Scottish Court of Session Decisions

In 1994 it was announced that the four Scottish clearing banks, including the defenders, proposed, with effect from 1996, to change the days on which the banks would be closed. The changes included that (i) the August holiday would be the last Monday instead of the first Monday of that month, as from August 1996; and (ii) the banks would remain open for business on 2 January, from January 1997. The pursuer, who was employed by the defenders as a bank employee, was instructed to attend for work in accordance with these arrangements. She raised an action in the Sheriff Court in Glasgow in which she sought, inter alia, a declarator that as an employee of the defenders she was entitled to a paid holiday on each "bank holiday" as defined by the Banking and Financial Dealings Act 1971. Section 1(1) of that Act states that, subject to subsection (2) which provides for variation by Royal Proclamation,

In regard to Scotland it is stated in the schedule:

The argument which was presented on behalf of the pursuer to the sheriff, and which was rejected by him, was that the pursuer could not be required to perform her work on any of the dates which were referred to in the schedule as "bank holidays", by reason of the terms of subsection (4) of section 1 of the 1971 Act. It states:

In this appeal we do not require to consider the soundness of that proposition. It raises a number of questions, including whether and to what extent, so far as Scotland is concerned, a person is compellable to make a payment or to do any act on Christmas Day or Good Friday. Mr. O'Neill, who appeared for the pursuer and appellant, did not rely on the terms of the subsection.

Instead Mr. O'Neill presented the argument that the fact that various days, including 2 January and the first Monday in August, were referred to as "bank holidays" in section 1 (read with the schedule) entailed that the pursuer was entitled to a paid holiday on each of these dates. He submitted that the use of the expression "bank holidays" entailed that on those days banks were required to be closed, and accordingly bank employees such as the pursuer could not be required by their employers to work. He submitted that this was in accordance with the ordinary meaning of the words "bank holidays". He pointed out that according to the Oxford English Dictionary a "bank holiday" meant: "a week day on which banks are legally closed, in Britain usually kept as a general holiday". The expression was not defined in the Act, but it was significant that it was treated for the purposes of section 92 of the Bills of Exchange Act 1882 as one of a number of "non-business days" for the purposes of that Act. The legislation demonstrated that it was not intended that the days would be normal working days for banks. In the light of this construction of "bank holidays", subsection (4) of section 1 could be seen, not as constraining the scope of what was implied by that expression, but as dealing with certain consequences of the fact that banks were required to be closed on those days.

Mr. O'Neill maintained that section 1 of the Act was concerned with achieving the first part of the long title of the Act, namely "to make new provision in place of the Bank Holidays Act 1971", whereas section 2, as could be seen from its provisions, was intended to deal with the following, namely "to confer power to suspend financial and other dealings on bank holidays or other days"; and section 3 was concerned with amending the law relating to bills of exchange and promissory notes with reference to the maturity of bills and notes and other matters affected by the closing of banks on Saturdays. This layout of the Act tended to support the view that section 1 should not be read narrowly as dealing only with those obligations which otherwise would require to be performed on bank holidays, but as requiring banks to be closed and hence that their employees should not be required to work on such days. Mr. O'Neill maintained that this interpretation was supported by the fact that section 4(2) of the Act was concerned with extending the statutory holidays for women and young persons provided for in the Factories Act 1961 so as to include "every bank holiday".

Mr. O'Neill also submitted that his approach gained support by reference to the terms of the Bank Holiday Act 1871, which was repealed and replaced by the 1971 Act. In terms of section 1 of that Act it was stated:

The section then went on to make provision in respect of bills of exchange and promissory notes which otherwise were due and payable on any such bank holiday. He particularly emphasised the words "shall be kept as close holidays in all banks". This clearly required their closing. It was to be presumed that Parliament in enacting the 1971 Act had not intended that there should be a change in the essential significance of a "bank holiday". Indeed, if the obligation to close on bank holidays was removed, so that the legislation merely dealt with those obligations which otherwise would have been compellable on such dates, the intention behind the scheme of the legislation would be rendered ineffective, since it presupposed that banks would continue the practice of being closed on "bank holidays", as defined. It was not open to banks to take unilateral action in changing what previously had been recognised as bank holidays. In these circumstances the submission made by the appellant was more in line with the policy of the legislation.

In dealing with these arguments it is convenient for us to begin by considering the terms of the 1871 Act. It is plain from the terms of section 1 of that Act that the expression "bank holidays" was used as a convenient expression by means of which to refer collectively to those days which were identified in the schedule to that Act. In these circumstances the expression "bank holidays" plainly was no more than a term of art, the implications of which were to be drawn not from the ordinary meaning of the words themselves but from the statutory provisions in which they were employed. We do not overlook the fact that in terms of section 1 of the 1871 Act it was stated that bank holidays "shall be kept as close holidays in all banks...". However, we do not construe these words as imposing any duty on the banks to close on these dates, let alone any indication that such a duty would be enforceable. They appear to us to do no more than to recognise the practice of banks being closed on these days. The object of the section was to make provision as to what was to happen in regard to bills of exchange and promissory notes which otherwise were due and payable on such dates.

The expression "bank holidays" in the 1971 Act fulfils, in our view, the same function. If it had been intended that banks should be required to be closed on such dates, we would have expected express provision to that effect, which there is not. Incidentally we note that the words "shall be kept as close holidays in all banks..." do not even appear. Once again the practical object of section 1 is to deal with those obligations which otherwise would require to be discharged on the days which are identified as bank holidays. Section 1 is evidently not directed specifically to bills of exchange and promissory notes since the effect of the enactment of successive statutes and in particular the Bills of Exchange Act 1882, was to make particular provision for what otherwise would fall to be done on or by reference to a day which was a bank holiday. If the appellant's argument is correct it means that section 1 of the 1871 Act, and in turn section 1 of the 1971 Act, had the incidental effect of conferring the right on bank employees to paid holidays on each of the statutory bank holidays. For the reasons which we have given we do not consider that legislation was designed to play any part in employment law, but rather to regulate transactions which otherwise fell to be carried out on or by reference to the days which were declared to be "bank holidays".

In these circumstances we are satisfied that the sheriff came to the correct conclusion in deciding that, the pursuer was not entitled by virtue of the 1971 Act to a paid holiday on each bank holiday, and repelling the third plea-in-law for the pursuer accordingly. It was not in dispute that the pursuer was entitled to enquiry by way of proof before answer in regard to her contractual case against the defenders. Accordingly the appeal will be refused.