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Appeal No. UKEAT/0342/10/RN

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 16 September 2010

Before

HIS HONOUR JUDGE McMULLEN QC

(SITTING ALONE)

MR F DIXON (APPELLANT)

(1) MISS B VIOLLET

(2) SANTIAGO MANAGEMENT LTD T/A T.HQ (IN LIQUIDATION) (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

For the Appellant
No appearance or representation by or on behalf of the Appellant

For the First Respondent
MISS B VIOLLET (The First Respondent in Person)

For the Second Respondent
No appearance or representation by or on behalf of the Second Respondent

JURISDICTIONAL POINTS – Worker, employee or neither

The Claimant signed a contract of employment with T.HQ. She thought it was owned by, and the trading name of, D. She had not heard of S Ltd now in liquidation which was the owner of T.HQ and of which D was a director. On the Employment Judge's finding of unpaid wages, the order was made against T.HQ and D jointly and severally. On appeal HELD the order was wrongly made against D. The name of the Respondent was corrected to S Ltd under Employment Tribunals Act 1996 s35 and Employment Tribunal rule 10(2)(k).

1. This case is about the correct Respondent to an order of compensation. I will refer to the parties as the Claimant and the Respondents as Mr Dixon T.HQ and Santiago Management Ltd.

1. It is an appeal by Mr Dixon against the judgment of Employment Judge Burns sitting at London Central, registered with reasons on 26 March 2010. The Claimant appeared in person. There was no appearance from Mr Dixon or T.HQ.

1. The nature of the claim was for unpaid wages, and she succeeded in obtaining an order for £1206.06, which is about seven weeks' pay. The order was made in the following way:

"The Respondents shall pay the Claimant £1206 plus £64.32 interest on account of arrear wages. If T.HQ is a separate legal entity from Mr Frank Dixon then their liability shall been joint and several."

1. Mr Dixon appealed, saying that he was the Director of Santiago and there could not be an order made against him, as he was not responsible for employing the Claimant. In his Notice of Appeal he cited the parties to the Tribunal proceedings and included Santiago which had entered a response to the claim. For that reason the proceedings were served on the Claimant of course, as the real Respondent to the proceedings and upon Santiago Management Ltd trading as T.HQ in liquidation. A liquidator had been appointed to the company. He is Richard Rowans, appointed at a creditors' meeting on 1 April 2010. He asked to be kept involved with information about the proceedings.

1. Meanwhile, Mr Dixon applied to the Judge for a review, which was refused on the ground that it had no reasonable prospect. He said:

"The Respondent [Mr Dixon] could and should have attended the hearing and there is no good reason why the evidence he now wishes to adduce could not have been produced then."

1. The liquidator indicated he had no intention of attending today's hearing, which had been ordered by His Honour Judge Ansell. Mr Dixon was not present. Miss Viollet was with her friend and she has produced a skeleton argument.

1. The case relates to a series of underpayments of wages which the Claimant has shown. She contends that the whole of her dealings had been with Mr Dixon or another person, Miss Garvie, and she knew nothing of Santiago. The document she produced is a statement of particulars, pursuant to section 1 of the Employment Rights Act 1996, giving the name and address of the employer as T.HQ, 55 Grays Inn Road, London WC1. This is a coffee bar just on the edges of the legal quarter frequented by the legal profession, conveniently situated on the Grays Inn Road. It is known as T.HQ. The document makes frequent references to the Director and to the company.

1. The Claimant received wages, cheques from and payments in from T.HQ. She told the Employment Judge she had never heard of Santiago Management Limited until she was served with the Notice of Appeal, but she must mean the Employment Tribunal response where Santiago formally joins the dispute. Mr Dixon, in his application for review, contends that the Claimant had always known about Santiago and he referred the Judge to a number of documents attesting to that, in particular what he describes as exhibits D and E. Although this application for review is in my papers, the documents appended to it are not. On the evidence which I have, there is no mention of Santiago anywhere in the papers.

1. The Claimant's case before the Employment Tribunal was for the unlawful deduction of her wages in which she was successful. The Judge appears to have been concerned about the enforceability of any award. The Claimant tells me today that he alerted to her to the rights of employees on insolvency, which are contained in Part XII of the Employment Rights Act 1996. On its face, a claim by the Claimant in the present circumstances ought to succeed, for it is within the limit of eight weeks for which the Secretary of State may make an award and the company is in liquidation.

1. However, the Claimant continued with her claim and the Judge awarded the sum. His view was that Mr Dixon was named as a Respondent in the claim form together with T.HQ and Mr Dixon had not attended and of course no one else. The Claimant's case is that she knew she was contracting with T.HQ but thought the proper entity was Mr Dixon, trading as T.HQ and that he owned the company.

1. The evidence apparently now is that Santiago owed T.HQ and Mr Dixon was a Director of T.HQ. As such, as he says in his appeal, he cannot be liable for the employment obligations of Santiago. That Santiago was an undisclosed principal does not affect the relationship. The Claimant knew, as is plain from the contract which she signed, that she was dealing with T.HQ and that the company referred to there could not have been Mr Dixon because he is a person.

1. Understandably, Miss Viollet is deeply concerned about the change of position of Mr Dixon introducing, for the first time in these proceedings, Santiago. But it seems to me that the law is clear: Santiago traded as T.HQ; T.HQ entered into a contract with the Claimant and direction of the Claimant's activities on a day-to-day basis was in the hands of Santiago's Director, Mr Dixon. It may well be he is the principal shareholder.

1. I explained the relationship between these provisions and the insolvency provisions to the Claimant but she is clear that she wishes to continue to fix liability on Mr Dixon, and is not interested in money. In my judgment that is incorrect. Whatever poor relationship there was and is between the Claimant and Mr Dixon does not affect the legal analysis of the employment.

1. The approach that I propose is to allow the appeal of Mr Dixon and set aside the order that he should pay the award, and the refusal to review. What I will do however, exercising my power under section 35 of the Employment Tribunals Act 1996 and Employment Tribunal rule 10(2)(k) is to correct the name of the Respondent and substitute Santiago Management Ltd. It was after all the sole Respondent which volunteered to go on the record and submit the response.

1. Having done that, the order made by the Judge will now apply solely to Santiago Management Ltd in liquidation. So the order is enforceable against it. It will be open to the Claimant to consider her position in relation to Part XII of the Employment Rights Act so that, if so advised, she may take steps to obtain these arrears of wages and this judgment debt through the Secretary of State. But that is a matter entirely for her. I am sure she is dismayed to see Mr Dixon slip out of these proceedings when, on her account, he has been so dishonourable.