Southern Cross Healthcare Co Ltd v Perkins & Ors UKEAT 0276/09/JOJ

Appeal against finding that the claimants were entitled to long service holiday pay in addition to statutory entitlement where it was considered whether the ET was allowed to construe the contracts under s11 ERA. Appeal dismissed.

Appeal No. UKEAT/0276/09/JOJ



At the Tribunal

On 29 October 2009

Judgment handed down on 21 April 2010









For the Appellant

Instructed by:
Abbey Legal Services
Corinthian House (2nd floor)
17 Lansdowne Road

For the Respondent
Ms NAOMI LING (of Counsel)

Instructed by:
Messrs Thompsons Solicitors
247 The Broadway
SW19 1SE



Written Particulars

The employment tribunal can reformulate the juridical basis of a complaint so long as the facts upon which the complaint is based remain the same and the other party suffers no prejudice; Chapman v Simon distinguished; Dr P Evans v Parasol Ltd and RSA Consulting Ltd considered.

The employment tribunal does have jurisdiction under section 11 of the Employment Rights Act 1996 to consider the construction of the terms and conditions of a contract of employment. The requirements of section 1 of the Employment Rights Act 1996 in relation to holiday pay include the particulars accurately stating the terms of the contractual agreement.

The employment tribunal had correctly construed the contractual entitlement of the Respondents to holiday pay and the appeal was dismissed.

**HIS HONOUR JUDGE HAND QC****Introduction**
  1. This is an appeal by Southern Cross Health Care Co. Ltd ("Southern Cross") from the judgment of an Employment Tribunal, comprising Employment Judge Sutton and two lay members, sitting at Ashford on 17 March 2009, the reserved judgment having been sent to the parties on 14 April 2009. It held that the three Respondents to this appeal, Mr S P Perkins, M S Johnson and Ms B Johnson ("the Respondents"), who were all employed at Lauriston House Care Centre in Bromley, were, under their contracts of employment, entitled to long service holiday of five days, in addition to any statutory minimum holiday entitlement (see page 1 of the bundle).
**The Issues**
  1. The Employment Tribunal described what it conceived to be the main issue at paragraph 6 of the judgment as follows:

"The main issue was whether on the facts and documents properly construed the Claimants who were all employed by Ashbourne Limited in 1994 and 1995 and who were at the time of the TUPE transfer all entitled to five days additional holiday per annum for long service had had that benefit under their contracts properly preserved by the Respondents [Southern Cross]

following the transfer."

  1. The Grounds of Appeal are at pages 11 to 14c of the bundle. Ground 1 is headed "Construction of the Contract" and is developed at paragraphs 12 to 29; we will refer to it as "the construction point". In essence, it is that the Employment Tribunal has erred by construing the entitlement to paid holiday as the minimum period as may be laid down by statute from time to time plus any additional long service entitlement.
  1. Ground 2, which appears in paragraphs 30 to 33 at page 14c of the bundle, is headed "Basis of the Respondent's Claims"; we will refer to it as "the jurisdiction point". As set out in the Grounds of Appeal the appeal was put on the basis that the Employment Tribunal reached a conclusion on a case that was not being put by the Respondents. However, at paragraphs 47 to 56, the Appellant's skeleton argument extensively developed the point raised by paragraphs 30 to 33 of the Grounds of Appeal; paragraphs 52 to 55 put the matter in terms of the Employment Tribunal having no jurisdiction because the claim had not been formulated in any way that entitled the Employment Tribunal to hear the complaints let all alone grant any remedy in respect of them. This raised the nature of the statutory basis for the claims and argued that there was no juridical basis for the complaints made by the Respondents.
  1. When the appeal was opened it was submitted by Mr Sonaike of counsel, who appeared on behalf of Southern Cross, that the issue of jurisdiction had been raised before the Employment Tribunal as could be seen from the terms of paragraph 21 of the judgment, which reads:

"Mr Sonaike suggested that the Respondents might refuse to give effect to the Tribunal's judgment if in favour of the Claimants as the claim had been listed as "a claim for failure to provide written terms and conditions" and not under the TUPE regulations or as a breach of contract claim. The Tribunal does not accept that argument either. The Respondents came to the hearing knowing exactly what the issues were as their response and arguments showed. As continuing employees it will always be open to the Claimants to bring further Tribunal proceedings for breach of contract to protect their position should it be necessary."

This is not an easily digestible passage and we will need to return to it later in this judgment. Suffice it to say, for present purposes, that it did not immediately strike us as dealing with lack of jurisdiction.

