IN THE EMPLOYMENT AND DISCRIMINATION TRIBUNAL

 

 

IN THE MATTER:

 

 

BETWEEN

Zuned Ahmed Choudhury

CLAIMANT

 

AND

 

 

Wild Jacks Limited t/a the Tamarind

                         Restaurant

RESPONDENT

 


TRIBUNAL JUDGMENT


 

Reference:        [2016] TRE147

 

Hearing Date:    17th October 2017

 

Before:                         Advocate C R Davies, Deputy Chairman

                         

                                               

 

Appearance:

For the Claimant: Mr N Le Cornu

For the Respondent: Mr C Sprent

 

 

JUDGMENT

 

The Tribunal has found that the Claimant is entitled to the sum of £620.70 in holiday pay.

 

 

THE REASONS

 

Summary

 

1.       Mr Choudhury brought claims for holiday and bank holiday pay in the total sum of £11,181.76.  The claim covered a period from 2009 until 2016.

  1. The history of this case is complicated for the reasons set out below.  The Claimant was employed as a manager by the Respondent company but he is also a beneficial shareholder of it. The Claimant resigned from his job on 2nd May 2016.  He attempted to bring a claim for constructive unfair dismissal but this claim was struck out as it was issued out of time.  He remained the beneficial owner of shares in the company and for the purposes of this judgment I refer to him as a shareholder.

 

  1. This case was essentially a dispute between shareholders about their respective financial contributions to the business, and what had been agreed between them as shareholders in relation to holiday pay and loans.

 

  1. The Complainant said that he was entitled to four weeks paid leave each year in accordance with the terms of his employment contract.  He sought payment for bank holidays that he had worked.  He had thought that holiday money was being stored up for him to claim at a later date. 

 

  1. The Respondent defended the claims on the basis that Mr Choudhury (as a shareholder) had agreed that his holiday pay would be used to pay off funds due to other shareholders who had provided cash investments, this was to be done via a loan account.  Bank holidays had never been discussed. 

 

The History

 

  1. On 27 November 2009 the Claimant, Christopher Sprent, Seamus Gallagher and Raj Uddin became equal shareholders in Wild Jacks Limited.  They established a restaurant. Each shareholder brought a different set of skills to the business. The Claimant and Raj Uddin had experience in running a restaurant; Christopher Sprent and Mr Gallagher provided working capital and investment and had business experience.  Mr Sprent and Mr Gallagher provided the initial funding with the expectation that the business would repay them within two to three years of trading.  According to Mr Sprent it was agreed that if the business failed the Claimant and Mr Uddin would each be responsible for repaying to Mr Sprent and Mr Gallagher 25% of the funds due to them by the business.   By 2011 Mr Sprent and Mr Gallagher felt that they had contributed sufficient resources and that the business needed to stand on its own two feet.  They insisted that moving forwards the partners would have to make an equal contribution to future funding.  Between 2012 and 2014 Mr Uddin and Mr Choudhury fell out and their working relationship became very difficult.  Mr Uddin left the restaurant in or around August 2014 and claimed unfair dismissal.

 

  1. In 2015 the Complainant was a witness for the company in the Tribunal case brought by Mr Uddin.  Mr Uddin also brought a claim for holiday and bank holiday pay.  The witness statement produced by Mr Choudhury for the 2015 hearing acknowledges the significant investment made by two of the shareholders.  He stated that for three years he and Mr Uddin had agreed not to take any holiday and did not always take their full wages. 

 

  1. The employer’s defence to Mr Uddin’s claim for holiday pay was that in 2011 the four shareholders had agreed that additional funding for the business had to be provided in equal proportions.  Mr Choudhury and Mr Uddin agreed that their pay in lieu of holidays and the shortfall in any wages would be credited to loan accounts within the business so that they would be matching the financial support provided by the other two shareholders.  Holiday entitlement was paid ‘in lieu’, but the amount due to Mr Choudhury and Mr Uddin was essentially paid into the business at their direction and put against a loan account.  In 2015 Mr Choudhury aligned himself with the employer’s position.

 

  1. The Employment Tribunal dismissed Mr Uddin’s claim for holiday pay finding that it was not proven and it was noted that the tribunal had preferred the evidence given on behalf of the respondent, including presumably the evidence of Mr Choudhury.

 

The Contractual documents

 

  1. As mentioned above there is no written shareholders agreement and there are no accounts. That is unhelpful.

 

  1. It was agreed that the weekly wage was £372.44 at the time when the employment came to an end (£62.07 per day).

 

  1. The Claimant did have a statement of employment terms dated 2009 which describe him as a “waiter”.  There is provision for holiday pay and it is to be noted that the claim has been brought for contractual holiday pay.  The provision reads:

 

“Your annual holiday entitlement is 4 weeks paid leave per year.  Holiday entitlement must be cleared within the year.  No holiday entitlement can be carried over to the next year”.

 

I was told that Mr Choudhury did not query that provision.  He said that he was told his holiday money was safe and being built up.

