The High Court has remitted a holiday pay dispute between a lorry driver and First Glass Limited to the Labour Court, finding that the Labour Court had not fully analysed which pay rate was legally “liable to be paid” under the applicable regulations.
Mr Justice Hunt delivered the judgment on 3 October 2016 in an appeal on a point of law under section 28(6) of the Organisation of Working Time Act 1997. The appeal concerned the Labour Court’s rejection of claims for annual leave and public holiday pay. A separate claim concerning notice of starting and finishing times had been allowed by the Labour Court and was not part of the appeal.
The written employment contract, dated 4 December 2005, provided for annual pay of €34,384, equivalent to €668.75 a week. The judgment said the worker was in fact paid €554.48 a week during the relevant period. The Labour Court had treated the lower amount actually paid as the appropriate reference for calculating holiday pay, noting that he appeared to have accepted the adjustment over an extended period.
The High Court held that the Labour Court did not explain the legal basis for concluding that the lower amount, rather than the contractual rate, was the amount liable to be paid. The court said the contractual rate was the starting point, and a lower rate could apply if there had been an enforceable variation, such as by waiver, estoppel or a subsequent or collateral agreement. Acceptance of the lower payments over time, by itself, was not enough to establish that the lower amount was legally due.
The judgment also noted that the worker had not been questioned at the Labour Court hearing about his apparent acceptance of the pay adjustment. The High Court said the Labour Court needed to examine whether the contractual liability had been validly changed and to analyse the meaning of “liable to be paid” under Regulation 2 of the 1997 Regulations.
The court did not rule that the worker was entitled to holiday pay calculated at the higher contractual rate. It said the final result might not change, but the worker was entitled to a full determination before an adverse conclusion. The matter was remitted to the Labour Court for further consideration.