United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	APPELLANT IN PERSON
For the Respondent	NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE RESPONDENT


 


MR COMMISSIONER HOWELL QC:

1. This appeal has been effectively conceded by an offer of payment from the employer but we give this short decision so as to clarify the position since it is possible some other cases may be affected. The point raised is a small but not unimportant one on the calculation of a payment in place of a contractual entitlement to annual paid holiday. No separate question has been raised in these proceedings on any parallel or overlapping right to compensation in place of annual leave that the employee may have had under the Working Time Regulations 1998 SI No.1833, so we confine our observations to the contractual entitlement, there being no express contractual terms in this case to define the method of calculation.
2. When Mr Jenkins' employment came to an end at the compulsory retiring age of 60 on 24 August 1999, he was still due just under three weeks of his annual paid leave. He had agreed at the request of his employer not to take this as an actual holiday, but to continue working right up to the date of his retirement and to take an equivalent payment instead. The only outstanding issue is how that payment should properly have been calculated. The Employment Tribunal, considering itself bound to do so by the Apportionment Act 1870 and the decision of the Employment Appeal Tribunal in Thames Water Utilities v Reynolds [1996] IRLR 188, applied a fraction of 1/365^th of Mr Jenkins' annual rate of salary multiplied by 14.5, which was his outstanding holiday entitlement expressed in terms of 'working days' based on a 5 day week. Mr Jenkins' complaint is that this method in effect short-changes him since different numerical bases are being used for the top and bottom parts of the same fraction, a 5-day week for the top and a 7-day week for the bottom, and this wrongly disadvantages him.
3. We agree. It must be remembered that the sole purpose of the Apportionment Act 1870, and the equitable principle of apportionment which it embodies, is to arrive at a fair and just apportionment of whatever it is that falls to be divided. In our judgment, nothing in the 1870 Act or in established principle requires like to be compared with unlike, or requires the use of an illogical and potentially unjust method of calculation such as the Tribunal apparently felt bound to adopt here. Insofar as anything said in the judgment of the Appeal Tribunal in Thames Water v Reynolds is to be read as suggesting otherwise, we must respectfully decline to follow it; though we note the comments made by the President in the judgment of 16 February 2000 on the preliminary hearing of this present case that in the Thames Water v Reynolds case, the Employment Appeal Tribunal seems primarily to have been concerned with the denominator of the fraction and it is not clear to what extent the point on the numerator (or the interaction between the two) was in fact argued in that case.
4. For those short reasons, we allow this appeal, set aside the decision of the Tribunal on the calculation issue and substitute our own decision on that issue confirming the correctness of the calculation now agreed by the employer, which is to take Mr Jenkins' annual rate of salary, divide by 365 for "calendar days", and multiply by 20.5 which is his accrued holiday entitlement measured on a consistent basis with that division, that is three weeks less half a day.