Appeal No. UKEAT/0050/07/MT

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
	On 17 June 2008

Before
THE HONOURABLE LADY SMITH
(SITTING ALONE)

O2 (UK) LIMITED	  APPELLANTS

GERARD WALLACE	 RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellants (Respondents)	MS R WEDDERSPOON
(of Counsel)
Instructed by:
02 ( UK ) Ltd  Legal Services
Arlington Business Centre
Millshaw Park Lane
Leeds
LS11 0NE	
For the Respondent (Claimant)	No appearance or representation by or on behalf of the Respondent	

SUMMARY

CONTRACT OF EMPLOYMENT:  Implied term/variation/construction of term
Particular of Employment Holidays;  inclusion of provision whereby shift worker’s holiday allowance of 23 days to be calculated on an hourly basis.

THE HONOURABLE LADY SMITH

Introduction
1.	This case concerns a statement of particulars of employment. It is an appeal against a judgment of an Employment Tribunal sitting at Glasgow, Chairman Ms L Crone, sitting alone, registered on 1 August 2007.  It is the employers’ appeal. They contend that the tribunal erred in determining that the claimant was entitled to the following declaration:
“The claimant is entitled to 23 days holiday, such holiday allowance to be calculated on an hourly basis, with a “day” equating to 9 or 9.5 hours as worked by the claimant.” 

2.	I propose to continue to refer to parties as claimant and respondents. 

3.	The claimant represented himself before the tribunal but did not appear at the appeal hearing. The respondents were represented by Mr Royle, employment consultant before the tribunal and by Ms Wedderspoon of counsel, at the appeal. 

Background 
4.	The claimant was employed as a customer service advisor. He worked a 37.5 hour week on a four day shift pattern. 

5.	The statement of terms and conditions of employment which was provided to him when he started work included the following as regards hours of work:
“Your usual hours of work are 37.5 hours per week.” 
and as regards holidays:
 “You are entitled to 23 days holidays per holiday year. O2’s holiday year runs from 1 April to 31 March. These holidays are in addition to normal bank and public holidays. You will accrue additional holidays with length of service. Details of this can be found on the vitalO2 intranet…” 

6.	The “vitalo2 intranet” included the following:
“People who work part-time, or don’t work a standard 5 – day week, (full time staff on a shift pattern, for example) will have their holiday allowance calculated in hours.”  

7.	In February 2007, the claimant took two weeks off (8 days) to, as he thought, use up his annual holiday entitlement. He was told that he had exceeded it.  On querying that, he was advised that his entitlement was calculated in hours by reference to 7.5 hours equating to one day. 

The Tribunal’s judgment 
8.	The claimant asserted that the respondents’ approach was wrong. That was because the contractual documentation did not define a “day” as being 7.5 hours.  The Tribunal acknowledged that if the claimant was given 23 days annual leave that would equate to 218.5 hours (9.5 x 23) off whereas an employee working a five day week would only receive 172.5 hours (7.5 x 23) off. At paragraphs 28-29, it states:
“28. I noted the example provided by the respondent , comparing the number of hours off for the claimant and a person working a standard 37.5 hour week over five days but I was not convinced the comparison was correct: obviously the person working 37.5 hours a week over five days will work less hours per day. I understood the person working a standard five day week would have their holiday entitlement expressed in days and /or weeks, so that a week off would equate to five days of their entitlement . Further, a day off would reduce holiday entitlement by one day – not by a number of hours. The same must be true for the claimant – a week off would mean four days off, and a day off must reduce holiday entitlement by one day.
29. The claimant worked 37.5 hours per week over four days and there was no dispute regarding the fact that the document on the intranet provided for his holiday allowance to be calculated in hours. The respondents’ position was that they used 7.5 hours as a day, but I heard no evidence regarding this matter and could gain no understanding of the respondent’s position. I could not reconcile the fact that the claimant, having been given 23 days annual leave, in fact was permitted less days holiday because of 7.5 hours being used in the calculation.” 

and it was on that basis that the Tribunal issued judgment in the above terms. 

