East Lancashire NHS Trust v Imran Akram

An appeal concerning a component of a holiday-pay calculation is premature where the Employment Tribunal has selected a multiplier but has not determined the multiplicand. Until both are established, the tribunal cannot determine either the statutory holiday pay due or whether there has been an unlawful deduction.

Under Working Time Regulations regulation 16, the tribunal must first calculate weekly pay using the statutory method and definitions incorporated by the Regulations. It may then derive an hourly or daily rate by reference to actual earnings. The calculation must ensure that the worker receives no less for leave than they would have received for working.

The claimant was a phlebotomist employed on a 37.5-hour contract but worked a management-prepared rota with varying shifts, hours and enhancements. His holiday pay included basic pay and enhancements, but the employer used calendar days when calculating aspects of the daily rate.

The Employment Tribunal held that the claimant fell within section 222 of the Employment Rights Act 1996 and selected working days as the relevant annual divisor. It lacked sufficient evidence to decide whether he had actually been underpaid and postponed remedy.

The employer appealed, contending that calendar days were the correct divisor and that section 222 concerned weekly, not daily, pay. The central issue was whether that interlocutory conclusion could properly be appealed before the complete holiday-pay calculation had been made.

1. Appeal dismissed. The appeal was premature. The Employment Tribunal had selected a multiplier in the calculation, but had not identified the multiplicand. Without both components, it could not determine the holiday pay legally due or whether any unlawful deduction had occurred.

2. The governing principle is that a worker should receive no less while taking leave than they would have received while working. A proposed weekly, daily or hourly calculation should therefore be capable of a practical sense check: when properly multiplied over the relevant reference period, it should approximate actual earnings for work in that period.

3. The choice of an annual daily or hourly divisor, including 365 or a working-days figure, does not alone establish the correctness of a holiday-pay calculation. Its effect depends upon the corresponding multiplicand. A calendar-day calculation could produce the appropriate total only if it also paid the worker for days on which they would not otherwise have worked.

4. Following Brazel v Harpur Trust [2022] ICR 1380, however, an Employment Tribunal must use the calculation required by regulation 16 of the Working Time Regulations and the statutory definitions incorporated by it. It must first determine the correct weekly pay. It may then calculate an hourly or daily rate by reference to wages actually earned during the relevant period.

5. Both grounds failed because the tribunal's eventual calculation, including the amount actually due, remained to be determined at the remedy hearing.

• Employment Appeal Tribunal: appeal dismissed: [2025] EAT 2.
• Employment Tribunal: judgment sent to the parties on 2 May 2023. It selected working days for the relevant calculation but postponed remedy because it lacked evidence to determine whether the claimant had been underpaid.