Cases6009564/2024

Claimant v Proper Group AG

27 February 2025Before Employment Judge John CrosfillEast Londonremote video

Outcome

Claimant succeeds£84,774

Individual claims

Constructive Dismissalsucceeded

The tribunal found the claimant was constructively and unfairly dismissed by the Second Respondent on 26 August 2024 contrary to Part X of the Employment Rights Act 1996. The respondent had failed to pay wages from 25 March 2024 and failed to make pension contributions, amounting to a fundamental breach of contract entitling the claimant to resign and claim constructive dismissal.

Redundancy Paysucceeded

The tribunal found the claimant was dismissed by reason of redundancy when the Second Respondent entered creditors voluntary liquidation on 26 November 2024. The claim for redundancy payment succeeded, but no separate award was made as the claimant had already been awarded a basic award for unfair dismissal.

Breach of Contractsucceeded

The tribunal found the claimant was entitled to three months' notice which was not given, and the respondent failed to pay 5% employer pension contributions from 25 March 2024 to 26 August 2024. The claimant was awarded damages of £3,058.44 for the unpaid pension contributions; the notice pay loss was already compensated in the unfair dismissal compensatory award.

Unlawful Deduction from Wagessucceeded

The tribunal found the Second Respondent unlawfully deducted wages by failing to pay the claimant's salary and cash allowance between 25 March 2024 and 25 August 2024, a period of 4 months. The claimant was awarded £48,833.32 representing the unpaid gross salary and cash allowance for this period.

Facts

The claimant was employed by the Second Respondent from 22 January 2022 earning £145,000 plus a £125 monthly cash allowance. From 25 March 2024, the respondent stopped paying his salary, cash allowance and employer pension contributions (5% of salary). The claimant resigned on 26 August 2024 claiming constructive dismissal. The Second Respondent entered creditors voluntary liquidation on 26 November 2024. Neither respondent appeared at the hearing.

Decision

The tribunal found the claimant was constructively and unfairly dismissed and awarded a basic award of £1,400 and compensatory award of £37,879.34 (grossed up to account for tax on notice pay, limited to 92 days until the company's liquidation). The claimant also succeeded in claims for breach of contract (unpaid pension contributions of £3,058.44) and unlawful deduction of wages (£48,833.32 for 4 months unpaid salary and allowance). Total award was £84,774.38 less £6,396.72 already received from the Redundancy Payment Service.

Practical note

When an employer stops paying wages entirely, this constitutes a fundamental breach entitling an employee to resign and claim constructive dismissal; compensatory awards must be grossed up for tax when they relate to contractual notice periods, and future loss is limited where the employer subsequently enters liquidation.

Award breakdown

Basic award£1,400
Compensatory award£37,879
Arrears of pay£48,833
Unpaid wages£48,833
Pension loss£3,058

Award equivalent: 30.4 weeks' gross pay

Adjustments

Polkey reduction100%

Had the Claimant not been unfairly dismissed his employment would have ended on 26 November 2024 the date upon which the Second Respondent entered creditors voluntary liquidation. This limited the compensatory award to 92 days (26 August to 26 November 2024).

Legal authorities cited

Statutes

ERA 1996 Part XITEPA 2003 s.401Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1996

Case details

Case number
6009564/2024
Decision date
27 February 2025
Hearing type
full merits
Hearing days
1
Classification
contested

Respondent

Sector
other
Represented
No

Employment details

Salary band
£100,000+
Service
3 years

Claimant representation

Represented
No