Appeal No. EAT/0528/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 30 November 2001

Before
HIS HONOUR JUDGE PETER CLARK
MR D J JENKINS MBE
MR A E R MANNERS

THE COLLEGE OF NORTH EAST LONDON	APPELLANT

MS R LEATHER	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MISS M TETHER
Instructed by:
Messrs Eversheds
Solicitors
DX 83
LON/CH’RY  LN  WC2	
For the Respondent	MR J LADDIE
Instructed by:
Messrs Michael Scott & Co
Solicitors
NATFHE Head Office
27 Britannia Street
London
WC1X 9JP	

JUDGE PETER CLARK

1.	This is an appeal brought by the Respondent College below against the decision of a Chairman, Mr G Flint, sitting alone at London (North), now (Central), Employment Tribunal on 5 January 2000, upholding the Applicant, Ms Leather’s complaint that she did not receive holiday pay to which she was entitled under the Working Time Regulations 1998 (the Regulations).

2.	The Applicant was employed as a part-time lecturer at the College.  She claimed that she had not been paid 3 weeks holiday pay, as required under Regulation 13 of the Regulations, for the academic year 1998/99.  It was accepted that the regulations applied to her and that she had received sufficient holiday.  The issue was whether she had been paid for her statutory holiday entitlement.

3.	The following facts are material:

(1)	that the written contract of employment between the parties provided, by Clause 4.2:

“There is no entitlement to paid holiday under this contract.”

And by clause 4.3:

“In fixing rates of remuneration, allowance has been made for ancillary duties including preparation, marking of homework, setting and marking of class tests and preparation of reports and no additional payment will be made in respect of such duties.”

(2)	The Applicant received £17.21 per hour for each hour worked.  It was not disputed that the relevant fixed term contract under which she was employed during the year 98/99 ran from 14 September 1998 until 24 June 1999.  She did 34 teaching weeks, working 8 hours per week.  She was paid by 10 equal monthly instalments during the contract term.  The hourly rate was calculated pro rata by reference to the pay of equivalent full-time lecturers, whose pay included an element of holiday pay.  Accordingly, so that Chairman accepted at paragraph 5 of his reasons, £3.54 of the Applicant’s hourly rate of £17.21 was equivalent to the full-time lecturers holiday pay.

(3)	The Applicant did not know that her hourly rate of £17.21 included £3.54 holiday pay.

Regulation 16 of the Regulations provides, so far as is material:

“(1)	  A worker is entitled to be paid in respect of any period of annual leave to which he is entitled under regulation 13, at the rate of a week’s pay in respect of each week of leave.

(2)	Sections 221 to 224 of the (Employment Rights Act) 1996 shall apply for the purposes of determining the amount of a week’s pay for the purposes of this regulation, subject to the modifications set out in paragraph (3).

(3)	The provisions referred to in paragraph (2) shall apply 

…

	(c)	as if the calculation date were the first day of the period of leave in question;

	(d)	as if the references to sections 227 and 228 did not apply.

(4)	A right to payment under paragraph (1) does not affect any right of a worker to remuneration under his contract (‘contractual remuneration’)

(5)	Any contractual remuneration paid to a worker in respect of a period of leave goes towards discharging any liability of the employer to make payments under this regulation in respect of that period; and, conversely, any payment of remuneration under this regulation in respect of a period goes towards discharging any liability of the employer to pay contractual remuneration in respect of that period.”

4.	In upholding the complaint the Chairman concluded that the contract between the parties, as it existed on 3 September 1998, was for a payment to the Applicant of £17.21 per hour, which payment was solely in respect of hours worked.  The Respondent could not unilaterally vary the contract to apportion £3.54 of the hourly rate to holiday pay.  That would be to defeat the provisions of the Regulations.  Consequently the claim for holiday pay succeeded.

5.	The Scheme of Regulation 16 involves the following questions:

	(1)	does the Applicant have a right under Regulation 16(1) to 3 weeks paid annual leave?  It is common ground that she has in this case.

	(2)	what is the amount of a week’s pay for this purpose?  The answer lies in the application of Sections 221-224 of the Employment Regulations Act 1996 Regulation 16(2).

	(3)	has any contractual remuneration been paid to the Applicant in respect of a period of leave which goes towards discharging the College’s liability to make payments under Regulation 16 in respect of that period?  (Regulation 16(5)).

	(4)	if so, has the Applicant’s entitlement to 3 weeks paid holiday been satisfied in whole or in part.

6.	Ms Tether first submits that since, as a matter of fact, the hourly rate paid to the Applicant included an element attributable to holiday pay as enjoyed by full-time staff, that element must be apportioned to leave taken by the Applicant during the contract term and that discharges the employers liability under Regulation 16.

7.	In Gridquest Ltd and Others v Blackburn and Others (EAT 598/00.  1 November 2001 unreported) a similar point arose, with one important factual distinction.  There, the contract was silent as to holiday pay.  The Employment Tribunal found that the Applicant was unaware that the rate of pay might include a holiday pay element, as in this case.  The Employment Tribunal made no findings as to whether a rolled-up rate of pay was in fact paid.  We remitted the case to the Employment Tribunal for a finding on that point.

8.	The material distinction, in our judgment, in the present case lies in the fact that here there was an express contractual term: “There is no entitlement to paid holiday under this contract”  Clause 42.

9.	In these circumstances we return to Regulation 16(5).  The only payments made to the Applicant were payments under the contract.  The contract expressly provided that there was no entitlement to paid holiday under the contract.  It follows, on the particular facts of this case, that there was no contractual remuneration paid to the Applicant in respect of any period of leave.  Therefore the amount of a week’s pay is academic.  The College has not satisfied Regulation 16(5).  The Applicant’s entitlement under Regulation 16(1) remains unsatisfied.  The Chairman was right to uphold her complaint.

10.	That conclusion is not altered by 2 further points taken by Ms Tether, which she complains were not specifically dealt with by the Chairman below.  We deal with them now.

11.	The first is that because the Applicant was paid in 10 equal monthly instalments, she was paid during periods of leave so that the obligation under Regulation 16 is satisfied.  We reject that submission.  The mechanics of payment are immaterial.  The question is to what periods of time are those payments directed.  We repeat our conclusion on the principal point taken by Ms Tether.  The express term of the contract is disposative of the issue in this case.

12.	Secondly, she has referred us to Regulation 14.  We are quite unable to see how that provision advances the principal argument.  As Mr Laddie points out, by reference particularly to Regulation 14(1)(b), that provision is concerned with the payment of monies in lieu of holiday entitlement not taken at a time when the contract is terminated.  Here, it is common ground that the Applicant took her full holiday entitlement allowed for by the Regulations.  Regulation 14 has no bearing on the issue before us.

13.	For these reasons we shall dismiss this appeal.