BWSC Generation Services UK v Taylor

On the proper construction of an employment contract, a termination provision requiring holiday entitlement to be calculated pro rata applies according to the fraction of the holiday year worked. It may require payment for untaken holiday even where holiday pay has already been included in payroll remuneration.

A general shift-pattern clause requiring the pattern to provide for holidays concerns the allocation of working duties. It requires the employer to take account of holiday requests, but does not govern holiday-pay entitlement or limit the termination provision to periods when the employee was off rota.

The employee commenced and ended employment in the same holiday year. After the full hearing, he sought payment for unused contractual holiday entitlement. On reconsideration, Employment Judge Henry held that he was entitled to payment.

The employer appealed. The central issue was the construction and interaction of clauses 8.2 and 9.4 of the employment contract, in particular whether the employee could recover the value of untaken holiday on termination when holiday pay had been paid through payroll.

1. Appeal dismissed. The Employment Judge was correct to conclude that the employee was entitled to payment for accrued but untaken holiday.
2. Clause 9.4 governed a year in which employment commenced or terminated. It required the contractual holiday entitlement, comprising 25 days plus statutory public holidays, to accrue evenly over the holiday year. It also required adjustment where holiday taken did not correspond with that pro rata entitlement.
3. The parties’ arrangement was that holiday pay was paid as a separate component of remuneration throughout employment. The employee therefore had no further loss of that payroll holiday-pay component. His loss was the benefit of holiday time which he had not taken. Clause 9.4 attributed a value to that untaken benefit and required an adjustment on termination.
4. Clause 8.2 concerned the creation and allocation of a 12-hour shift pattern. Its requirement that the pattern provide for holidays meant that the employer should take account of holiday requests when allocating shifts. It did not concern the allocation of pay and did not make entitlement under clause 9.4 conditional on a holiday having been taken during an off-rota period.
5. The employer had therefore to calculate the fraction of the holiday year worked under clause 9.4 and account for the value of holiday which the employee had not received as time off. Any holiday-pay component already paid through payroll need not be paid again.

• Employment Appeal Tribunal: dismissed the employer’s appeal and upheld the reconsideration judgment.
• Employment Tribunal: Employment Judge Henry, by reconsideration judgment dated 16 January 2018, held that the employee was entitled to payment for accrued holiday pay.