The Appeal 
9.	Ms Wedderspoon submitted that the Tribunal had fallen into error. Applications under section 11 of the 1996 Act were not for the purpose of clarifying or interpreting an ambiguous term: Construction Industry Training Board v Leighton [1978[IRLR 60.  Further, in the absence of an express term in the contractual documentation, it was open to a Tribunal to imply a term after considering all the facts and circumstances:  Mears v Safecar Security Limited [1982] ICR 626.  The Tribunal’s jurisdiction to declare what “ought” to have been included in the statement was limited to ensuring that it accurately recorded what had been agreed. It was not for the Tribunal to make the parties’ agreement for them:  Eagland v BT Plc [1990] IRLR 328. The Tribunal had failed to take account of the material on the intranet. It had failed to take account of allowing for fairness amongst all employees. It failed to take account of the fact that the claimant himself had accepted that bank holiday overtime payments were calculated on the basis of the day being 7.5 hours. The Tribunal should, on all the evidence, have concluded that the normal day was 7.5 hours and that the claimant’s holiday had to be calculated under reference to that being the case.  Ultimately, the Tribunal had substituted its own view.

10.	The claimant did not appear at the appeal hearing nor was he represented. He had, however, lodged a response to the Notice of Appeal in which the proposition that the normal working day was 7.5 hours was challenged, in which it was submitted that he was in fact worse off than a 5 day worker as regards holidays, and in which it was submitted that the authorities relied on by the respondents were superseded by the statutory provisions.

Discussion and Decision 
11.	I am satisfied that the Tribunal has erred in law. The starting point is section 1 of the Employment Rights Act 1996 which obliges an employer to provide an employee with a written statement of the particulars of his employment. Those particulars must include:

“(4)…………
(c)  any terms and conditions relating to……………..
(i)  entitlement to holidays…..”

12.	The underlying purpose of section 1 is to see to it that each party to the contract has in his possession, a clear written statement of certain terms and conditions which are important in a contract of employment. If an employer fails to deliver a statement of particulars or the statement delivered fails to comply with the requirements as to what must be included in it then an employee can, under section 11 of the 1996 Act, require a reference to be made to an employment tribunal:
“ …to determine what particulars ought to have been included or referred to in a statement so as to comply with the requirements of the section concerned.” 

13.	Although the section uses the word “ought”, that does not confer on the tribunal any jurisdiction to decide what, in the tribunal’s view, the parties should have agreed. It cannot rewrite or amend the parties’ contract. Nor is it for the tribunal, under a section 11 reference, to interpret the contract or rectify it, as is clear from the authorities to which Ms Wedderspoon referred. Firstly, in the Construction Industry Training Board case, the claimant had applied to the Industrial Tribunal for a declaration amending his terms and conditions of employment on a matter relating to his starting salary. Written particulars had been given to him and they contained details of his salary, grade, scale and incremental date. He queried it though, regarding the exact amount of what he referred to as the “threshold payment”. His query was not answered directly. The EAT considered that the parties’ contract was not clear and were concerned that oral evidence and extrinsic evidence regarding the parties’ agreement had been excluded. That did not, however, mean that they considered that they could clarify the contract.  Kilner Brown J said:

“8. The more important and preliminary question is whether or not this application could be heard at all. From the recital and analysis of the facts so far adumbrated it is clear that every particular required by the statutory provisions was included in the contract of employment. The only area of dispute was whether or not the agreed salary scale in effect antedated the threshold payment. If the entry occurred, as it did, half way through the year at an expressed grade for salary scale, was the threshold payment to refer back or be delayed? Was the figure of £3150 inclusive or exclusive of a threshold payment of £104? In one sense this was an entirely peripheral matter which did not affect the contract as a whole. It certainly was not fundamental ………….

