MPB Structures Ltd v Munro
| Jurisdiction | Scotland |
| Judgment Date | 01 April 2003 |
| Docket Number | No 38 |
| Date | 01 April 2003 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
Employment law - Holiday pay - Contractual arrangement for holiday pay to be paid in advance as part of hourly rate rather than being paid when holiday was taken - Whether arrangement void - Working Time Regulations 1988 (SI 1988 No 1833) reg 13
Regulation 13 of the Working Time Regulations 1998 (SI 1988 No 1833) provides for a worker's entitlement to leave. Regulation 13(9)(b) provides that holiday leave may not be replaced by a payment in lieu except where the worker's employment is terminated. Regulation 16(5) provides that any contractual remuneration in respect of a period of leave goes towards discharging any liability of the employer to make holiday payments under the regulations; and any payment under the regulations goes towards discharging any liability of the employer to make contractual remuneration in respect of that period. Regulation 35(1) provides that any provision in an agreement is void so far as it purports to exclude or limit any provisions of the regulations.
An employer increased an employee's pay from £8.50 to £10 per hour but provided in the new employment contract for the 'rolling up' of holiday pay, ie para 1.5 of the Terms and Conditions forming part of the employment contract providedinter alia; 'For the avoidance of doubt there is within the rate an 8% allowance for your holiday pay. It is your responsibility to retain such advance payments in order that you are in funds at the time you do take holidays.' This arrangement was adopted by the employer to reduce administrative inconvenience associated with the calculation of weekly pay for the purposes of holiday payments. The employee raised proceedings in the employment tribunal, and it was agreed that the tribunal would deal with the question of whether the above contractual term was void. The employment tribunal held that para 1.5 was contrary to reg 13(9)(b) and void under reg 35(1), and that it was not open to the employer to rely on reg 16(5) so as to set off the allowance against the employee's statutory entitlement. The employer appealed to the Employment Appeal Tribunal, who held that the tribunal had been in error in respect of reg 13(9)(b) but that holiday pay should be paid when the holiday is taken. The employer appealed to the Court of Session. The employer argued that reg 13(9)(b) was not relevant and that the Employment Appeal Tribunal had misread reg 35(1)
Held that: (1) it was essential that payment should be made for annual leave and that it should be made in association with the taking of that leave (p 490A); (2) the arrangement of 'rolling up' the holiday pay was not in accordance with the requirements of the regulations and would have discouraged workers from taking their holidays when they would otherwise have sought to do so, and hence would have conflicted with what the regulations and the directive sought to achieve (p 490C); and (3) the purported exclusion of the operation of reg 16 in the contract was void and the respondent's claim for holiday pay remained unsatisfied (p 490D); and appealrefused.
ALEXANDER MUNRO brought proceedings against M P B Structures Limited in the Employment Tribunal. The tribunal found in his favour and M P B Structures Limited appealed to the Employment Appeal Tribunal. M P B Structures Limited appealed from the Employment Appeal Tribunal to the Court of Session.
Cases referred to:
Gridquest Ltd v BlackburnICR [2002] ICR 1206
R (BECTU) v Secretary of State for Trade and IndustryICR [2001] ICR 1152
Sutherland v Network Appliance LtdUNK [2001] IRLR 12
The cause called before the First Division, comprising the Lord President (Cullen), Lady Cosgrove and Lord Carloway for a hearing on the summar roll.
At advising, on 1 April 2003, the opinion of the Court was delivered by the Lord President (Cullen) -
OPINION OF THE COURT - [1] The Working Time Regulations 1998 ('the Regulations') were intended to implement the Working Time Directive ('the Directive') which entitled workers to paid annual leave. The primary question in this appeal is whether, on a correct interpretation of the Regulations, it is lawful for the employer and the...
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Arturas (Child's Best Interests: Ni Appeals)
...by [2021] NIQB 13 MK (section 55 — tribunal options) Sierra Leone [2015] UKUT 223 (IAC); [2015] JNLR 563 MPB Structures Ltd v Munro 2003 SC 485; 2003 SLT 551; 2003 SCLR 542; [2004] 2 CMLR 44; [2003] IRLR 350 OA and Others (human rights; ‘new matter’; s. 120) Nigeria [2019] UKUT 65 (IAC); [2......
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Clarke v Frank Staddon Ltd, Marshalls Clay Products Ltd v Caulfield
...I think it really comes to the same thing) must be paid at the time when, or immediately before or after, the holiday is taken. MPB STRUCTURES Ltd v MUNRO [2003] IRLR 350 28 Munro is the decision of the First Division of the Inner House of the Court of Session to which I referred above at p......
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