No, said the Employment Appeal Tribunal (EAT) in Connor v Chief Constable of the South Yorkshire Police in yet another holiday pay case.
In his latest article, Chris Dobbs, Employment Solicitor at Frettens, takes a look at this case and provides some takeaways for employers.
What were the facts?
Mr Connor was signed off work for 15 months with depression and anxiety, at the end of which he was dismissed from the police force.
He worked a normal full-time week of 37.5 hours. As is usual, Mr Connor was entitled to be paid in lieu for any accrued but untaken holiday.
The police force calculates that Mr Connor was owed for 40 hours and 42 minutes with regard to holiday pay, his contract saying any such calculation was based on 1/365th of annual salary for each day of holiday left untaken.
This was in contrast to the fact he would have received a week of holiday as for a week of work if he had still been working.
Related: How to write strong employment contracts
What was the claim?
Mr Connor argued that the fact he received less holiday pay because his contract had come to an end was unlawful and made a claim for the additional holiday pay.
What was the Tribunal’s decision?
The employment tribunal held that Mr Connor’s holiday pay had been correctly calculated in accordance with his contract.
They cited regulation 14 of the Working Time Regulations, which states a payment in lieu of untaken holiday shall be ‘such sum as may be provided for the purposes of this regulation in a relevant agreement’.
Only if there is a ‘relevant agreement’ is a different calculation, set out in regulation 14(3)(b) used.
The tribunal decided that Mr Connor’s agreement satisfied the ‘relevant agreement’ test and therefore the police force were successful in defending the claim. Mr Connor appealed to the EAT.
What did the EAT decide?
The EAT upheld Mr Connor’s appeal. It decided that, where a worker receives a standard annual salary, the calculation should simply be that salary divided by 52 weeks and multiplied by the proportion of the leave year already gone, less any leave taken.
They stressed that taking annual leave is important for health and safety reasons and, by allowing a lower amount to be paid, it would undermine this principle and not be in accordance with the legislation’s purpose.
They further held that regulation 14 did not modify this principle and that any ‘relevant agreement’ had to have a formula that met the minimum rights in the Working Time Regulations. As a result, they can provide for a higher amount, but not a lower one.
So, what was Mr Connor entitled to?
Using the calculation they had set out, the EAT determined that, as Mr Connor’s entitlement was to 5.6 weeks’ holiday, he accrued 0.11 weeks of leave per week of employment.
Eight weeks had passed in the current leave year, so the accrued entitlement was 0.88 weeks of leave. Mr Connor’s gross annual pay was divided by 52 to give the weekly pay and then this was multiplied by the 0.88 calculated to provide the final holiday sum to be paid to him.
An Employment Solicitor’s View
Employment Solicitor Chris Dobbs said: “Despite leaving the EU, employment tribunals have still sought to decide cases in accordance with the Working Time Directive.
Health and safety has often been the reason given when coming down on the side of workers in the cases over the last decade or so. It is therefore no surprise that the EAT upheld Mr Connor’s appeal.
In fact, it is surprising that the tribunal at first instance got it wrong, it being quite clear that a contract providing a lower sum than what the Working Time Regulations set out as a calculation would be held to be unlawful.”
Related
- Are part-year workers entitled to holiday pay?
- How do you calculate holiday entitlement for irregular hours and part-year workers?
- Can a worker carry over holiday pay when employer had said they were self-employed?
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