Appeal No. EAT/842/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 1st November 1994

	Before

	THE HONOURABLE MR JUSTICE MUMMERY (P)

	MR J C RAMSAY

	MR S M SPRINGER MBE

WHITTLE CONTRACTORS LTD	APPELLANT

MR A R SMITH	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

	PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	Mr Iain Jones
(Group personnel Manager)
Tilbury Douglas PLC
Tilbury House
Ruscombe park
Twyford
Reading, RG10 9JU

	

	MR JUSTICE MUMMERY (PRESIDENT):  This is an Appeal against the Decision of the Chairman of the Industrial Tribunal held at Southampton, on the 7th July 1994.

	The Chairman heard an Application under the Wages Act [1986] brought by 
Mr Anthony Smith against his former employers, Whittle Contractors Limited.  His complaint, as stated in his Originating Application presented on the 22nd March 1994, was that he had not been paid holiday pay.  He said he had agreed to take voluntary redundancy from his position as chief Contracts Manager on the 21st January 1994.  He had two months notice and received payment in lieu of working for that period, but had not received holiday pay.  He set out the details of the computation of the holiday pay claimed.

	The claim was contested by Whittles Contractors Limited.  It is significant to state that in both the originating Application and in the IT3, the parties regarded the 26th January 1994 as the date when Mr Smith's employment ended.   The ground on which the employer contested the claim for holiday pay was that, having investigated the matter, they were of the view that Mr Smith had not accrued any 1994 annual leave entitlement, but the company intended to discharge its obligation to pay Mr Smith untaken accrued annual leave entitlement for 1993.  That was two days.  The company disputed that there was liability to make any further payment.

	The case went on.  The Decision of the Chairman, Mr Edwards, was that an unlawful deduction from Mr Smith's wages of £374.85. had been made by Whittle Contractors.  The reasons for his Decision were notified to the parties on the 19th July 1994.  The company, being dissatisfied with the Decision, appealed by a notice of appeal dated 25th August 1994.  This is the Preliminary Hearing of that appeal.  The purpose of the Preliminary Hearing is to decide whether the Appeal raises an arguable point of law.  If there is no reasonably arguable point of law the Appeal is dismissed.

	Mr Jones, the group Personnel manager, has appeared on behalf of the company and argues that there is an error in the Tribunal's Decision.  The Decision must be examined briefly to see whether there is any arguable error as Mr Jones submits.  It seems that, to the surprise of the company, the Chairman stated that there was issue as to when the employment ended.  The Chairman said that the claim was for outstanding holiday pay at the end of Mr Smith's employment.  He noted that it emerged during the Hearing that this included the possible entitlement of Mr Smith, up to the 18th March 1994, as there was some dispute about the date of termination of employment.  As already noted, on the IT1 and the IT3 there is no dispute.  As the dispute emerged at the hearing, it was the duty of the Chairman  to resolve it.  He did resolve it, by finding as a fact that, although Mr Smith stopped working on the 26th January 1994, he did not cease to be employed until the 18th March 1994.

	Mr Edwards referred to a letter from the company, which confirmed that Mr Smith had agreed to leave employment on the 18th March due to voluntary redundancy, but the letter went on to state that he would not be required to work from the 26th January and would be paid in lieu.  On this Appeal, Mr Jones, rightly accepts that he cannot dispute the finding of the Chairman that employment ended on the 18th March 1994.  That is a finding of fact by the Chairman on the basis of the evidence before him.  It is not appealable.  

	The question arises as to whether the Chairman was correct in law, in proceeding to decide that Mr Smith was entitled to 4.66 days holiday pay, which, computed at £88.44 per day, produced the figure of £374.85. Having examined the evidence, the Tribunal Chairman said that he was satisfied that Mr Smith was entitled to receive payment for two days worked over the Christmas period, prior to the date when he stopped working.  He also decided that Mr Smith was entitled to 2.66 days pay being the outstanding holidays due to him, as at the 18th March 1994.

	The Appeal is against that Decision.  Mr Jones has put the case very concisely.  His case is that, from the 26th January onwards, Mr Smith did not actually work.  He was in a period of paid leave of absence, a period of some seven weeks.  The contract of employment has a provision about holiday pay in paragraph 4 (d) of the Main Terms and Conditions of Employment for members of staff in the Tilbury Group, which applied to Mr Smith.  That provides, in relation to holiday, that it will be taken during the notice period, but, if this is not convenient to the company, payment will be made in lieu.

	Relying on the provision, Mr Jones argues that the 4.66 days holiday found by the Tribunal Chairman to be due to Mr Smith, should therefore be considered as having been taken during that period of what is described as "paid leave of absence" from the 26th January to 18th March.  The error of law in the Chairman's Decision was to fail to apply the contractual provision to the facts.  

	We have studied the Decision which sets out in commendable detail the basis on which Mr Edwards found the facts and came to his Decision.  We have considered Mr Jones' argument.  We have reached the conclusion that his argument does not raise an arguable point of law, for this reason.  Mr Jones accepts, as he has to, that Mr Smith's employment did not end until the 18th March 1994.  He also accepts that, if Mr Smith had worked out his notice between the 26th January and the 18th March 1994 and not actually taken holiday during that period, he would have been entitled to be paid holiday pay in lieu of taking the holiday.  

	Mr Jones's point is that the position is different if he is not actually working out his notice, because he is not working anyway.  It is as if he is on holiday.  Why should he be paid holiday pay in respect of a period when he is not working anyway?  We can understand the thinking behind that argument, but, in our view, it is not legally sound.  The position is, that Mr Smith was an employee down to the 18th March.  The only reason that he was not actually working down to that date was that he had a letter from the company, saying that he would not be required to work from that date, and would be paid in lieu.  Payment in lieu, in our view, includes not only what he would have earned if he had actually worked during that period; it also includes what he would have been entitled to as holiday pay in that period.

	The fact that he was not actually working, because the employers had not required him to work, does not deprive him of the right to holiday pay which would accrue during that period.  

	It appears from the Decision that there was no concluded agreement between Mr Smith and the company that he accepted the payment made by the company in lieu of working, as including the holiday pay.  It was because it did not include that, that he started the proceedings which the Chairman decided in his favour, on the basis, that although he stopped working on the 26th January, he was in fact an employee of the company down to the 18th March.  As an employee, he was entitled to the 4.66 days holiday pay in lieu of actually taking the holiday.  

	We cannot see any arguable point of law in this Decision.  It seems to us to be legally correct, although we understand the reasons why Mr Jones has advanced the arguments that he has.  The Appeal will be dismissed.