A client of Oxford CAB has won her claim in an employment tribunal, on a point that has not been successfully litigated before.
Her employer, Edinburgh Woollen Mill Ltd, had a term in its contracts of employment, allowing it to pay employees, a token payment of £1 in lieu of untaken holidays when their employment ended. This is the amount the client received when she resigned from her job despite having holidays worth £176 left to take.
Under the Working Time Regulations 1998, pay in lieu of statutory paid holiday, which has accrued during employment but has not been taken, becomes payable when employment ends. However, on the face of it an employer can lawfully pay a token payment where the contract allows it to do so, rather than the cash equivalent of the number of days holiday that the employee has left.
Christi Scarborough, the CAB worker who represented the claimant at the employment tribunal, ran an argument based on the European Working Time Directive, which underpins the UK regulations and on recent European case law. The Employment Tribunal accepted this argument and held that, despite the black letter law of the Regulations, they should be interpreted purposively so as to give domestic effect to the European rights. It found that, despite the term in the contract allowing for a token payment of £1, the client was entitled to receive payment equivalent to what she would have received if she had taken the 3 days’ holiday while still employed.
Christi Scarborough, Advice Session Supervisor, Oxford CAB, said:
“When I first read the papers, it was clear to me that what Edinburgh Woollen Mill were doing was against the spirit of the Working Time Regulations, and in particular the EU case law of Stringer and Schulz-Hoff that strongly suggested that their position wasn't well supported by the law itself.
“At that stage it was clear that it was going to be an uphill battle to persuade a judge to rule contrary to the wording of British legislation, but that the legal arguments available were strong enough to potentially win the case.
“It's important that if a legal loophole is used to deny an employee their basic pay and entitlements then that behaviour should be challenged.
“As well as raising the profile of token payment for time in lieu of holiday pay on termination, we hope it will be persuasive to other courts if it is necessary to litigate this matter in future.
“This sends a clear message to employers that a decision not to pay full pay in lieu of holiday pay when their employers leave their employment can be successfully challenged in court and also provides valuable ammunition for anyone seeking to bring such a claim in future.”
Kasia Podlasiak, former Edinburgh Woollen Mill employee, said:
“I wouldn't have been able to do it without the Citizens Advice Bureau because I'm not very familiar with employment law and Tribunal procedures. I only wish people weren't afraid to stand up against their employers and fight for their rights.”