10. This application was misconceived and should not have been entertained.” 

14.	More recently, in Eagland, the Court of Appeal appear to have been at pains to stress that the tribunal had no power under section 11 to impose terms on parties which  had not been agreed between them. As Parker LJ said, at p.652G, in that case:

“…there is nothing in any section of the Act which empowers or requires the tribunal to impose upon the parties terms which had not been agreed ….”. 

15.	Accordingly, where a question arises as to whether the statement of particulars ought to include something that is not expressly set out in it, it is important to remember that what the tribunal has to determine is not what the parties’ contract ought to have been but to determine, if it can, what, on the evidence is the whole of the parties’ agreement on the matter in question. In this case that involved asking whether the statement contained the whole of the parties’ agreement regarding holidays and if it did not, what, on the evidence, had been agreed that went beyond the terms of the statement. 

16.	To answer the section 11 reference, the tribunal in this case required to ask itself what if anything had been agreed about holidays and whether it had been set out in the statement, bearing in mind that the agreement about holidays required to be contained in a single document (section 2(4) of the 1996 Act). 

17.	The statement issued to the claimant provided for him to be entitled to 23 days holiday. It also provided that his usual hours of work would be 37.5 hours per week.

18.	There was, however, before the Tribunal, other evidence as to what had been agreed about holidays.  The statement also refers to the respondents’ vitalo2 intranet for further details.  Consultation with that site reveals further information about holidays.  It states:
“People who work part-time , or don’t work a standard 5 day week , ( full – time staff on a shift pattern, for example) will have their holiday entitlement calculated in hours.” 

19.	Also, the Tribunal found that the claimant accepted that when bank holiday allowance was calculated, that was done on the basis of a bank holiday day being 7.5 hours. Further, they found that the claimant acknowledged that if his holiday allowance was not calculated in the way that the respondents asserted was correct, then (contrary to what seems to be suggested in his written response to this appeal) he would get more holidays than an employee who worked their 37.5 hours over a five day week.  At paragraph 12 of its judgment, the Tribunal records:
“The claimant acknowledged the respondent’s example (the claimant worked 37.5 hours per week made up of 4 days x 9.5 hours per day. If he was given 23 days annual leave @ 9.5 hours per day, it would equate to 218.5 hours. In comparison, if someone worked a standard 37.5 hours per week over 5 days and was given 23 days holiday, that person would get 23 days @ 7.5 hours per day, equating to 172.5 hours) would mean that he received more holidays than the other person.” 

20.	The evidence points irrefutably, in my view, to the parties having agreed that the claimant’s 23 days holiday would be calculated on an hourly basis and on the basis that a “day” was 7.5 hours. I so conclude for the following reasons.

21.	When the references to the working week being 37.5 hours and to the standard week being a 5 day week are read together, it seems clear that when a “day” is referred to, that is a reference to 7.5 hours. The terms set out in the intranet site are plainly incorporated into the contract and they set out that where the employee is a shift worker, holidays will be calculated in hours. It then appears equally plain that what the claimant agreed to was that he would be allowed to take off 7.5 x 23 hours out of what would, otherwise, be working hours, keeping his holiday allowance in line with those employees who work a standard 5 day week.  There is then the adminicle of the claimant having accepted that bank holidays are regarded as 7.5 hour days. There is no reason for regarding that as other than another indication of what is regarded as the length of a standard day’s work. 

22.	In these circumstances, whilst the Tribunal was correct to find that the statement of particulars was incomplete, I am satisfied that it was in error in its finding that the claimant was entitled to have his holidays calculated on the basis that a “day” was 9 or 9.5 hours.

23.	I am accordingly, satisfied that this appeal is well founded and I will pronounce an order setting aside the judgment of the Tribunal insofar as it makes a declaration of a term that ought to have been included in the claimant’s statement of particulars and substitute for that declaration the following:
“The claimant is entitled to 23 days holiday, such holiday allowance to be calculated in hours, on the basis that a ‘day’ equates to 7.5 hours.”