REWARD
“The Employment Tribunal held the respondent had reasonable grounds to believe in the misconduct of the claimant and had formed an honest belief in that misconduct”
reasonable for the employer to dismiss a security officer after he fell asleep during a night shift. The claimant worked for the respondent as a CCTV controller for 16 years prior to their dismissal. A manager conducted a spot check on the claimant one day and observed that they were asleep during their shift for 15 minutes. The shift was their sixth consecutive night shift. When CCTV confirmed that the claimant appeared to be sleeping, they were invited to attend an investigation meeting. Initially, the claimant denied having fallen asleep, saying that they had been given medical advice to help manage their “dry eyes”, which included closing them and looking away from their screen. The claimant continued working their usual shifts and was invited to a disciplinary hearing where they again denied being asleep. The respondent deemed this as gross misconduct and summarily dismissed them. The ET found that the investigation was fair, and the belief of misconduct was genuine. However, it held that the dismissal wasn’t in the band of reasonable responses for the employer to take. These factors included that there was a distinction between an individual deliberately leaving their post to nap versus momentarily nodding off. The claimant’s actions weren’t calculated. The claimant didn’t deliberately decide to sleep. It was also relevant that there was no actual loss or damage during the time the claimant was asleep for what the ET deemed to be a “brief period”. The centre within which the claimant worked was closed and securely locked. No members of the public were on site, and it was unlikely anyone would be in any physical danger because of the claimant falling asleep. The ET also noted the claimant had a clean disciplinary record and long service and that falling asleep on duty, while obviously misconduct, wasn’t specifically listed as an act of gross misconduct in the respondent’s disciplinary policy. It was, the ET decided, “a very different order of seriousness when compared to the examples of gross misconduct set out in the policy.” The respondent’s disciplinary policy contained broad categories of behaviour under the labels “misconduct” and “gross misconduct.” Those described as “misconduct” were generally minor incidents and acts of negligence where there are no major consequences, whereas “gross misconduct”
seemingly encompassed wilful or persistent acts of defiance or bad behaviour, dishonesty, criminality and serious acts of negligence. Labelling what the claimant had done as gross misconduct, therefore, seemed at odds with the policy. The ET determined that a reasonable employer wouldn’t have dismissed in the same circumstances, holding that the decision fell outside the range of reasonable responses and that a final written warning would have been appropriate. The claim for unfair dismissal was therefore upheld and the claimant was awarded just over £20,000 in compensation. Tribunal rules tips may need to be included in holiday pay, dependent on how they’re paid In the case of Palanki v The Big Table Group, the ET had to consider whether tips paid via a tronc system should be included in the claimant’s holiday pay The claimant was employed as front of house staff for the respondent and received hourly pay alongside tips via a tronc system. These tips, or “discretionary service charge payments”, were paid by customers by card into the respondent’s account and then paid to the employees via their payroll system. There was no contractual entitlement to guaranteed tips, but there was a contractual entitlement to receive whatever amount the tronc policy determined in any given week. A troncmaster was in place who had control over the allocation and distribution of tips. There was no separate bank account for the tronc. The claimant would lose approximately 50% of their wages when on annual leave if tips weren’t included. They raised this as an issue with the respondent who directed them to the Government guidance and stated that “during periods of leave you will be paid your basic wage.” Claims were brought for failure to pay holiday pay and unauthorised deduction of wages. First, the ET established that remuneration is “that which an employee receives as a reward for the work [he] has done. As such, it includes tips.” For
payments to be remuneration, they must be payable “by the employer to the employee.” The ET held that the references to the tronc in the claimant’s contract and terms and conditions provide a contractual entitlement to receive monies under the tronc policy on any given week. Generally speaking, the ET held, tips aren’t part of remuneration, because they don’t come from the employer but are paid by the customer directly to the employee. However, in this case, by having the tronc system in place, the employer was inserting themselves into the interaction between the customer and the employee. In many cases, a tronc system wouldn’t bring the payment of tips into remuneration. However, this will depend on how that system is operated. The tronc system here was found to be insufficient, meaning the payments were paid “by the employer to the employee.” This was because: l the troncmaster didn’t have their own bank account l HM Revenue and Customs hadn’t been notified of their position as troncmaster l no separate pay as you earn scheme was operated in their name. Here, not including tips in the calculation of remuneration for the purpose of holiday pay deprived the claimant of as much as 50% of their normal remuneration when they’re on annual leave. That would clearly act as a significant deterrent to them taking their full holiday entitlement, given the resulting financial disadvantage. The ET found that the claimant’s tips are “intrinsically linked to the performance of tasks which [he] is required to carry out under his contract of employment and in respect of which a monetary amount, included in the calculation of his total remuneration, is provided.” The ET held that the claimant’s tips fall within the definition of “normal remuneration.” Therefore, the claimant’s holiday pay for the four weeks guaranteed in European Union law, should include an “element referable to the tips they ordinarily earned” when working. The claims for unpaid holiday pay and unlawful deductions from wages were, as a result, successful. n
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| Professional in Payroll, Pensions and Reward |
Issue 113 | September 2025
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