LTRS Estates Ltd (t/a Orwells) v Hamilton

An Employment Tribunal determining an unlawful-deduction claim must make sufficient findings about the contractual terms, the basis on which those terms are found, and the way the contract operated. A conclusion based on general fairness cannot substitute for that factual and legal analysis.

Where those deficiencies leave no adequate factual platform for an appellate court to decide an alternative contractual case, the proper course is to allow the appeal and remit the matter for a complete rehearing. A differently constituted tribunal may be required where the original decision was wholly flawed and a rehearing before the same tribunal would create an appearance of pre-judgment.

The claimant, a restaurant manager, succeeded before the Employment Tribunal in claims for unpaid work on six bank holidays and one Monday, and for 38 half-days. The tribunal awarded a total of £2,519.37 as unlawful deductions from wages. It reasoned that contractual time off in lieu could not deprive the claimant of payment because he received his written contract late and had no opportunity to take the time off.

The employer appealed. It contended that the tribunal had not identified the contractual terms or undertaken a rational factual and legal analysis. The claimant did not seek to defend the tribunal's stated reasoning, but argued that implied contractual terms could sustain the result. The central issue was whether the findings permitted that alternative basis to be determined on appeal.

1. Appeal allowed. The Employment Judge's decision could not stand. It did not adequately identify the terms of the contract, the basis on which those terms were found, or how the contract operated. Its findings and analysis were incomplete, particularly as to the alleged entitlement to payment instead of time off in lieu.
2. The tribunal's conclusion appeared to rest on a broad view of what was fair, rather than a clear construction of the contract or established findings supporting an implied term. Although the need for proportionate, fair and expeditious tribunal procedure under the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 was recognised, justice still required sufficient facts to support the legal analysis.
3. The Appeal Tribunal declined to uphold the result by implying the contractual terms advanced for the first time on appeal. There was no adequate factual platform to determine what the parties had agreed, what the contract was, or how they had conducted themselves under it. The employer might also have deployed different evidence had that case been advanced below.
4. The matter was remitted for a complete rehearing before a different Employment Judge. Applying the remittal guidance in Sinclair Roche & Temperley v Heard [2004] IRLR 763, the decision was totally flawed and a rehearing before the original tribunal risked giving it an impermissible second opportunity to decide the case and creating an appearance of pre-judgment or bias.

• Employment Appeal Tribunal: Allowed the employer's appeal and remitted the unlawful-deduction claim for a complete rehearing before a differently constituted Employment Tribunal.
• Employment Tribunal, Reading: Employment Judge Warren upheld parts of the employee's unlawful-deduction claim and awarded £2,519.37. The judgment was given on 19 August 2011 and reasons were sent on 3 October 2011.