Agard v Westminster Kingsway College

For a term-time employee paid under an annual contract, statutory redundancy pay is calculated by reference to the weeks for which the employee is paid, including paid holiday weeks, rather than only the weeks actually worked. The calculation must reflect the contractual remuneration payable for normal working hours under section 221 of the Employment Rights Act 1996. A point is not reasonably arguable merely because it raises a question of law; it must disclose a reasonable prospect of success under the rule 3(10) appeal procedure.

The Claimant, a careers adviser employed on a term-time contract, was dismissed by reason of redundancy. Her contract provided for an average working week of 20 hours for 40 weeks each year. She received an annual salary in equal instalments and was required to take holiday outside term time.

The Employment Tribunal calculated her week's pay by dividing the annual salary by approximately 45 weeks, including paid holiday entitlement, and awarded redundancy pay of £1,739.04. The Claimant appealed, contending that the annual salary should be divided by 40, producing a higher payment. The central issue was the correct method of calculating a week's pay for redundancy purposes.

1. The application and appeal were dismissed. The Claimant's proposed point was not reasonably arguable, although it raised a question of law.
2. Section 221 of the Employment Rights Act 1996 provides the statutory construct of a week's pay where there are normal working hours and remuneration does not vary with the amount of work done. The relevant amount is what is payable under the contract if the employee works throughout normal working hours in a week.
3. The reasoning in Gilbert, North and Bellwood v Barnsley MBC [2002] UKEAT/674/00 applied directly. For an annual term-time contract, the calculation must take account of the weeks for which the employee is paid, including holiday periods, rather than treating the employee as unemployed after the teaching or working weeks end.
4. The Employment Tribunal therefore correctly used approximately 45 weeks as the denominator. The fact that the employee actually worked for only 40 weeks did not justify dividing the higher annual salary by 40.
5. Alternatively, the Tribunal's arithmetic observation provided an independently sound basis for the same result: the remuneration attributable to the 40 working weeks could be divided by 40. The Employment Appeal Tribunal also noted that, at a full hearing, it could have upheld the decision on that alternative basis.

• Employment Tribunal, London Central: Employment Judge Pearl, sitting alone, determined the redundancy-payment claim and awarded £1,739.04. Reasons were sent on 15 April 2010.
• Employment Appeal Tribunal: the rule 3(10) application and appeal were dismissed.