United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Mr A Thomas, Employment Lawyer Of- Messrs Anderson Strathern WS Solicitors 48 Castle Street EDINBURGH EH2 3LX
For the Respondents	No Appearance Nor Representation


 


LORD JOHNSTON:

1. This is an appeal at the instance of the employer in respect of three cases brought by their employees before the Employment Tribunal raising a number of issues one of which now remains live that is to say whether or not there was a failure on the part of the appellants to pay to each of the relevant employees, pay in respect of one day for the winter holiday in 1999/2000, which failure was said to amount to an illegal deduction of wages under the Employment Rights Act.
2. The appellants take this appeal as a matter of law and were represented by Mr Thomas. There was no representation on behalf of the employees but we heard the matter in their absence having regard to the fact that we were satisfied that adequate intimation of the date of the hearing had been given to the relevant trade union.
3. The background to the matter is a declaration by Her Majesty's Government that there was to be an additional day's holiday over the winter period in 1999/2000 entitled "The Millennium Holiday". The date in question was to be 31 December. This happened to be one of the days covered by the contractual arrangements between the appellants and their employees as part of their winter holiday for which they were paid and that was in fact the case.
4. Against that background the decision of the Employment Tribunal in this respect is as follows:-

"The Tribunal first considered the applicant's claim for payment of a day's wages for the Millennium holiday. Under paragraph 1(b) of the applicant's contract it is provided that any holidays, public holidays and holiday pay are to be in accordance with the provisions of the Working Rule Agreement. Mr Thomas for the respondents submitted that the Working Rule Agreement had been departed from by the respondents to such an extent over a long period of time that it was not in effect part of the applicant's contract and was there for guidance only. In any event the respondents were not a party to the Working Rule Agreement. In any event the Government had decreed 31 December 1999 as a public holiday and the respondents' employees already had that day as a holiday. He also submitted that the applicant had claimed holiday pay for 24 December 1999 in lieu of 31 December 1999 but that there was no agreement that 24 December 1999 was to be a holiday.

While the Tribunal accepted that the Working Rule Agreement had been effectively varied by the respondents over a long period, they concluded that where it had not been varied it was still part of the applicant's contract and that it had not been varied by the respondents in relation to holidays. Under the Working Rule Agreement employees were entitled to winter holidays consisting of 7 working days and Christmas Day, Boxing Day and New Years day. Each year one of the 7 working days given by the respondents as a holiday was 31 December 1999. In the year in question, however, 31 December 1999 was declared a public holiday by the Government and the Tribunal therefore concluded that 31 December 1999 ceased to be a working day in the winter holiday period. This meant that, unless another day was allowed as a paid holiday during that period, employees were only being given 6 working days as holidays during that period contrary to the Working Rule Agreement. The respondents did not give another paid holiday during that period and the Tribunal accordingly concluded that their failure to do so amounted to an illegal deduction of wages under Part II of the Employment Rights Act 1996. The applicant's gross weekly wage was £260 and he worked a basic 8 hour day. The tribunal accordingly ordered the respondents to pay to the applicant the sum of £52 (£260 ÷ 5) less Income Tax and National Insurance."

5. Mr Thomas, by way of preliminary point, submitted there was no promulgation of any additional day's holiday by the construction industry Joint Council in relation to the so-called Millennium Holiday and that accordingly the Government and Her Majesty had done no more than create an additional Bank Holiday. Bank holidays are regulated by the Banking and Financial Dealing Act 1971, which he submitted were related solely to the banking industry. The notion of "public holidays" is something entirely different and relatively undefined.
6. He referred us to the case of Tucker & Ors v British Leyland Motor Corporation Ltd [1978] IRLR 493, which case was an attempt by the employer to consolidate so-called public/bank holidays including those to be available in August, into the single Christmas break to extend that latter period. The case turned upon the fact that there was no contractual term in the relevant contracts of employment to give the management the right to transfer public holidays. What Mr Thomas took from the case was that the matter was regulated by contract both in terms of the managers' obligations but also the employees' rights. He therefore submitted that it was erroneous in law to hold the creation of a Bank Holiday under the Act creates a day which is without any variation of a contract of employment anything other than a normal working day. Properly understood, what the Tribunal had done was to effectively state that the employees were entitled to an additional day's paid holiday because of the Government declaration.
7. In our opinion, the argument advanced on behalf of Mr Thomas is unanswerable and that the Tribunal has clearly misdirected itself. Whether or not in each case the Working Rule Agreement referred to by the Tribunal is part of the contract or not, what is absolutely clear is that there has to be a contractual provision which varies the existing entitlement to winter holidays if it is to reflect an extraneous or additional matter, namely a Government declaration of an additional so-called public holiday.
8. We accept the argument that since the employees were actually paid for the day in question, there can be no unlawful deduction of wages. If the claim is really based on an apparent entitlement to an additional day's paid holiday, that argument is hopeless having regard to the fact that the contract of employment was not varied in any case, least of all in each case before us, to incorporate such a provision. We can envisage contracts of employment where there was a general clause that might enable that to happen in a particular case but that is not the case here. We understand that the trade union successfully persuaded a number of employers to give an additional paid day's holiday but that we consider was a voluntary act on the part of those employers not required of them by law.
9. In these circumstances and for these reasons we consider that the Tribunal misdirected itself in its approach to the matter on an essential question of law. This appeal will therefore be allowed and the order by the Tribunal quashed in each case