 

Mr Choudhry is claiming payment in lieu of a holiday entitlement calculated over a six year period. He resigned in February 2016 and the effective date of the termination was 2nd May 2016.  The holiday year would run from 1 December being the anniversary of employment (so 5/12ths of an annual holiday period were worked by the anniversary of employment in 2016). He worked a six day week and five months of his holiday entitlement would add up to 10 days. 

 

There is no contractual entitlement to double pay when working bank holidays. The contract notes that the requirement to work 6 days a week could include bank holidays.  It was common ground that Mr Choudhry was managing the business and he was essentially in charge of his working hours.  The point had not been queried during the employment.

 

The Evidence

 

  1. I was provided with two joint bundles of documents.  I heard evidence from the Claimant and from Mr Sprent.

 

  1. It was clear from the Claimant’s written and oral evidence that the shareholders dispute is ongoing, fuelled no doubt by the lack of proper documentation.  It is not for the Employment Tribunal to try to resolve that dispute.  We can only consider the claims brought by Mr Choudhry in his capacity as an employee.

 

  1. In his witness statement for this hearing the Claimant said that in the early years the business could not afford for him to take much holiday, so it was saved up.  The holiday entitlement was accumulated on the understanding that the holiday could be taken later, or would be paid in lieu later. This clearly contradicts the contract which the Claimant signed. There is no recorded variation to that contract.  Mr Choudhury thought that the money was being held in a bank account for that purpose, not in a loan account.  He said that there was never any discussion as to how the entitlement was being accumulated and no loan account was mentioned until 2015 when Mr Uddin’s claim came before the Tribunal.  This contradicted the evidence given by Mr Choudhury in 2015.  Reflecting on that evidence Mr Choudhury said as follows in his witness statement:

 

“Chris Sprent told me if asked by the Judge at the Tribunal, I should say that my holiday money, and that of Raj Uddin, was held in a loan account.  When asked by the Judge at the Hearing, that is exactly what I said.  I went along with the story as I believed it was in the best interest of the business. Chris Sprent made me a liar.”

 

  1. Thus the Claimant now says that he was encouraged to mislead the Employment Tribunal in 2015. When giving evidence to me he said that he thought his holiday was being saved up in an account, or that he could claim the holiday. 

 

  1. Mr Sprent gave evidence on oath.  His evidence appeared to be consistent with the evidence that he had given to the Tribunal in 2015.  He and Mr Gallagher had invested in the business and the business owed them a considerable amount of money which was due in equal shares from the four shareholders.  According to Mr Sprent, Mr Choudhury still owes more than £36,000 to the investors taking into account the amounts which he had paid off by agreeing to credit his holiday pay to his loan account, but according to Mr Sprent only 11 weeks of holiday pay had been credited to the loan along with some unpaid wages.  Mr Sprent pointed out that between 2009 and the end of 2016 Mr Choudhury had been perfectly happy with the arrangement in place for his holiday entitlement and had not queried it.

 

 

  1. Mr Sprent produced the cash books for the business to show how he had accounted for the holiday, and for various other adjustments.  The Claimant argued that the figures were inaccurate and the loan account a fabrication.

 

  1. I have reached the following conclusion on the facts:

 

    1. Mr Choudhury was a beneficial owner of the business. To the extent that he worked bank holidays this appears to have been his choice and there is no evidence that he ever raised the issue of bank holiday pay.  There is no evidence that he was specifically required to work particular bank holidays by the employer and no independent record of the bank holidays worked.
    2. Under his employment contract Mr Choudhury was not able to carry forward any holiday entitlement that he did not claim/use during the year.  There is no credible evidence of an agreed change to that contract.
    3. Mr Choudhury was entitled to be paid for the holiday entitlement that had been accrued in 2016.  Mr Sprent said in his witness statement that only 11 weeks holiday pay had been “paid” via a credit to the loan account and I cannot be satisfied that the employer has paid a proper sum in lieu of the 2016 entitlement.
    4. There is a dispute as to whether Mr Choudhury was “paid” his holiday pay in earlier years via a payment made to a loan account on his behalf.  The employer would say that this was agreed and that they are supported by the documentation, including the documents and evidence from the 2015 hearing.  Mr Choudhury would say that he was told the money was being put by for him.  This is a dispute between the shareholders as to how this money has been accounted for in the business which it is not my place to resolve. I note however that Mr Choudhury does not seem to have challenged the absence of holiday pay over a six year period until after his departure from employment. 

 

  1. Article 11 of the Employment (Jersey) Law 2013 sets out the law on annual leave and bank holiday pay.  The Claimant was entitled to the holiday set out in his contract.  That does not mean that an entitlement that is not taken cannot be lost.  Employees are entitled to bank holidays or to a day in lieu when required to work them.  I am not satisfied that the Complainant was required to work bank holidays if he chose not to. 
  2. Article 14 of the Employment (Jersey) Law 2013 entitles the Applicant to compensation in lieu of untaken leave accrued during the year in which he left employment.

 

The Decision

  1. I have considered the evidence that I have heard and the documents.
  2. I award the sum of £620.70 to the Claimant in respect of his 2016 holiday entitlement.  I note that the Claimant may bring the shareholders’ dispute to the Royal Court in due course.

 

 

Advocate C R Davies, Deputy Chairman                                                    Date:

 

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Page Last Updated: 05 Jul 2018