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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Fulton & Anor v. Bear Scotland Ltd [2016] UKEAT 0010_16_0912 (9 December 2016) URL: https://www.bailii.org/uk/cases/UKEAT/2016/0010_16_0912.html Cite as: [2016] UKEAT 0010_16_0912, [2016] UKEAT 10_16_912 |
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At the Tribunal | |
Before
THE HONOURABLE LADY WISE
(SITTING ALONE)
MR DAVID FULTON & MR DOUGLAS BAXTER
APPELLANT | |
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RESPONDENT |
For the Appellants | MR S CHEETHAM (of Counsel) Instructed by: Minster Law Limited Alexander House Hospital Fields Road York North Yorkshire YO10 4DZ |
For the Respondent | MR B NAPIER QC Instructed by : DLA Piper ![]() ![]() Collins House Rutland Square Edinburgh EH1 2AA |
SUMMARY
UNLAWFUL DEDUCTION FROM WAGES - Holiday Pay
JURISDICTIONAL POINTS – Limitation of Time
The claimants had litigated, with some success the issue of the calculation of pay of holiday leave, but an issue arose as to whether some of their claims were time barred, where there had been a series of unlawful deductions but where a period of more than three months had elapsed between those deductions. Following the decision on appeal – Bear
Scotland
Ltd v Fulton and another [2015] ICR 221 – the case was remitted back to the Tribunal to determine the facts necessary to apply the ruling on what constituted a series of deductions for the purposes of section 23 ERA 1996.
Considering itself bound by the EAT decision in the same case, the Tribunal excluded as time barred all claims or parts of claims where a period of more than three months had elapsed between successive non or underpayments of holiday pay. The claimants appealed and sought to argue that the passages in the EAT decision might not be binding or even that they were wrongly decided, but that if they were binding, their effect was to create a strong presumption rather than a binding rule that where the series of deductions is broken by a gap of three months or more the claims is time barred. Other considerations might be brought into play that demanded examination before a decision could be reached.
Decision : None of the limited circumstances in which the EAT would depart from one of its earlier decisions were present. In any event, it was not permissible to seek to use a later appeal in the same case to seek a departure from an earlier decision in the same litigation. The relevant passages in the earlier EAT decision were part of the ratio decidendi and the Tribunal had correctly identified them as binding upon it. There was no room for the interpretation now advanced by the claimants. Decisions on interpretation of different statutory provisions were of no assistance. The material relevant facts had been agreed before the Tribunal and so the circumstances of this case had not required any further enquiry.
There was no identifiable error in the Tribunal's decision.
Appeal dismissed.
THE HONOURABLE LADY WISE
The Tribunal's reasoning
"50. I begin by considering the judgment of the Employment Appeal Tribunal in this case which was heard in a conjoined appeal with two other matters. The parties are diametrically opposed on the relevance ofBear
![]()
Scotland
Ltd v Fulton and Baxter and ors [2015] ICR 121 EAT.
51. The respondent says that the ratio decidendi ofBear
is that a period of more than three months between successive non- or under-payments of holiday pay serves to break the link between those successive non- or –underpayments so as to preclude non- or under-payments occurring prior to that period forming part of a series of non- or under-payments with those occurring after that period.
52. The claimant puts it that the passages relied upon by the respondent are not ratio statements and amount to no more than obiter dicta. Further, it is said that those dicta result from a point that was insufficiently addressed in submissions, with insufficient attention being paid to the interaction between the Directive, the ERA regime and the WTR provisions. It was submitted on behalf of the claimants that I was not bound by the EAT's judgement although counsel for the claimants did not go so far as to submit that the conclusion of the EAT was per incuriam or distinguishable.
53. Counsel for the respondent made a powerful submission in reply addressing the question of whether the EAT identified a principle inBear
that is binding on me.
54. Firstly, it was identified that what was termed the "third issue" arises in the appeals by Hertel and Amec in their respective cases ( see paragraph 14 of the EAT judgement). The EAT noted that this issue arose in this case but that, at first instance, Judge Kearns had left the point for determination at a further hearing ( this hearing is that further hearing). The issue concerned a series of deductions.
55. The "third issue" is discussed in paragraphs 70-83 of the EAT judgment. At paragraph 71, the circumstances giving rise to the issue for determination is identified in this way " it is only if the failure [to pay correctly] forms part of a 'series of deductions' that a claim may validly be brought in respect of it" and, in the following paragraph the issue for determination is identified " This raises the question as to what constitutes a " series of deductions".
56. At paragraph 73, there is consideration of the way the case was put to the Employment Tribunal in Hertel and Amec followed by a discussion of the reasoning of the Employment Judge in paragraphs 75 and 76. The submissions of counsel are then discussed at paragraphs 77 and 78. Thereafter at paragraphs 79 to 83 Langstaff J sets out his conclusions on the issue. Of particular significance are these words "…I consider that Parliament did not intend that jurisdiction could be regained simply because a later non-payment, occurring more than three months later, could be characterised as having such similar features that it formed part of the same series." The reference to jurisdiction being regained is of particular relevance here because, as emerged in the hearing, the claims first presented by the claimant were presented out of time and what the claimants sought to do was to link the deductions to which the original (time-barred) claim related to later deductions so as to regain jurisdiction.
57. Finally, at paragraph 116, this is said "The appeals of Hertel and Amec succeed in resect of the third and fourth issues".
