of authorised deduction. The deduction has to have been made by virtue of a statutory provision (s13(1)(a)), or a deduction under a “relevant provision” of the worker’s contract (s13(1)(a)), or one to which the worker has previously signified his or her agreement in writing (s13(1)(b)).

96. This aspect of the evidence was not contested and I find that the Claimant in this case was an employee and a worker, as defined within the Act.

Conclusions

97. The key provision here is s13(1)(b). This section requires the worker’s

agreement in writing to be obtained before the event giving rise to the deduction. The Claimant had not agreed to any deduction in writing prior to the deduction made in December 2019.

98. The Respondent stated that the Claimant only worked two days that month and was not entitled to a full month’s wage as a result.

99. The Claimant had refused to travel into work or undertake any further work until she was paid her November wages. She stated that she could not afford to do so. She had been specific regarding her financial issues and had had to borrow money from family members. The working relationship between the Claimant and the Respondent had broken down to some extent, but the parties remained in contact and had a meeting to discuss their future on 6 January 2020. I have outlined my finding of facts in respect of that meeting above.

100. I find as a fact that the Claimant should have been paid £1,541 for December 2019, and she received £900. That deduction from her wages had to be authorised in advance in writing. Nothing in the Claimant’s written contract provides for this and I therefore find that the Claimant received less than the proper sum payable. A deduction of £641 was made unlawfully by the Respondent.

101. As to January 2020, the Claimant agreed that she had not undertaken

work for the Respondent. 102. I do not find, in light of the agreement in principle regarding reduced hours,

that the Claimant was entitled to her full time wages from 2020. Whilst the altered compensation package had not been agreed between the parties, I have found that the Claimant was only going to be working part time hours into 2020. She had agreed to 3 days per work. If her salary had been reduced on a pro rata basis, she would have been entitled to £924.60 as her take home pay per month.


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103. She was still entitled to take unlimited annual leave as per her contract, although she had not applied for that leave through the correct route.

104. The Claimant was not able to as the Respondent had removed her access

to work emails. Having found as a fact that the Claimant’s contract had not been terminated by the Respondent until 14 February, I find that the Claimant is entitled to a reduced payment of £924.60 for the month of January. This is based on her full time salary being reduced on a pro rata basis, and would be her take home pay.

105. The proper sum payable therefore was £924.60 and no payment was

made. A deduction of £924.60 was unlawfully made by the Respondent. 106. In respect of February 2020, the Claimant had not undertaken work for the

Respondent however her contract was terminated on 14 February. Within that contract the Claimant was entitled to 2 weeks’ notice pay. I find that the Claimant is entitled to a reduced payment of £924.60 for the month of February. The Respondent did not make any payment and therefore the Respondent has unlawfully deducted the sum of £924.60 from the Claimant’s wages.

107. A payment of £900 in respect of December has already been made by the

Respondent. The Respondent should pay the outstanding £641 in respect of that month’s wages.

Remedy 108. The respondent has made an unlawful deduction from the Claimant’s

wages and is ordered to pay to the claimant the net sum of £2,490.20, in respect of the amount unlawfully deducted.

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All judgments and reasons for the judgments are published, in full, online at www.gov.uk/employment-tribunal-decisions shortly after a copy has been sent to the Claimant(s) and Respondent(s) in a case.

_________________________

Employment Judge Beckett

Dated: 31 March 2021


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