Mr D Clark v Lake District Hotels Ltd: 6039450/2025
JUDGMENT
[1]The name of the respondent is amended to “Lake District Hotels Ltd”.[2]The claimant’s claim for payment of accrued annual leave on termination of his employment under Regulation 14 Working Time Regulations 1998 is well-founded. The respondent is ordered to pay to the claimant the sum of £540.00 (subject to statutory deductions as may be appropriate).REASONS
[1]This is a case about the payment of accrued holiday pay on the termination of employment.The Hearing
[2]The hearing took place by CVP. I read a 75-page bundle of documents prepared by the respondent, including witness statements from the claimant and from Ms Boyd and Mr Harris on behalf of the respondent. In the end, nothing Ms Boyd said was disputed, so she did not give evidence. The claimant and Mr Harris gave evidence and were questioned by me. Mr Jones asked some questions of the claimant and the claimant asked some questions of Mr Harris. Both sides made short closing statements.[3]I reserved the decision because it involves a technical legal question about the application of Regulation 15 of the Working Time Regulations 1998 (“WTR”). Neither party was aware of the content of the Regulations, and neither was able to make any submissions about the crucial point. In fairness to both parties, I therefore wanted to take time to consider this aspect of the case fully.The Issues
[4]The claimant was dismissed in September 2025 due to the respondent determining he had failed his probation period. The reasons for the dismissal are not relevant to this claim. Initially there was a wider dispute about the termination payment the claimant received, however, by the time the matter came before me the parties had agreed the following:(a) The claimant had accrued 94.5 hours of annual leave.(b) He had a one-week notice period, which equated to 40 hours.(c) The hourly rate was £13.50.(d) The claimant was given notice by Mr Harris on 10 September 20256. He was told that he did not have to work his notice period.(e) In his final pay, the claimant was paid for his notice period and 54.5 hours of annual leave. This was on the basis that the other 40 hours of annual leave had been used during his notice period.(f) The dispute is whether the respondent was entitled to treat the notice period as annual leave, or whether the claimant should have been paid for his notice period and paid the 40 hours annual leave in addition.(g) The parties agree that the amount in dispute is £540 (gross).[5]Against that backdrop, the two issues in the case were:(a) Did the parties agree that the claimant would take annual leave during the notice period?(b) If not, was the respondent nevertheless entitled to require him to take annual leave during the notice period?Findings of Fact
[6]As its name suggests, the respondent is a business which operates a group of hotels in the Lake District, employing over 300 staff in total. The claimant joined in March 2025 and held a couple of different roles in hotel kitchens before he was given notice of dismissal by Mr Harris, who is the Executive Chef, on 10 September 2025. The claimant lived in staff accommodation.[7]The claimant was given a copy of written terms and conditions of employment, which I assume to be standard across the business. He signed the terms and conditions and agreed during the hearing that he was bound by them.[8]Under the contract, his notice period was one week.[9]Section 6 of the contract deals with Holiday Entitlement and Holiday Pay. The claimant was entitled to 28 working days holiday. This is the minimum leave period required for a full-time worker by the WTR. In legal terms, this means that all leave taken by the claimant was “statutory leave”, he had no additional “contractual leave”. (Sometimes the rules operate differently between the two classes of leave.)[10]The key clause is 6.4, which I have set out below. I have underlined the final sentence, which is the critical part for the purposes of this claim: All holiday requests must be approved in writing in advance by your line manager. You must give at least 4 weeks' notice of proposed holiday. Holidays should not be booked or arranged without written approval by the General Manager, your Head of Department or Management. We may require you to take (or not to take) holiday on particular dates, including during your notice or probationary period.[11]On 10 September 2025 Mr Harris called the claimant into an office. He told the claimant that he was being dismissed, that he had one week’s notice and would not be required to work during that time and that he would be allowed to stay in his accommodation for that week but must vacate it by the end of the week. The claimant asked why he was being dismissed and Mr Harris outlined the reasons. The conversation lasted only a few minutes. The claimant said very little.[12]On the claimant’s account he was told that he would receive a payment for accrued annual leave after the end of his employment. On Mr Harris’s account he told the claimant that he would not be required to work during the notice period as they would use annual leave to ‘cover it’ and that he would be paid anything remaining after that. He said the claimant said ‘yes’ in response to that.[13]After the meeting, at 19.36 on the same day, the claimant emailed Ms Boyd to set out his understanding of what he would be entitled to. It is clear from this email that he believes he will receive 40 hours’ notice pay plus his full accrued annual leave.[14]On 11 September, Ms Boyd emailed back clarifying various points. She writes that the notice period will be covered by accrued annual leave.[15]There is some further correspondence between the claimant and Ms Boyd on 12 September. The claimant did not push back on the statement that his notice pay would be covered by annual leave. However, on 14 September he commenced Early Conciliation with ACAS and on 26 October he presented this claim, explaining that he was seeking to recover £540.