  1. Ms Ling of counsel, who appeared before this Tribunal on behalf of the Respondents but did not appear below, asked for and was granted an adjournment to take instructions and, having done so, she was unable to accept that the point had been raised before the Employment Tribunal. It was, she submitted, not included in the issues discussed by the Employment Tribunal at paragraph 21 of the judgment and rather contradicted by the terms of the preceding paragraph 20, to which it is not necessary for us to refer at this stage of this judgment; it was a new point not raised by the Notice of Appeal. It had not been raised and should not be raised now; there was nothing about it to bring it into the kind of exceptional categories envisaged in Glennie v Independent Magazines (UK) Ltd [1999] IRLR 719 (see Laws LJ at paragraph 18 and Waller LJ at paragraph 50).
  1. Thus this Tribunal was put in a difficult position. Mr Sonaike told us that the issue of jurisdiction was raised; Ms Ling could not accept that it had been. Whilst we were sympathetic to Ms Ling's submission that the judgment did not bear much trace of any such proposition having been raised we did not accept her submission that paragraph 20 of the judgment showed, with any degree of clarity, that it had not and, without an adjournment to invite comment from the Employment Tribunal, with the accompanying and undesirable postponement of the hearing that must involve, we could not resolve the question as to whether the point had been raised. Accordingly, we have taken the somewhat unusual step of proceeding on the basis that the jurisdiction point was raised, notwithstanding the controversy as to whether it was or was not. For reasons which we hope will become clear as this judgment develops, we do not think that either party has been disadvantaged by us adopting this course.
  1. In order to consider these issues it is necessary to look not only at the judgment of the Employment Tribunal but also at both the terms of pleadings and at the contractual documents.
**The Judgment**
  1. The Employment Tribunal's judgment is at pages 1 to 5 of the bundle. At paragraph 1 (page 1 of the bundle) the Employment Tribunal records what it understands to be the case for the Respondents as being:

"… that following a change in the ownership of the care centre the Respondents [Southern Cross] had in effect deprived them of their five days per annum long service holiday entitlement."

  1. The contentions of Southern Cross are summarised at paragraph 2, as being an acceptance of the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") but not of any deprivation of holiday entitlement because, as contended at paragraph 3, the entitlement had been 25 days paid leave per year before the TUPE transfer and that had been unchanged by it.
  1. There was little oral evidence; an "opening statement" was read by Mr Perkins and Mrs O'Mara read her witness statement on behalf of Southern Cross but there had been no cross-examination and it seems clear that the case had proceeded by scrutiny of the documents. These comprised what might be described as "the pleadings" and the contractual documentation. Before examining the reasoning of the Employment Tribunal in the judgment it is necessary to consider these in some detail.
**The ET1 forms and the ET3 form**
  1. The Employment Tribunal appears to have made no reference to the ET1 forms and the ET3 forms save for paragraphs 1, 2 and 3 to which we have already referred. These constitute the barest summary and, in view of the importance of Mr Sonaike's submission on jurisdiction, we think it necessary to look at them in more detail.
  1. The ET1 form of Mr Perkins is to be found at pages 18 to 27 of the bundle. He had been employed as a maintenance man since 1994. Box 5 (unfair dismissal), box 6 (discrimination), box 7 (redundancy payment) and box 8 (other payments owed, holiday pay, unpaid wages etc) have not been completed (see page 24 of the bundle). Box 9 is entitled "other complaints". In that box, Mr Perkins says that he would like to "take this matter" to an employment tribunal. He asserts that "benefits" (as he described them) were "drawn up" in a "table" given to him in November 1999. It stated:

"one additional day's annual leave for each completed years of service over one year on January 1st each year to a maximum of five additional days."

  1. He then asserts that because of his length of service his "leave entitlement" was:

"the maximum 25 days under the Transfer of Undertakings (Protection of Employment) TUPE Regulations."

and that:

"the above leave was taken forward when Southern Cross bought out Ashbourne plc."

Southern Cross had taken over the care home from its previous owner, Ashbourne Limited, in April 2006, and it has never been disputed that this was a transfer of undertaking to which TUPE applied.

  1. Mr Perkins continues by referring to what he describes as a recent change in the law:

"Forcing all employers to recognise statutory paid bank holidays."

His complaint is that the Southern Cross has

"decided to deduct my five long service days leave entitlement, allowing only 28 days leave instead of the 33 days, that I believe I am entitled to."

  1. The ET1 form of Ms Stacey Johnson appears pages 28 to 37 of the bundle. She had been employed as a laundry assistant from December 1999. Like Mr Perkins, she had left boxes 5, 6, 7 and 8 blank, and she completed box 9 using exactly the same wording as he had done in his ET1.
  1. The ET1 form of Ms Beryl Johnson is at pages 38 to 47 of the bundle. She had been employed as a housekeeper since May 1994. The content of her ET1 form is identical to that of the other two Respondents.
  1. The ET3 form, by which Southern Cross resisted the claim made in the ET1 forms just referred to, had attached to it a three-page document headed "Response" (see pages 55 to 57 of the bundle). Paragraph 6 of the "Response" asserts:

"Under the terms of that contract … [i.e. the contract with Ashbourne] ... each employee was entitled to 4 weeks holiday per year."

Paragraph 7 reads

"Under the terms of the same contract, each employee was entitled to an additional 0.2 days additional holiday for each complete year of service, rising to a maximum of 1 week."

Paragraph 9 asserts that at the time of the TUPE transfer in April 2006 each Respondent was entitled to 25 paid days leave and this had never changed so five days had not been deducted as claimed in the ET1 forms.

  1. A grievance was raised by the Respondents in May 2008. The grievance seems to have been provoked by changes to the WTR, made by the Working Time Regulations (Amendment) Regulations 2007 SI No. 2079 ("the Amendment Regulations 2007"). Under regulation 13 a worker had been entitled to four weeks annual leave each leave year. The new regulation 13A (inserted by the Amendment Regulations 2007) added "entitlement to additional annual leave" by a sliding scale mechanism set out in regulation 13A (2) sub-paragraphs (a) to (e). The scale moved from additional leave of 0.8 of a week (i.e. four days, in most cases) after 1st October 2007, increasing thereafter by increments to 1.6 of a week (i.e. eight days, in most cases) , after the start of the leave year commencing 1st April 2009. The new statutory leave (sometimes referred to as "basic leave") was subject to a maximum of 28 days.
  1. The grievance as recorded at paragraph 11 of the response was that the long service holiday entitlement of five days should not be computed as part of, and, thus, included in, the statutory/basic leave entitlement. After a series of three grievance hearings, Southern Cross rejected the grievance.
  1. Southern Cross's case was, therefore, that the Respondents have got what they are entitled to both under statute and by the terms of their contracts of employment; by the former they are now entitled to 28 days; by the latter they are entitled to 25 days. So they have holidays in accordance with their entitlement (see paragraphs 14 and 15 of the Response). Consequently it is said at paragraph 17 of the Response that the claims are misconceived. However, it is not said anywhere in the ET3 that the claims were not admissible or that the employment tribunal had no jurisdiction.
**The Contractual Documentation**
  1. The Employment Tribunal deals with these documents at paragraphs 7 to 4 of the judgment (pages 2 to 3 of the bundle). By section 1 (1) of the Employment Rights Act 1996 ("ERA"), on starting work an employee has to be given "a written statement of the particulars of employment" and at page 58 of the bundle is a document dated 30 May 1994, which relates to Mr Perkins. It is entitled "contract of employment statement" and "written particulars of main terms of employment" and is obviously intended to comply with the provisions of Part I of the ERA.
  1. In a paragraph headed "Holiday Entitlement" the following appears:

"Your annual holiday entitlement shall be 20 working days per full holiday year. In addition, holiday entitlement will be increased as follows …"

There is then set out a table of holiday entitlement (see pages 58 to 59 of the bundle).

  1. Mr Perkins acknowledged receipt of another similar document on 28 November 2000 (see page 70 of the bundle). This document, headed "Statement of Main Terms of Employment", is at pages 66 to 70 of the bundle. By then his job title was that of maintenance manager. In the paragraph headed "Holiday Entitlement" the relevant section (see page 67 of the bundle) reads as follows:

"The following information is intended as a relevant agreement in accordance with the Working Time Regulations (1998) and any relevant amendments and should be treated as such."

It goes on to say that annual holiday entitlement is 4 working weeks per full year. That much is unchanged from the previous version but, as will be appreciated from the following extract, the mathematical units are differently expressed (the mathematical notation used throughout this later document being that of the WTR).

"Your annual holiday entitlement increases by 0.2 working weeks when you have at least one complete year of service at the start of the holiday year (i.e. on 1st January) and by a further 0.2 working weeks per completed year of service to a maximum of 1.0 working weeks."

In fact, although the units have changed, in terms of holiday entitlement, the mathematical result is the same.

  1. Ms Beryl Johnson signed a pro forma terms and conditions in the same form as the first of the documents signed by Mr Perkins on 5 September 1994 (see page 62); consequently, the "Holiday Entitlement" paragraph is identical to that set out above. It seems likely that either Ms Beryl Johnson was not given new particulars in the form of those given to Mr Perkins in 2000 (i.e. page 70 of the bundle) or, if she was, neither she nor the Appellant produced such a document to the Employment Tribunal. It has been accepted, however, that her terms and conditions were identical to those of Mr Perkins.
  1. Ms Stacey Johnson, on the other hand, seems to have had the later iteration of the "Statement of Main Terms of Employment" and either she did not receive the earlier version or neither she nor the Appellant produced it to the Employment Tribunal. Her document is dated 27 December 2002 but was signed by her on 15 January 2003 (see pages 71 to 75). The "Holiday Entitlement" paragraph is identical to that in Mr Perkins's "Statement".
  1. After Southern Cross had taken over Lauriston House, a letter dated 12 June 2006 was written to Mr Perkins by the Appellant (see pages 76 to 81). Below the salutation, it is headed "Contract of Employment". On the second page (i.e. page 77) there is a heading "Annual Leave" and a subheading "Entitlement" and the subsequent paragraph reads:

"You are entitled to 4 weeks annual leave per annum. Your annual leave will be calculated/pro rata in accordance with the average shift patterns that you work, but this will not exceed 4 weeks annual leave per annum."

Ms Stacey Johnson was sent a similar letter (see pages 82 to 87), as was Ms Beryl Johnson (see pages 88 to 93).

  1. Then on 5 July 2006 an amendment was proffered to and accepted by Ms Stacey Johnson (see page 94). The amendment was to annual leave entitlement and the operative part reads:

"Your annual leave entitlement will be four weeks plus your long service leave accrued to date, which is 5 days. This is frozen and protected"

  1. Thus far, the references to holiday pay had been to "annual leave entitlement" and "annual holiday entitlement" but on 30 September 2007 Southern Cross sent a "Memo" to management (see page 95 to 96). Its subject was "increase in annual holiday entitlement - effective 1 October 2007". The first sentence of the text reads:

"Please note that on 1 October 2007 the minimum statutory holiday entitlement for all staff members will increase from four weeks to 4.8 weeks…"

This introduces a new phrase – "minimum statutory annual holiday entitlement". The document continues:

"From 1 October 2007 you must ensure that all Staff Members with paid annual holiday entitlement of less than 4.8 weeks receive an increase to 4.8 weeks."

It then defines "paid annual holiday entitlement" as including:

"annual leave entitlement and paid days off on public holidays and/or additional leave entitlements"

and in the next paragraphs explains

"this means that, for example, staff members currently entitled to 4 weeks annual leave, and who do not get paid days off for public holidays, must have their annual leave entitlement increased to 4.8 weeks ... However, staff members currently entitled to 4 weeks annual leave and who get paid days off on all eight public holidays will not be entitled to any increase (as they already get 5.6 weeks paid annual holiday entitlement)."

Of course, this is not a document that passed between the parties and thus can only represent Southern Cross's interpretation of the holiday pay entitlement.

  1. The notes of the grievance show that the employees were asserting entitlement to 25 days plus 8 days; this comprised "Long service" entitlement, which had been "frozen and protected" plus 8 bank holidays. Notes of further meetings on 12 May 2008 (see page 98) and on 6 August 2008 (see pages 99 to 100) show the parties to have irreconcilably different views as to the legal entitlement to holiday pay and the grievance was ultimately rejected by a letter of 12 August 2008 from Ms Liz Young (see pages 101 - 103).
  1. Her reasoning was set out in two bullet points:

"Following the transfer … your contractual terms and conditions with regard to annual leave remain the same."


"Your holiday entitlement is above the statutory minimum of 4.8 weeks agreed by the Government …".

  1. There was an appeal on 9 September 2008, the notes of which are at pages 104 and at 105 of the bundle. The notes again indicate that there was clearly no meeting of minds and the appeal was rejected by letter dated 3 October 2008 (see pages 108 – 110) on the basis that the TUPE regulations had not been breached.
  1. A further "memo" of the 30 September 2008, in similar terms to the earlier memorandum, acknowledged the increase from 4.8 weeks to 5.6 weeks as a result of amendments to the WTR. This increase included "Bank/Public Holidays" and the rubric of the memorandum and the reasoning deployed are the same as in the earlier memorandum and, like that document, it was not circulated to employees and so it has precisely the same status. In other words it is not a contractual document and only represents one contracting party's interpretation of the meaning and effect of the agreement.
**The Employment Tribunal's reasoning**
  1. Having considered "the pleadings" and the contractual documentation, we turn to the way in which the Employment Tribunal reached its conclusion. Firstly, the Employment Tribunal made the following finding of fact (paragraph 12):

"To reflect the annual leave acquired by the employees on the basis of their length of service, the company issued written and amendments to their contracts, which stated 'your annual leave entitlement will be four weeks, plus your long service leave accrued to date, which is five days. This is frozen and protected'."

  1. The Employment Tribunal then turned to the law (see paragraph 15), directed themselves as to regulation 4 of TUPE and, having done so, concluded:

"[Southern Cross] therefore inherited the Claimants contracts that included their long service holiday entitlement."

  1. Paragraph 16 of the judgment seems to be a comment on the effect of TUPE generally and, as such, might be described as trite law but it seems to us to emphasise that the Employment Tribunal believed that the matter to be decided called for an analysis of the contractual terms before and after the TUPE transfer.
  1. The Employment Tribunal developed this reasoning at paragraph 17 in the following terms:

"This… [the loss of the long service holiday entitlement] … clearly cannot be done without the Claimants' consent if it is a significant benefit, which formed part of the Claimants' contractual entitlements at the time of the transfer."

Thus the Employment Tribunal thought the issue depended on the contractual entitlement and on consent. Paragraph 18 deals with consent. The Employment Tribunal found that it had not been given. The relevant passage reads:

"In fact the wording of the amendment to their new contracts… gave them the impression that their long service holiday rights were preserved. … The employees consent was not therefore obtained."

  1. The rest of paragraph 18 records the argument advanced on behalf of the employer that in order to construe a contract, one should not stray far from the words of the document, where the meaning is clear. But in paragraph 19, the Employment Tribunal concluded that the "amendment" was not clear. The paragraph does not explain, however, exactly what was not clear, although Mr Sonaike's submission that it was clear the "additional benefit" had been "lost" was rejected.
  1. What was said by the Employment Tribunal to be clear, however, was that:

"Their long service leave was a separate right from other holiday entitlement earned by their long service."

  1. It seems to us the Employment Tribunal meant by this that the "long service leave" was separate from, and, in addition to, other holiday entitlement. The Employment Tribunal goes on to say:

"significant benefit … on an ordinary reading of the amendment to their contracts was preserved."

Whilst paragraph 19 is far from pellucid it seems to us the Employment Tribunal must be taken to have construed the contractual material as leading to the conclusion that it was the intention of the parties to regard long service entitlement as separate from any other entitlement. The use of the word "significant" reflects what had been said by the Employment Tribunal at paragraph 17 about the effect of the TUPE regulations. What the Employment Tribunal really seems to be saying is that the benefit was preserved as an additional and separate benefit and paragraph 19 concludes with the Employment Tribunal not accepting the submission addressed to it on behalf of Southern Cross that the correct construction of the contractual documents was that the additional benefit had been lost.

  1. To our mind paragraph 20 confirms all this; it does not begin with the word "therefore" but it seems to us clearly intended as a conclusion drawn from the preceding five paragraphs. It reads:

"The Tribunal finds that the five days extra holiday entitlement for long service was a significant benefit to which the Claimants were entitled at the date of the transfer, and that it has been and would be a continuing breach of contract for the Respondents not to observe that right. The Claimants will have been entitled to 33 paid holiday with effect from 1 October 2008 when the Respondents introduced the statutory increase in holiday entitlement six months early."

Thus, the Employment Tribunal, having construed the contracts of employment, reached the above conclusion as to their effect.

**The Submissions**
  1. Mr Sonaike's first set of submissions related to "the jurisdiction point". Were the complaints raised under the Working Time Regulations 1998 ("WTR")? If so the Employment Tribunal could not hear them because this was a matter of construction of the contract not of the interpretation of the WTR. Were the complaints of breach of contract? If so the Employment Tribunal could not hear them because there had been no dismissal (see section 3(1) and (2) of the Employment Tribunals Act 1996 and Regulation 3(c) of the Employment Tribunals Extension of Jurisdiction (England and Wales) Regulations 1994 SI no. 1623). Nor did the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") provide free standing remedies for the Respondents. Moreover, this could be neither a matter of terms and condition nor of unlawful deductions under Parts I and II of the Employment Rights Act 1996 ("ERA").
  1. Given that we have been prepared to assume the jurisdiction point is open on this appeal, the real point for consideration is as to whether the terms of section 11 of the ERA **allowed the Employment Tribunal to construe the contracts of employment. Mr Sonaike submitted that section 11 does not allow for construction; it relates only to the failure to give particulars at all (section 11(1)) or to the giving of particulars, which do not comply with the requirements of Part I of the ERA (section 11(2)). Here the particulars had been supplied, as had changes of particulars. All had conformed to the requirements of sections 1 and 4 of the ERA.
  1. The Employment Tribunal had become confused as to its powers. Section 12(2) of the ERA gives only 3 choices to an employment tribunal, namely confirmation of the supplied particulars, amendment of them or substitution of them. This is the limit of the powers of the employment tribunal and these powers are similar to the remedy of rectification; things can be changed where the contract is clearly misstated but where its meaning is doubtful and falls to be construed, section 12(2) has no application. Section 11(2)(b) should be interpreted as relating only to the presence or absence of the topics covered by sections 1 and 4 of ERA and not to the correctness of the particulars supplied under those topics.
  1. The Employment Tribunal, however, had approached the case as if it were a breach of contract action in which a declaratory remedy was sought. This confusion was exemplified by the last sentence of paragraph 21, which stated, quite erroneously, that, whilst the contracts of employment subsisted the Respondents could complain to an employment tribunal of continuing breaches of contract. That statement betrayed the fact that the employment tribunal had arrogated to it the powers of the civil courts, powers, which it did not have. If there was a breach of contract that would have to be dealt with in the County Court.
  1. Mr Sonaike also developed an allied but, perhaps, discrete point in Ground 2 of the Notice of Appeal (see page 14c of the bundle). The Respondents had never put their case in terms of breach of contract and so it had not been open to the Employment Tribunal to analyse the case in a way different to the way it was being put forward (see paragraph 33 at page 14c of the bundle). This was doing what had been condemned as heretical by Balcombe LJ in Chapman v Simon [1994] IRLR 124 who said (see paragraph 33 at page 128):

"This was not a matter of which Ms Simon had ever complained. I have already set out the terms of Ms Simon's originating application, which gives every indication of having been prepared with professional assistance, and the way in which Mr Munasinghe framed his statement of the first incident. Sections 54 and 56 of the 1976 Act make it clear that the jurisdiction of the Industrial Tribunal is limited to complaints which have been made to it; no complaint was ever made by Ms Simon relating to the matters which the majority in paragraph 9 found to have constituted racial discrimination"

Peter Gibson LJ said this on the same subject (see paragraph 42 at page 129):

"Under s. 54 of the Act, the complainant is entitled to complain to the Tribunal that a person has committed an unlawful act of discrimination, but it is the act of which complaint is made and no other that the Tribunal must consider and rule upon. If it finds that the complaint is well founded, the remedies which it can give the complainant under s. 56(1) are specifically directed to the act to which the complaint relates. If the Act of which complaint is made is found to be not proven, it is not for the Tribunal to find another act of racial discrimination of which complaint has not been made to give a remedy in respect of that other act."

Here, Mr Sonaike submitted, the Employment Tribunal had fallen into precisely the same error.

  1. If he was wrong about these matters of jurisdiction, on the second point (the construction point) Mr Sonaike submitted that the Employment Tribunal had erred by accepting that there was a contractual entitlement to 25 days plus a further 8 days of public holiday. The error lay in the Employment Tribunal's use of the phrase "in addition to any statutory minimum entitlement". This was not a contractual term either before or after any TUPE transfer. It does not appear in any of the particulars and what had "been frozen" was the 20 days statutory minimum, together with the additional long service holiday allowance. So all that had happened was the Respondents were contractually entitled to 25 days holiday both before and after the TUPE transfer. As a result of amendments to the WTR this became the same as the statutory minimum. When the minimum annual holiday was increased by Southern Cross to 5.6 weeks or 28 days in October 2008 in anticipation of the change to statutory minimum in April 2009, that became both the contractual source of, and the limit of, the Respondent's entitlement. By then the "extra 5 days" had been subsumed into the amount of holiday provided for by the contracts of employment and the concept of "in addition to any statutory minimum entitlement" was not a proper construction of the contract of employment but an artificial construct proffered by the Respondents and wrongly accepted by the Employment Tribunal.
  1. Ms Ling submitted on behalf of the Respondents that the Employment Tribunal had jurisdiction to deal with the complaint raised by them. She accepted that the Employment Tribunal's judgment must involve a construction of the contracts of employment and that the only statutory mechanism for that must reside in section 11(2)(b) of ERA. But as a matter of statutory interpretation the wording of the sub-section was sufficiently wide to allow for a construction of the contract and the reflection of that construction through the medium of section 12(2). Moreover, section 11(3) created exceptions but notably not in relation to the accuracy of holiday entitlement. She submitted that not only was her interpretation consonant with the text but also fulfilled the statutory purpose of the legislation.
  1. Secondly, Ms Ling submitted that the Employment Tribunal had construed the contracts of employment correctly. Whichever way one looked at it, whether from the point of view of the wording of the original particulars or the wording of later amendments, it was always clear that long service entitlement was to be in addition to the statutory minimum currently prevailing. This was so despite the slight change of wording in 2002. Alternatively, whatever the previous position the amendment of 2006 (see page 94 of the bundle; the wording is quoted at paragraph 28 above) expressly declared that the long service entitlement was "plus" and was "frozen and protected". Therefore the position was settled by that amendment for the future and, as the Employment Tribunal had recognised, unless the Respondents consented to a change, their long service holiday entitlement was henceforth to be added to any other holiday entitlement. In the statutory context of TUPE support for that proposition could be derived from paragraph 29 of the judgment of Mummery LJ in Power v Regent Security Services Ltd [2008] ICR 442. Although the factual context was different to that in the present case, the passage emphasised that TUPE protected acquired rights but did not prevent the employee from gaining additional rights. In effect, on this alternative argument, this is what had happened in the instant case after the 2006 amendment.
  1. At the end of her submissions Ms Ling made reference to the unreported decision of Bean J in this Tribunal in the case of Dr P Evans v Parasol Ltd & RSA Consulting Ltd UKEAT/0536/08. She submitted that the approach adopted by the learned judge at paragraph 8 answered the point raised at paragraph 33 of Ground 2 of the Notice of Appeal (see paragraph 46 above). The authority was not to hand and so she undertook to submit it. Consequently we gave Southern Cross the opportunity to submit written submissions. This was done on 11 November 2009. Unhappily, there was then some slight confusion, for which nobody is to blame, as to whether the Respondents wished to reply. This was done by 23 December 2009.
**Discussion and Conclusions**
  1. We turn firstly to the question as to whether the Employment Tribunal could treat the complaints made by the Respondents as contractual matters falling within the ambit of sections 11 and 12 of ERA (and possibly other statutory provisions) when that was not how the claims had been formulated. We do not accept Mr Sonaike's submission that this case was on all fours with Chapman v Simon. That was a case where the contentions of the complainant as to three specific factual matters had been rejected but the industrial tribunal had alighted on a fourth, about which no complaint had been made. By contrast, the factual basis of the complaint in the instant case has remained constant; it was about the amount of holiday entitlement. That was the complaint at the outset and that remained the complaint throughout. What changed was the analytical basis for the complaint. The Respondents, who, by contrast to Ms Simon, appear not to have had discernible professional assistance (although we recognise that may not be a significant point of distinction between the two cases), had framed their complaint in terms of bank holidays but their fundamental grievance was that they thought they had been promised five days of long service holiday entitlement over and above any other entitlement.
  1. On the other hand we think the Respondents put it too high when it is submitted in the letter of 22 December 2009 (by way of reply to Mr Sonaike's written submission of November 2009) that the following passage from the judgment of Bean J in Dr P Evans v Parasol Ltd and RSA Consulting Ltd:

"The original decision to strike out against the First Respondent had been made on two grounds. One was the Claimant's statement to the Employment Judge that she considered that Parasol was not liable to pay her any money. With respect to the judge, it is unwise to rely on the view of an unrepresented Claimant as to the law, particularly in an area of such complexity and difficulty as that of agency workers. In any event, what the Claimant said was said without the benefit of the email."

not only allows the Employment Tribunal to reformulate a claim but makes it a positive duty to do so.

  1. In our judgment, what the Court of Appeal disapproved of in Chapman v Simon was finding a factual complaint proved when those facts had not been the subject of actual complaint. Where the facts have been complained about it seems to us that for the Employment Tribunal to find a different juridical basis for the complaint put forward is quite acceptable, always providing that no prejudice is created as a result. Here Southern Cross was represented by experienced counsel, who was very able to argue that the new conceptualisation of the claim was wrong and who never suggested that there was a need for adjournment or that his client was in any way disadvantaged by looking at the unchanged factual basis of the claim through different legal spectacles. Therefore, the Employment Tribunal did not fall into error by looking at the claim in a different way.
  1. So far as jurisdiction is concerned we accept Mr Sonaike's submission that the Employment Tribunal's only possible route to scrutiny of the holiday pay entitlement was via Part I of the ERA. Ms Ling largely agreed with this, although the support she sought from the judgment of Mummery LJ in Power v Regent Security Services Ltd meant that she had to regard TUPE as a significant issue in the case. Clearly the Employment Tribunal regarded TUPE as important. But it seems to us that the fact there had been a TUPE transfer no more conferred jurisdiction on the Employment Tribunal than it would in any case save those where the circumstances of complaint were specifically provided for by the TUPE regulations and that was plainly not so in the instant case. **Accordingly the only question to be decided on the jurisdiction point was the narrow but important one as to whether sections 11(2) and 12(2) properly understood and interpreted enabled the Employment Tribunal to consider whether the particulars accurately set out the contractual agreement as to holiday entitlement in the cases of the three Respondents?
  1. Section 11(2) of ERA reads:

" (2) Where-

(a) a statement purporting to be a statement under section 1 or 4, or a pay statement or a standing statement of fixed deductions purporting to comply with section 8 or 9, has been given to an employee, and

(b) a question arises as to the particulars which ought to have been included or referred to in the statement so as to comply with the requirements of this Part,

either the employer or the employee may require the question to be referred and determined by an employment tribunal."

and Section 12(2) reads:

"(2) On determining a reference under section 11(2) relating to a statement purporting to be a statement under section 1 and 4, an employment tribunal may –

(a) confirm the particulars as included or as referred to in the statement given by the employer,

(b) amend those particulars, or

(c) substitute other particulars for them,

as the employment tribunal may determine to be appropriate; and the statement shall be deemed to have been given by the employer to the employee in accordance with the decision of the tribunal."

In order to complete the picture we should remind ourselves of the terms of section 1(4) of ERA, which reads:

"(4) The statement shall also contain particulars, as at a specified date not more than seven days before the statement (or the instalment containing them) is given, of –


(d) Any terms and conditions relating to the following-

(i) entitlement to holidays, including public holidays, and holiday pay (the particulars given being sufficient to enable the employee's entitlement, including any accrued holiday pay on the termination of employment, to be precisely calculated) …"

Section 4(1) of ERA deals with subsequent changes in the following terms:

"(1) by sections 1 to 3 to be included or be referred to in a statement under section 1, the employer shall give to the employee a written statement containing particulars of the change."

  1. We understand it to have been common ground that the "Contract Amendment Form" at page 94 of the bundle applied to all three Respondents and constituted a section 4 statement. Subsequent to its issue, its meaning became disputed. The sequence of events is set out at paragraphs 29 to 33 above. Southern Cross refused to recognise that the Respondents were entitled to longer holidays than other employees because they had been awarded a long service entitlement. The Southern Cross position, as set out in the subsequent memoranda and as upheld by its internal grievance grievance procedure, was that the five days long service holiday entitlement had been merged into the statutory entitlement. The Respondents disagreed. Thus, as it seems to us, a question arose under section 11(2)(b) "as to the particulars which ought to have been included".
  1. We reject Mr Sonaike's submission that because the amendment can be said, in one (and, we think, very limited) sense to comply with section 1(4)(d) of ERA because it sets out the entitlement to holidays, no question arises as to the amendment. That the particulars might not supply the information accurately and thus require amendment or substitution is suggested by the use in section 11(2)(a) of the word "purporting" and, contrary to Mr Sonaike's argument that the limited remedies under section 12, which does not provide for declaratory relief, as such, militate against section 11(2) being concerned with substantive alteration, we find the fact that the Employment Tribunal can confirm, amend or substitute to be of considerable significance. The Employment Tribunal has been empowered by the statute to correct and replace particulars, which do not meet the requirements of section 1.
  1. In our judgment such alteration is not to be confined to particulars which do not satisfy the requirements of section 1 in terms of giving the details required. Mr Sonaike's argument ignores the fact the particulars required by section 1 are to be of the "terms and conditions". Those must be "terms and conditions" in the contract of employment. It cannot be compliance with section 1 to set out as particulars matters which do not accurately record those terms and conditions. For that reason, it seems to us inevitable that employment tribunals will be called on to construe contracts of employment when adjudicating on the issues raised by questions arising in the context of section 11(2) of ERA. As we have endeavoured to explain, we take the view that the statutory language supports that interpretation.
  1. But Ms Ling went further; the provision of particulars has a relatively antique origin so far as employment law is concerned. It can be traced back to the Contracts of Employment Act 1963. That was the start of Parliament establishing a comprehensive regime for employment matters to be litigated in employment tribunals. So Ms Ling submitted that the purpose of the legislation would be frustrated by employment tribunals being precluded from adjudicating on these sorts of issues and requiring them to be litigated in the County Court. We agree.
  1. So far as the construction point is concerned, both parties invoked the famous passage from Lord Hoffman's speech in Investors Compensations Scheme Ltd v West Bromwich Building Society [1998] 1 W.L.R. 896 (pages 912F to 913F). But it seems to us that the issue here is a rather narrow one, not calling for consideration of such general principle. Ms Ling's main argument was that, despite slight semantic differences, on a proper construction all the contractual documents bore the same meaning, namely that the long service holiday entitlement was agreed to be additional to other holiday entitlement. In what she described as an alternative argument based on paragraph 29 of the judgment of Mummery LJ in Power v Regent Security Services Ltd she suggested that the amendment of July 2006 could be regarded as an additional right. In our judgment, however, what faced the Employment Tribunal was a straightforward matter of contractual construction. What falls to be considered is the wording of the July 2006 amendment. This is what the Employment Tribunal focussed its attention on and we think it was right to do so.
  1. Ultimately the issues were whether the text of that amendment was intended by the parties to confer the long service holiday entitlement as an addition to whatever other provision was being made. If that was the intention of the parties, then the Employment Tribunal had to decide whether the rubric clearly achieved that objective; if it did then, in terms of section 12(2) of ERA), the Employment Tribunal should confirm the particulars; if it did not then the Employment Tribunal should amend the particulars or substitute other particulars.
  1. Mr Sonaike submitted that the words "This is frozen and protected" related to the whole of the preceding sentence so that what was being protected was a 25 day entitlement. The Employment Tribunal regarded "this" as applying to the immediately preceding long service entitlement and arrived at the conclusion that the parties intended to keep the long service entitlement as separate from and additional to whatever other entitlement there might be. The additional character of the long service entitlement derived from the use of the word "plus".
  1. Ms Ling supported that construction and we agree with her that the Employment Tribunal have adopted the correct construction. It seems to us that the critical factor is the use of the singular "this". In order for Mr Sonaike's construction to be correct the plural "these" would have to be used.
  1. Therefore we have reached the conclusion that the Employment Tribunal was able to reformulate the Respondents' complaints, had the statutory jurisdiction provided by section 11 of ERA so as to enable it to consider those complaints and was correct in construing the contractual material as providing for the preservation in the case of the three Respondents of an additional holiday entitlement. Whilst it might have been better if the Employment Tribunal had expressed its decision in terms of sections 11 and 12 of ERA rather than in the rather declaratory way in which the judgment is couched at page 1 of the bundle, we have no doubt that implicit in the judgment is confirmation that the answer to the question raised as to these particulars was that the amendment did express the entitlement to a further five days in addition to any other holiday entitlement. Consequently the appeal will be dismissed.

Published: 28/04/2010 11:45

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