Osbourne -v- Spellbound Holdings Limited 2009 JET case no. 0801-002/09

In this Jersey Employment Tribunal case, the applicant, a mechanic, had succeeded at a liability hearing on unfair dismissal. At the quantum hearing, he claimed three payments: (1) statutory compensation for unfair dismissal, (2) additional wages which he said were owed to him in respect of the suspension period prior to his dismissal, and (3) a payment in lieu of notice. He had a basic rate of pay but, when he completed car repairs, he was paid a higher price work rate. During sick leave and holidays, only the basic rate was payable. The applicant argued that monies due in respect of all three claims should be calculated on the basis of the price work rate of pay. The respondent agreed that the applicant had rights in respect of all three heads of claim, but disputed the basis on which damages were to be calculated, given statutory and customary law principles.

The respondent argued that:

  • Any entitlement in respect of the suspension period had already been met in full.
  • While unfair dismissal compensation was payable, it was payable on the basis of 26 weeks' basic pay only.
  • Any payment in respect of notice was, again, to be calculated on the basis of basic pay only.

In relation to the claim for statutory compensation, the Tribunal held:

"By virtue of the [Employment (Awards) (Jersey) Order 2009], one week's pay for the purpose of awarding compensation for unfair dismissal is basic pay plus overtime pay and shift allowance (neither of which applies in this case) but does not include any other allowance. In our view, the price work rate was "any other allowance" and therefore expressly excluded from the calculation to be made for compensation for unfair dismissal."

With regard to the claim in relation to the suspension period, the Tribunal examined the wording of the contract of employment. The contract stated that suspension would be "with full pay". The Tribunal held that, in the absence of an express definition of "full pay" in the employment documentation, "full" should not be construed as meaning both the basic rate and price work rate, noting that both sick pay and holiday pay were paid at the basic hourly rate. Finally, in respect of notice pay, the Tribunal considered Article 59(1) of the Employment (Jersey) Law 2003, which states:

"The rate of remuneration payable during the period of notice by an employer…shall be that which applied immediately before the notice to terminate the employment was given by the employer."

The Tribunal noted that, immediately before notice was given, the applicant was suspended and that, during this period, he was (correctly) paid the basic rate of pay. Accordingly, payment in lieu of notice was to be calculated at the basic rate.

The Tribunal's judgment will be useful in future cases where questions arise as to how a week's pay should be calculated.