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Industrial Tribunals Northern Ireland Decisions |
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You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Hanna v Bulk Trans Ltd Department for Employment and ... Bulk Trans Ltd Department for Employment and ... [2013] NIIT 00795_12IT (04 November 2013) URL: http://www.bailii.org/nie/cases/NIIT/2013/795_12IT.html Cite as: [2013] NIIT 795_12IT, [2013] NIIT 00795_12IT |
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THE INDUSTRIAL TRIBUNALS
CASE REFS: 795/12
827/12
CLAIMANT: Brian Hanna
RESPONDENTS: 1. Bulk Trans Ltd
2. Department for Employment and Learning
DECISION
(A) The claimant’s appeal, under Article 233 of the Employment Rights (Northern Ireland) Order 1996 (“the Order”), is successful, to the extent indicated at (B) below.
(B) It is declared that the Department ought to make a further payment of £439 to the claimant in respect of wages.
(C) It is not declared that the Department ought to make any further payment to the claimant in respect of holiday pay.
Constitution of Tribunal:
Chairman (sitting alone): Mr P Buggy
Appearances:
The claimant was self-represented.
The Department was represented by Mr N Cruikshanks.
The respondent company (“the Company”) was debarred from participating in the proceedings because it had not presented a response.
REASONS
1. The claimant was employed in a business which operated from the Milltown Industrial Estate in Warrenpoint. During the claimant’s time in the business there were a number of changes of employer. Ultimately, his employer was Bulktrans Ltd (“the Company”), which is now in liquidation. He was employed in the business from November 1998 until November 2011. In November 2011, he was employed there as a Transport Manager and Driver.
2. He was dismissed by reason of redundancy in November 2011. Upon the termination of his employment, the Company owed him sums in respect of various employment debts. In these two cases, the claimant makes claims against the Company in respect of those debts. He does not expect the Company to be able to pay the amount of any tribunal award which might be made against it. Accordingly, he does not intend to pursue his claims against the Company in these proceedings.
3. The claimant made applications to the Department (in the Department’s role as the statutory guarantor in respect of certain debts). The applications he made were in respect of wages, holiday pay, notice pay and redundancy pay. In response to that application, the Department made payments to him in respect of holiday pay, notice pay and redundancy pay. The claimant has not appealed in respect of the amounts paid in relation to notice pay or redundancy pay.
4. In these proceedings, he does however appeal against the refusal of the Department to make a payment to him in respect of wages, and in respect of the amount paid to him by the Department in respect of holiday pay. This is my Decision in respect of those appeals.
Findings of fact
5. It is convenient to set out certain findings of fact, relevant to the issues which have had to be determined for the purposes of determining this appeal, in the immediately following paragraphs.
6. The claimant often worked for the company outside Northern Ireland.
7. When he worked outside Northern Ireland, he received subsistence payments, which were described by the employer as an “overnight allowance”.
8. Those subsistence payments were treated as not being taxable.
9. The claimant was working a “lying week”.
10. The claimant worked for two days in November 2011, in respect of which he received no payments from the employer.
11. By November 2011, the claimant’s gross weekly pay, excluding any such subsistence payments was £329. At that time, the claimant was typically receiving subsistence payments, when he was working outside Northern Ireland, which amounted to £40 per week.
The issues in relation to wages
12. The issues in relation to wages were as follows.
13. First, did the claimant work a lying week? (I have resolved that issue in favour of the claimant, in light of his sworn oral testimony during this hearing).
14. Secondly, did the claimant work for any days in November for which he has not already been paid? (The claimant asserts that he worked on two such days. I have resolved that issue in favour of the claimant, in light of his sworn oral testimony during this hearing).
15. In relation to wages, the only other issue is as follows. Should the claimant’s wages, in the context of his application to the Department, be taken to include the overall amount of subsistence payments which he usually received during the average week? The resolution of that issue involves legal principles, which are discussed below.
Conclusions on the wages weekly rate issue
16. I have concluded that the claimant is only entitled to recover pay in respect of his gross taxable pay, and that he is not entitled to recover any amount from the Department in respect of the subsistence payments.
17. I have arrived at that conclusion against the following background and for the following reasons. Article 229(1) of the Order provides that the statutory guarantee legislation applies only to arrears of “pay”. Pay is not defined by the Order itself. However, helpful guidance as to the meaning of the word “pay”, within the context of the statutory guarantee legislation, is to be found in the decision of the Employment Appeal Tribunal in Benson v Secretary of State for Trade and Industry [2003] IRLR 748. In that case, the EAT was construing the meaning of the word “pay” within the context of the equivalent in Great Britain of the statutory guarantee provisions of the Order. In my view, the implication of the reasoning in Benson is that, in the context of Article 227 of the Order, the word “pay” only covers contractual remuneration for work actually done, and it does not include contractual expenses.
18. Accordingly, I have concluded that the claimant is not entitled to payment by the Department of any sum in respect of subsistence payments.
The resolved holiday pay issues
19. Both the claimant and the Department accepted that, if the claimant had worked a five-day week, his annual holiday pay entitlement would have been 30 days. Against that background, the claimant initially asserted that, because he usually worked a six-day week, he should be treated as being entitled to more than 30 days pay per annum (on a pro rata basis, in view of the fact that he typically worked for six-fifths of a five day week). Ultimately, having talked to the Labour Relations Agency, the claimant accepted that 30 days was his annual holiday entitlement. On the basis of the information and evidence available to me, I think he was right to make that concession.