58. I am satisfied that the EAT's reasoning as to the intention of Parliament and set out above was necessary for the disposal of the appeals of Hertel and Amec, the point was argued before the EAT and the respective submissions noted and discussed. The reasoning is part of the ratio decidendi of the case and is binding upon me. It matters not that the " third issue" did not arise in the appeal in this case ; had it done so, the matter would have been determined without today's hearing and the fact that the matter was determined in the Hertel and Amec as part of the same hearing, goes no less to the binding nature of the ratio decidendi as would have been the case had the point been determined in an entirely unrelated appeal. I have no alternative to find that a gap of more than three months between under-payments in respect of Directive leave breaks the series of deductions.
59. An alternative route to bringing within time deductions that were made earlier than the commencement of the primary limitation period is to contend that it was not reasonably practicable to bring proceedings in time and, further, that the claim was presented within such period as was reasonable following the expiry of the primary limitation period. For the reasons set out under the heading " The application of the law to the facts" I was unable to extend time.
60. In paragraph 14 of his skeleton argument, counsel for the claimants submitted " Given this position, it is submitted on behalf of C that any limitation upon the ability to recover sums artificially confined to 3 months is (subject to primary legislation applicable to all claims-as to which see below) incompatible with the rights conferred by the Directive. This is supported by the jurisprudence in this area". The authority relied on was Levez v Jennings ( Harlow Pools) Ltd [1999] IRLR 764 ( per Morison J at 23-24).
61. I am satisfied that, in considering this submission, it would be artificial only to look at the remedy provided by WTR. I reach that conclusion because a non- or under-payment of holiday pay gives rise to a casue of action both under WTR and as an unlawful deduction of wages under ERA.
62. Levez concerned the law of equal pay, as it then was, which limited the retrospective effect of a judgement to the period of two years prior to the presentation of a claim. As appears in paragraph 24 of the EAT judgment, the provisions in respect of unlawful deductions from wages under ERA ( along with discrimination on grounds of race and disability) was set up as a provision which delivered a full remedy in the way in which the Equal Pay Act 1970 did not.
63. Section 23 may be relied upon in respect of non- or under-payments that result from EU law as well as non- or under-payments that result from domestic law. For example, Section 23 may be relied upon in a claim against an employer who fails to pay the sum due under the contract of employment in respect of, say, overtime worked. Payment for such overtime may well also fall to be brought into account in the computation of holiday pay. Both rights fall to be enforced through the provisions of Section 23 ERA and, insofar as both are dependent upon establishing a " series of deductions" both would be subject to the principle in Hertel and Amec.
64. I conclude that the combined effect of WTR and Section 23 ERA does not mean that domestic law is incompatible with the rights conferred by the Directive. "
The Tribunal went on to apply the law to the facts. Having recorded (at paragraph 74) that the claimants had led no evidence to support an argument that it had not been reasonably practicable to present the claims in time, four claims were identified as being potentially time barred. The Judge then stated;-
" 76……I am bound to conclude that the chain linking a series of deductions is broken when there occurs a period of three months or more between successive deductions, it follows that the under-payments occurring prior to the claims in 4112472/12, 41000534/13, 4102156/13 and 4106915/13 cannot be linked as part of a series to any subsequent under-payment as the most recent under-payment was already more than three months old at the date of presentation. Further, there are more than three months separating under-payments in subsequent holiday years."
The judgment goes on to list certain limited deductions and series of deductions that do not fall foul of the general rule by which the Tribunal considered itself bound.
The Claimants' Arguments on Appeal
5. Counsel confirmed that the target of the appeal was the determination to the effect that where there is a gap of more than three months between underpayments, the claimants were precluded from pursuing any claim in respect of such deduction. The Tribunal had heard argument on whether Langstaff J's decision, to the effect that any gap of more than three months between deductions extinguishes the jurisdiction to consider a complaint was part of the ratio of the decision. The Tribunal had decided that it was. Mr Cheetham explored, tentatively, whether the relevant part of Langstaff J's judgment could be regarded as obiter, but he very fairly accepted that it was difficult to sustain such an argument in light of the former EAT President's own views as expressed at the sift stage of this appeal. It was hard to characterise the relevant dicta in the earlier appeal stage of this case as obiter rather than part of the ratio decidendi.
"The provision can therefore cover a case where, as here, the complainant alleges a number of acts of detriment, some inside the three-month period and some outside it. The acts occurring in the three-month period may not be isolated one-off acts, but connected to earlier acts or failures outside the period. "
Mr Cheetham submitted that while of course there had to be a connection, put by Langstaff J in this case in terms of a factual link and a temporal link, the case of Arthur did not support any contention that a temporal connection should be measured against and limited by the primary limitation period. The point was not considered by Langstaff J and Arthur had not been cited to him. Looking at paragraphs 77 and 78 of the EAT judgment, it was also questionable whether the submissions made to Langstaff J had even addressed the approach that he had gone on to adopt.
Discussion
" ..I consider that Parliament did not intend that jurisdiction could be regained simply because a later non-payment, occurring more than three months later, could be characterised as having such similar features that it formed part of the same series. The sense of the legislation is that any series punctuated from the next succeeding series by a gap of more than three months is one in respect of which the passage of time has extinguished the jurisdiction to consider a complaint that it was unpaid."