Friends "fall-out" leads to £9,670 Employment Tribunal award

Thursday 07 June 2018

The Employment Tribunal has ordered a director to pay over £1,100 in interest for a personal loan one of their former employees, and friend, had to take to "plug the gap" after failing to pay her wages in July 2017.

In total, Absolute Care Limited has been ordered to pay Lynda MacDonald £9,672.06 in holiday pay, unpaid wages and additional wages.

Advocate Ian Jones, Deputy Chairman of the Employment Tribunal, sitting with Sue Cuming and Neal Vautier, Panel Members, heard Mrs McDonald’s claims against Absolute Care Limited.

The company was represented by its owner and director Angela Creighton. Mrs Creighton told Express in March that she was selling the business for personal reasons. The care provider was also removed from the Approved Provider Framework for the provision of Home Care Services.

In its judgment, the Tribunal noted: “Regrettably the case proved ultimately to be a tale of two friends (Mrs McDonald and Mrs Creighton) who fell out, which fall-out resulted in formal action being taken in the Tribunal. Much of the evidence that was heard on 23 March was coloured to some not inconsiderable degree by personal animosity on both sides, particularly Mrs Creighton, who in the Tribunal’s view, in some respects, let her company, the Respondent, down very badly in the way Mrs McDonald’s claim was answered.”

Pictured: "Regrettably the case proved ultimately to be a tale of two friends (Mrs McDonald and Mrs Creighton) who fell out," noted the Tribunal in their judgment.

The Tribunal also noted that preparing the hearing had been difficult as Mrs Creighton failed or refused to engage with Mrs McDonald. The case relied on no less than 11 separate issues and areas of dispute between Mrs McDonald and her employer. This included several counterclaims by Mrs Creighton, most of which she withdrew.

Mrs McDonald claimed there were issues over the precise terms of her employment contract. This arose because Mrs Creighton claimed Mrs McDonald had once said her contract was “not worth the paper it was written on.” The Tribunal eventually concluded that Mrs McDonald’s alleged comments had had no effect on the terms of the contract and that they stood as it had been signed.

Pictured: Mrs McDonald allegedly said her contract was "not worth the paper it was written on" but that didn't affect its terms the Tribunal said.

Mrs McDonald claimed that Mrs Creighton had failed to pay her £1,538.90 of holiday pay. The Tribunal found that she had only taken five out of the 15 days of holiday that she was entitled to and awarded her £1,124.05.

Mrs McDonald also claimed Mrs Creighton had failed to pay her a month’s wages in July 2017, equivalent to £2,513.13. Mrs Creighton admitted that her employee had not been paid any wages on 31 July 2017, when her contract terminated. As a result, the Tribunal awarded Mrs McDonald £3,333.33.

The contract of employment stipulated that after three months, Mrs McDonald would be entitled to a pay rise. The Tribunal found that Mrs Creighton failed to pay £4,100 in wages “over and above" the normal wage on the basis that Mrs McDonald’s had criticised the contract. The Tribunal concluded Mrs McDonald was nonetheless entitled to the increase in her salary and awarded her the difference in wages.

Pictured: Mrs McDonald and her husband had to take out a personal loan after her employer failed to pay her in July 2017.

Mrs McDonald also alleged she had to take out a personal loan on 3 August to cover the unpaid wages. She told the Tribunal she had to take the loan to cover her monthly bills and claimed £1,000 in interest. The Tribunal noted that Mrs McDonald and her husband had no notice or expectation of her not being paid on 31 July. "The direct result of her not being paid was to cause a short-term but nevertheless potentially serious cash- flow issue" they added. "Mrs McDonald states that she and her husband had no choice but to obtain a personal loan in order to ‘plug the gap’ left by the Respondent’s breach of the Contract."

Mrs Creighton asked the Tribunal: "How can my company be responsible for the cost of a loan that Mrs McDonald chose to take out with her husband? I had no control over that. That is something she did of her own free-will." But the Tribunal said that it was evident that if someone is not paid their wages, it would likely cause them financial difficulties, "either by way of a short-term cash-flow problem or longer term because it causes somebody to miss a mortgage payment or a school fee instalment, or something equally important."

The Tribunal wrote: "Not only was it foreseeable but it should have been obvious that failing to pay the wages of an employee, particularly without warning, would give rise to financial difficulties which in turn would require an employee to take some remedial action. Mrs Creighton made an active decision to withhold Mrs McDonald’s wages. The Tribunal have found that that decision was without justification." They therefore concluded Mrs McDonald was entitled to receive all of the costs associated with the loan, £1,114.68.

While she also claimed Mrs Creighton had failed to pay her overtime, Mrs McDonald couldn't offer any evidence and her claim was dismissed.