20. The claimant also argued initially that he ought to receive pay in respect of any untaken holiday entitlement which accrued during the entire period of 12 months ending on the date of his dismissal. The Department argued that he was only entitled to holiday pay in respect of untaken holidays to which he became entitled during the period beginning on 3 May 2011 and ending in November 2011 (the month of the termination of his employment). This was because the Company did not become formally insolvent until May 2012: see Articles 229(1)(c) and 230(a) of the Order). Ultimately having discussed the issue with the Labour Relations Agency, the claimant accepted that the Department was right to argue that the holiday pay entitlement was limited to the period beginning on 3 May 2011 and ending in November 2011. I think he was right to make that concession.
The unresolved holiday pay issues
21. The three remaining issues between the parties in relation to holiday pay were as follows.
22. First, how many days’ holidays had the claimant taken during the relevant period (the period from 3 May 2011 until the date of dismissal)?
23. Secondly, should the claimant’s holiday pay be calculated on the basis of his gross weekly pay without subsistence payments, or with the addition of subsistence payments?
24. Thirdly, the claimant says that, for holiday pay purposes, each day of holidays should be treated as attracting one–fifth of a week’s gross pay, not one-sixth of a week’s gross pay
Conclusions on the unresolved holiday pay issues
25. The first of the unresolved holiday pay issues is the factual issue relating to the number of holidays already taken by the claimant during the relevant period.
26. In respect of this aspect of the case, I regarded the claimant’s oral testimony as unconvincing. I carefully noted the claimant’s demeanour and manner of giving evidence in relation to this aspect of the case. He says that he was off on 12 July 2011, but was not off-duty on any other public holiday during the relevant period (the period from 3 May 2011 until November 2011). He says that, during the relevant period, he took no other day of annual leave. I note that, in his application to the Department, it is asserted that he had taken 10 days holidays during 2011. He told me that that figure was incorrect. I accept that he did not personally draft the answers to the questions posed in that form, but he did sign it.
27. Against that background, and for those reasons, and bearing in mind that the onus of proof (as regards the quantification of entitlements under the statutory guarantee legislation) rests with the claimant, I am not convinced as to the alleged incorrectness of the Department’s taken-holidays calculation (the Department’s calculation of the number of days of holiday taken by the claimant during the relevant period).
28. The second unresolved holiday pay issue relates to the rate at which the claimant should be paid in respect of holiday pay Should he be paid on the basis of a weekly rate which incorporates the amount of subsistence payments regularly paid to him while he was at work? Or should be paid on the basis of a weekly rate which takes no account of those subsistence payments?
29. I have decided that the second option is the correct option. In arriving at that conclusion, I have taken account of the decision of the Court of Justice of the European Union in Williams v British Airways [2011] IRLR 948. In that case, the claimant pilots argued that, while on holiday, they should receive basic salary plus two supplements which they received while working. The first was a flying pay supplement (or “FPS”), which was an additional payment of around £10 per hour spent flying. The second was time away from base allowance (or “TAFB”). British Airways regarded TAFB as a payment to cover expenses, but HMRC regarded it as over-generous for this purpose and therefore a portion of it was treated by HMRC as a taxable remuneration payment. The CJEU decided that pay during annual leave has to be comparable or equivalent to pay normally received when working, but that remuneration intended to cover expenses incurred while working need not be paid during annual leave. When the case returned to the United Kingdom, the Supreme Court (see [2012] IRLR 1014) decided to remit the case to the employment tribunal to determine whether the TAFB was genuinely intended exclusively to cover expenses (in which case it would not be payable during annual leave).
30. I have followed the principles which have emerged from the Williams case. In my view, the subsistence payments, which were treated as not being taxable, were clearly intended to constitute payments to cover expenses incurred while travelling on Company business, (as distinct from constituting extra remuneration). Accordingly, the subsistence payments cannot be taken into account for the purpose of calculating holiday pay entitlements.
31. The remaining holiday pay issue was whether or not each day of entitlement in respect of unpaid holidays ought to be calculated on the basis of one-sixth of the appropriate weekly rate of pay (because the claimant worked a six-day week), or whether instead it should be calculated on the basis of one-fifth of that weekly rate. I have concluded that it ought to be calculated on the basis of one-sixth of the weekly rate.
32. I have come to that conclusion against the following background and for the following reasons.
33. On the face of it, it may seem strange that: (1) If you work for a particular enterprise and you receive £250 per week for 40 hours work, spread over five days, you accrue 28 days holidays at £50 a day. (2) However, if I work for the same enterprise for the same £250 per week, but on the basis that I will work there for 48 hours a week, spread over six days, I will receive 28 days holiday pay only at the rate of £41.66 per day.
34. However, if you can earn £250 per week for working only 40 hours a week and I can only earn the same amount per week by working 48 hours per week, the reality is that you are being better paid than I am. (You are being paid at a higher hourly rate than I am). Accordingly, in those circumstances, it is unsurprising that your holiday pay entitlement, per day, is better than my own.
Interest
35. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) (Northern Ireland) Order 1990.
Chairman:
Date and place of hearing: 20 September 2013, Belfast.
Date decision recorded in register and issued to parties:
