Mr D Aylett v The Guinness Partnership Ltd: 2401238/2024
EMPLOYMENT TRIBUNALS
Case No 2401238/2024
Between
Mr D AylettClaimantThe Guinness Partnership LtdRespondent
Before
Employment Judge AspinallIn person for claimantMs Headford for respondentDate 13 June 2024
JUDGMENT
[1]The claimant’s complaint of unauthorised deduction from wages succeeds. The contractual overtime element of holiday pay wages properly due to the claimant were £1544.45.[2]The respondent’s right to off-set an amount already paid is established in the sum of £1439.97[3]The respondent is ordered to pay to the claimant £ 104.48 made up as set out below.
REASONS
[4]By a claim form dated 25 February 2024 the claimant brought a complaint of unauthorised deduction from wages. He said that for 11 years he had been underpaid holiday pay. He said that contractual overtime payments had not been included in the formula for calculation of his holiday pay. The respondent acceoted that the claimant was due contractual overtime payments as part of his holiday pay but defended the complaint on the basis of the time period and amounts claimed. A case management order was made for the claimant to provide a schedule the amount of underpayment he says he had suffered and for the respondent to provide a counter schedule setting out the basis of calculation of his holiday pay.[5]The matter came to final hearing before me today. The claimant was a litigant in person. The respondent was represented by Ms Headford. There was a 47 page bundle of the documents which included the claimant’s schedule of underpayments. The respondent had provided written submissions which had been shared with the claimant and a bundle of authorities.
The list of issues
[6]At the start of the hearing we agreed the following simple list of issues
The list of issues
[1]How far can Mr Aylett go back in claiming underpaid holiday pay ? Is it the 11 years he seeks or the 2 years the respondent says is all the Tribunal is allowed to go back ?[2]How should any underpayment of holiday pay be calculated ? In particular how should we arrive at “a weeks pay” and what will the reference period be to find the average amount of overtime payments to the claimant given that the amounts changed from week to week ? How will we work out what was the daily rate of holiday pay ? (will we divide by 7 or 5 to get from a weeks pay to a day’s pay ?)[3]To which days of the claimant’s holiday entitlement did the right to have contractual holiday pay calculations included attach ? Is it just the 20 days that the respondent said under regulation 13 of the Working Time Regulations, or was it the full 29 days holiday entitlement which the claimant had each year ?[4]What amount of holiday pay element of wages were properly payable to the claimant ? What amount of holiday pay element of wages were paid to the claimant and what, if any, was the shortfall in payment to the claimant ?[5]What right of offset if any does the respondent have for any payments made to the claimant ?[6]Has the claimant established that he suffered any financial loss as a result of the underpayment ? Is the claimant entitled to interest on the underpayment ?[7]We agreed to proceed by way of submission only given that many of the facts were agreed. During a short adjournment in which I considered question 1 above, the backstop date, the parties agreed the following facts: The Agreed facts[8]The claimant was employed by the respondent as a multiskilled joiner from 20 June 2011. There were changes to terms and conditions of employment during his employment which were not material to the issues before the Tribunal. His salary for 2022 was £31,629, for 2023 was £33,659 and his salary for 2024 was £34,190. The claimant had 29 days holiday per year. He had fixed working hours, working five days per week on his fixed hours, and in addition to those hours was required to work contractual overtime. The basis for calculation of the overtime payment was agreed between the parties. The total amount of overtime paid for the whole 24 months before he brought his claim was £ 18769.68. That was apportioned over the two years so that a year’s average was agreed to be £ 9384.84[9]The claimant received £1439.97 which the respondent calculated to be the shortfall in holiday pay prior to this final hearing. The claimant agrees that the respondent is entitled to offset that amount from any amount the Tribunal awards.
Relevant Law
[10]The starting point for this complaint was in the provisions of the Employment Rights Act in relation to unlawful deduction from wages complaints at sections 13, 23 and 24. I also had regard to the Working Time Regulations, regulations 13, 13A and 16 and provisions at section 221 and thereafter in the Employment Rights Act 1996 for calculating a weeks pay. I had regard to the Deduction from Wages (Limitation) Regulations 2014.[11]I’m grateful to Ms Headford who put copies of cases that have been decided in this tricky area of law by higher courts into her bundle of authorities which included: Agnew in the Supreme Court, Bear Scotland and Lock. I also had regard to Flowers, Williams and Bamsey. I explained the principles to Mr Aylett in the way that I went through how the respondent had done its calculations. Applying the Law[12]The Deduction from Wages (Limitation) Regulations insert a clause into the Employment Rights Act 1996 which says “(4A) An employment tribunal is not (despite subsections (3) and (4)) to consider so much of a complaint brought under this section as relates to a deduction where the date of payment of the wages from which the deduction was made was before the period of two years ending with the date of presentation of the complaint.”[13]That means that the Tribunal does not have jurisdiction to go back more than two years before the presentation date of the complaint. We all agreed to use the months January 2022 to January 2024 as the relevant two years because we had figures for those months and so as to save any tricky apportionments.[14]The Working Time Regulations refer us to the relevant provisions in the Employment Rights Act that set out how to determine a weeks pay for the purposes of calculation of holiday pay. The respondent had done those sums on that basis in its closing submission but in its counter schedule had used the a different formula for calculating the average overtime pay by dividing the total for 24 months by 2, then by 52.14 , then by 5 to get a day’s pay. The annual overtime payment was agreed at £ 9384.84. The respondent then divided that by 52.14 to achieve a week’s pay. That gave a weeks pay of £179.99. The respondent had then divided that by five to get a day’s pay. This was an important denominator figure to reflect the working time and not the calendar time and that gave a daily rate of contractual overtime element of holiday pay of £36 a day. I approve the formula used by the respondent for that calculation. I then had regard to the point about how many days is the claimant entitled to claim the overtime attaches to, the full 29 or just to the 20 and my finding is that the claimant is only entitled to the contractual overtime element in relation to the 20 days because it only attaches to the regulation 13 leave.[15]I find in the claimant’s favour that there was a shortfall in wages properly payable to him, which has been accepted by the respondent and that the amount that ought to have been paid to the claimant was £ 1544.48. We all agreed that it would have been disproportionate today to have to adjourn and recalculate the average by reference to the 52 week from each instance of leave reference period. What had really made a difference and mattered to the claimant was whether or not he could go back 11 years and he could not. The respondent has the right to offset the amount paid in satisfaction of the judgment that I make and therefore find that the amount due to the claimant by way of shortfall is £104.48[16]During the hearing I raised the remedy point about whether or not the claimant was seeking any financial loss under section 24(2) flowing from the nonpayment at the time or any interest. The claimant had not claimed any loss in his Claim Form and did not give provide oral or documentary evidence to substantiate any loss. I could not award any. Then we talked about interest on unpaid wages. I summarised to both parties the recent arguments in other cases on this point and I heard submissions from each side. It seems to me that the tribunal does not have a statutory jurisdiction for the award of interest on unauthorised deduction from wages complaints, whereas for example it does in discrimination law, and therefore I make no award for interest The total amount therefore awarded to the claimant is the £104.48