[16]The respondent says that the claimant agreed to take annual leave during his notice period because(i) he said ‘yes’ to Mr Harris during the meeting and(ii) he did not push back when Ms Boyd confirmed this.[17]I find that the claimant did not agree to take annual leave during his notice period. I prefer the claimant’s account of the meeting between himself and Mr Harris, principally because this is supported by the email he later sent to Ms Boyd. However, even if I accepted Mr Harris’s evidence, in my judgment the claimant did no more than acknowledge the fact that the respondent was requiring him to take annual leave. He had no real choice in the matter (as might have been the case if, for example, he was asked to elect between working his notice period or using leave). On either scenario, the fact that the claimant did not ‘disagree’ with Ms Boyd afterwards is irrelevant – he chose to pursue Early Conciliation and then pursue a claim. Legal Principles, analysis and conclusions[18]Regulation 15 WTR sets out, at subsections (1)-(4), a regime where the employee can give notice that he wishes to take annual leave (which can be accepted or rejected by the employer) and where the employer can give notice that the employee is required to take annual leave.[19]The notice required under regulation 15 is twice as many days as the number of days that are to be taken. So, to require the claimant to take 5 days’ annual leave starting on 11 September, Mr Harris would have had to notify him on 1 September, 10 days earlier. Clearly, the required notice was not given.[20]However, subsection (5) provides: Any right or obligation under paragraphs (1) – (4) may be varied or excluded by a relevant agreement.[21]A “relevant agreement” is defined in Regulation 2, and includes a written contract of employment.[22]So, the question in this case is whether clause 6.4 of the contract ousts the notice requirement in Reg 15.[23]The case of Industrial & Commercial Maintenance Limited v Briffa UKEAT 0216/08/CEA also involved an employer requiring an employee to take annual leave during a notice period. In that case, the contractual provision read: If an individual gives or receives statutory notice and is not required to perform physical work during that period of notice, the employee shall be regarded as being on holiday during the period of notice. In a short Judgment, HHJ Peter Clark held that that provision was effective under Reg 15(5) to displace the requirement for separate notice to take annual leave to be given under Reg 15(1)-(4). There is, however, no analysis in the case as to the level of certainty required in the contractual wording to have that effect, although the Judge notes that purpose of the WTR – to ensure the workers have sufficient rest periods – is not undermined by the practice of requiring an employee to take a notice period as annual leave.[24]The first-instance case of Smith v Npower Yorkshire Ltd 2500813/12 concerned a provision that “An employee who leaves the company voluntarily will be required to take any outstanding holiday entitlement during the notice period.” That was held to oust the Reg 15 provisions in part, but not entirely, as it did not dispense with the requirement for the employer to specify the precise days to be taken and, factually, neither the employer nor the employee had done anything to ensure that leave was taken – the contractual provision was no more than a statement of the employer’s intentions.[25]The argument from the respondent’s perspective must be that the final sentence of clause 6.4 entirely excludes the notice obligations that would otherwise be put upon the employer under Reg 15 (just as the earlier part of the paragraph varies the obligations that would otherwise be upon the employee). That provision wipes the slate clean, and thereafter the employer can require the employee to take holiday at any time, for any period, and with no minimum notice (subject only to implied terms to exercise that discretion in a non-capricious way etc.). Against that backdrop, when the claimant was informed on 10 September (verbally by Mr Harris) or on 11 September (in writing by Ms Boyd) that his notice period would be covered by holiday pay that decision was determinative. There is no room for a narrower interpretation of clause 6.4 if the respondent’s position is to succeed.[26]I am cautious to accept such an interpretation. Even if it did not thwart the purpose of the WTR in the particular circumstances of this case, it is easy to see how it could readily be used to do so.[27]It seems to me that the better – and indeed more natural – interpretation is that this clause is merely informative. It lets employees know that the employer can require them to take holiday on specific dates. Although that is a feature of the statutory regime, it is not necessarily something which every employee is aware of. Unlike the preceding sentence governing how employees give notice, this sentence, in my judgment, does nothing to displace the mechanism as to how the employer goes about requiring the employee to take leave. The notice provisions in Reg 15 (1)-(4) therefore remain unaffected.[28]I am fortified in this conclusion by the distinction between the permissive wording of the present clause – the employer may require the employee to take leave and the wording in the two cases cited above, which makes it clear that the employee will be required to take leave in certain circumstances.[29]For the reasons I have outlined, I find that the respondent was not entitled to require the claimant to take leave during his notice period without giving the statutory notice in relation to that leave, notwithstanding the provisions of his contract. He is therefore entitled to receive payment for 40 hours of accrued but unpaid annual leave. Approved by: