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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Berta v. Hummus Brothers Ltd [2008] UKEAT 0184_08_1107 (11 July 2008) URL: http://www.bailii.org/uk/cases/UKEAT/2008/0184_08_1107.html Cite as: [2008] UKEAT 184_8_1107, [2008] UKEAT 0184_08_1107

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APPEARANCES

 

For the Appellant	MR M HARAN (Solicitor)
For the Respondent	No appearance or representation by or on behalf of the Respondent


 


SUMMARY

Working Time Regulations: Holiday pay

Unlawful Deduction from Wages

Practice and Procedure: Postponement or stay

The Employment Tribunal declined to stay a holiday pay claim made under Part II of the ERA (because it would have been out of time if made under WTR) until the House of Lords decided CIR v Ainsworth. The reason was that they doubted whether the issue as to whether such a claim could be made by that route, as opposed to the sick pay/holiday pay issue, was before the House of Lords. Held, on the employer's unopposed appeal, that the former issue was before the House of Lords (albeit not referred to the European Court of Justice), that if the ET had been aware that was so they would have been bound to have granted a stay, which was much more consistent with the overriding objective, and that the claim should be remitted to the ET for them to impose a stay.

HIS HONOUR JUDGE BURKE

1. This is an appeal against part of a decision of the Employment Tribunal sitting at London Central, chaired by Employment Judge Grewal and sent with reasons to the parties on 5 December 2007.
2. The Appellant, Mr Berta, has been represented before us by Mr Haran. The Respondents are not present and are not represented. They (or to be more accurate an organisation called Employment Law Advocates Ltd) have written a letter to the Tribunal saying this:

"I am writing to consent to the Notice of Appeal for the aforementioned case. There will be no opposition of this appeal."

3. As is well known, the fact that a Respondent is willing to consent to the allowing of an appeal does not lead to the allowing of that appeal automatically. It is necessary for the Appellant to demonstrate to the Employment Appeal Tribunal that the decision of the Employment Tribunal against which the appeal is brought was in error of law.
4. However, the approach adopted on behalf of the employers is important for another reason. It has emerged (because Mr Haran on behalf of Mr Berta has drawn our attention to it) that there is some relatively slight professional acquaintance between one of the members of this Appeal Tribunal, Mr Edwards, and Mr Haran. Mr Edwards works for the Royal College of Nursing and Mr Haran has on an agency basis, from time to time, done likewise; and that has led to their meeting on one or two occasions in a professional capacity.
5. Having considered this problem we have come to the conclusion that it is not necessary for Mr Edwards to recuse himself. The fact that the Respondents do not object to the appeal being allowed is important in that view which we have taken.
6. Pragmatically, if Mr Edwards were to recuse himself it would mean that this unopposed appeal would have to be adjourned. That is not in the best interests of the parties. It is not in line with the overriding objective. The position appears to us, as we will explain shortly, to be so clear that there is no possibility that Mr Edwards could be said or thought to have in any way affected the decision which we are about to set out by any such slight acquaintance as that that we have described.
7. The Claimant, Mr Berta, was employed by the Respondents, Hummus Brothers Ltd, whom we shall call "Hummus", as a waiter in a restaurant in Soho, London from February 2006 to 24 March 2007. He claimed that he was owed two weeks and two days holiday money for a holiday taken in March 2007, before his employment terminated.
8. That claim was made plainly within time under Regulation 30 of the Working Time Regulations 1998.
9. He also claims that he was owed two weeks pay in respect of a holiday taken in September 2006. He did not seek to claim that sum under the Working Time Regulations because such a claim would have been outside the time limit which those regulations prescribe. Instead he claimed it under Part II of the Employment Rights Act 1996 as a wrongful deduction from his wages.
10. Hummus's primary response was that Mr Berta received "rolled-up" holiday pay included in his hourly rate of pay and, therefore, nothing was due. The Employment Tribunal rejected that response, applying recent decisions of the European Court of Justice and of the Employment Appeal Tribunal. They therefore awarded Mr Berta the sum of £684.33 in respect of the March 2007 holiday period, to which they added a further two weeks pay because of Hummus's failure to provide a Contract of Employment or a Statement of Terms and Conditions of Employment, as required by section 1 of the 1996 Act.
11. So far as the earlier period was concerned, the question arose whether a claim for unpaid holiday pay, which could be made, if put forward in time, under Regulation 30 of the Working Time Regulations, could also be made as an unlawful deduction under Part II of the 1996 Act. If it could, then, if Mr Berta could show that there had been a series of deductions ending with the deduction in relation to the holiday in March 2007, the three month time limit would run from the last of the series of deductions; and the claim to holiday pay for 2006 would be in time; whereas under the Working Time Regulations it would have been out of time.
12. In Commissioners of Inland Revenue v Ainsworth [2005] IRLR 465 the Court of Appeal held that such a claim could not be made, outside the time limit of the Working Time Regulations, under Part II of the 1996 Act. However, Mr Haran, at the hearing before the Tribunal, informed the Tribunal that that procedural point, together with the more substantive point in Ainsworth - namely is an employee entitled to full holiday pay during a period of sick leave or only to holiday pay at the level of such sickness pay, if any, to which he was entitled - has been referred to the House of Lords, whose decision is awaited. There has been delay because the House of Lords has referred the substantive point to the European Court of Justice. As at November 2007, when the Tribunal considered this claim, the situation was as I have described.
13. The Advocate General of the European Court of Justice had not then produced his opinion to the European Court. His opinion is now available. He concluded that holiday pay is payable in full during a period of sick leave; but the European Court of Justice's judgment, which may or may not espouse the Advocate General's conclusions, is still awaited. For this reason the appeal has not yet gone back to the House of Lords; and therefore the House of Lords' conclusion on the procedural point is still outstanding, although it can reasonably be expected to appear within the next few months.
14. Because the position was as we have described, save that the Advocate General's opinion was not yet published at the time, Mr Haran invited the Tribunal to stay the 2006 holiday claim until what we have described as the procedural point was resolved by the House of Lords. Of course, the Tribunal were, and are still today, bound by the judgment of the Court of Appeal; but it was open to them to stay the claim as asked, pending the decision of the House of Lords.
15. The Tribunal decided not to take that course. Their reasons are succinctly expressed in paragraph 13 of their judgment in these terms:

"We next considered the question of whether we should stay proceedings in respect of the claim for September 2006 on the basis that the case of Ainsworth has gone to the House of Lords. It appears that it has done so on the main issue that was in dispute in Ainsworth, namely, whether employees who were on long-term sick leave could claim to be entitled to holiday pay during that period. It is not entirely clear to us whether it has done so on the issue relating to the right to bring claims under Section 13 of ERA 1996 when the claim is based upon the Working Time Regulations 1998. The EAT case that we were referred to on behalf of the Claimant related primarily to the payment of holiday pay in the course of sickness absence and, clearly, in that case it made sense to stay proceedings. In all the circumstances, we are not persuaded that it would be right to stay that part of the claim until the decision of the House of Lords in Ainsworth but we record and we note that the Claimant has raised an argument in respect of that and that he reserves his right to pursue that argument elsewhere."

16. Although the judgment does not expressly so state, it must follow from the Tribunal's rejection of Mr Haran's submission that the 2006 holiday claim should be stayed that it was dismissed.
17. Mr Berta now appeals against the Tribunal's decision to refuse to stay the 2006 holiday pay claim. He submits, through Mr Haran, that the Tribunal did not challenge his assertion that the question whether a claim for holiday pay which could, if put forward in time, be made under the Working Time Regulations could also, after the Working Time Regulations time limit had expired, be made under Part II of the 1996 Act was to be decided by the House of Lords in Ainsworth. The argument proceeded on the basis that that assertion was correct. Mr Haran was taken by surprise by the Tribunal's decision not to grant the stay, which had not been forecast.
18. He tells us that he referred to two authorities. The first is A D Bly Construction Ltd v Cochrane (UKEAT/0243/05) in which the EAT decided that the Claimant was not a worker and therefore the substantive Ainsworth point did not need to be examined. The only purpose for which that case was helpful was that it shows that argument on the Ainsworth point, in that case the substantive point, had been stayed by the Tribunal pending the House of Lords decision.
19. The second authority to which Mr Haran referred is Chief Constable of Strathclyde Police v Lavery EATS/0098/04 in which the EAT in Scotland, Lady Smith sitting alone, allowed the employer's appeal and stayed a claim which gave rise to the substantive issue in Ainsworth, remitting the case to the Employment Tribunal to impose a stay pending the House of Lords' decision.
20. Having read the Employment Tribunal's judgment in this case and Mr Haran's Skeleton Argument, we asked Mr Haran to obtain confirmation that the point now at issue, the procedural point, is indeed to be decided by the House of Lords in Ainsworth. It is not possible to tell that that is indeed so from the Court of Appeal's decision in Ainsworth or from the granting of leave to appeal to the House of Lords in Ainsworth. Mr Haran has satisfied us that the procedural point is, indeed, to be decided by the House of Lords. He has produced to us written confirmation that that is so from counsel instructed in the House of Lords. The procedural point has not been referred to the European Court but is simply outstanding, pending the decision of the European Court on the substantive point. Once that decision is available and the House of Lords consider it, they will then, no doubt, produce their decision on both the substantive and the procedural points.
21. That being so, the doubt or hesitation expressed by the Employment Tribunal in paragraph 13 of their judgment in this case is wholly dispelled. The picture is different from that which the Tribunal believed it to be when they decided to reject Mr Haran's submission that Mr Berta's 2006 holiday pay claim should be stayed.
22. It is to be noted that the Tribunal said that it would have made sense to stay proceedings if the point at issue was the substantive point, which they accepted was to be dealt by the House of Lords in Ainsworth; but they did not stay because it was not clear to them that the procedural point was before the House of Lords. Now we know that it is. Had the Tribunal appreciated that that was so, we have no reason to doubt that they would have granted the stay; and in our judgment they certainly should have granted the stay; for that would have been the only pragmatic course to take.
23. The granting of the stay, in our judgment, is in the circumstances far more consistent with the overriding objective and with the importance of saving costs and time than the alternative, namely dismissing the 2006 holiday pay claim. If that claim stands dismissed and the House of Lords resolves the procedural point by deciding that a claim such as that which Mr Berta seeks to bring can be brought under Part II of the 1996 Act, Mr Berta would have to seek leave from the Employment Appeal Tribunal to appeal out of time and then, if such leave were granted, would have to pursue that appeal.
24. If on the other hand the claim is stayed and the House of Lords resolve the procedural issue in that way the Employment Tribunal can simply, on a written application, remove the stay; and the claim can be dealt with very swiftly by the Employment Tribunal, if not disposed of by agreement, with a minimum of expense, time and fuss and without reference to the Employment Appeal Tribunal.
25. If the House of Lords resolves the issue against the interests of Mr Berta, then Hummus can apply by letter to have the 2006 holiday pay claim struck out without opposition from Mr Bertha or can take no steps, so that the claim will never go forward.
26. Those are, in our judgment, the reasons why, now that the doubt has been cleared up, a stay should be granted and the appeal should be allowed so that the apparent dismissal of the 2006 holiday pay claim is set aside.
27. We take the view that the proper approach is to remit the 2006 holiday claim to the Employment Tribunal with a direction that is should be stayed pending the decision of the House of Lords in CIR v Ainsworth.
28. For the sake of convenience it is not necessary to remit to the same Employment Tribunal, which would then have to be convened for a purely procedural purpose. We would remit to the Employment Tribunal generally, where the stay can be granted by any Employment Judge.