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Tribunal orders Tesco to reimburse employee for underpayment of frozen holidays

Thompsons NI has secured a significant tribunal victory for an Usdaw member who works for Tesco.

Union member, Carole Ritchie, started working for Stewarts Supermarkets, which operated throughout Northern Ireland, in 1988. The company was taken over by Tesco in May 1997, and as a result, Mrs Richie’s employment transferred to Tesco.

Tesco had a different holiday system from Stewarts Supermarkets. When the Stewarts employees transferred, their accrued holidays were frozen by Tesco and their holiday entitlement was calculated under the scheme run by their new employer.

When Tesco froze the accrued holidays, it told the employees that they would not lose out as only the actual days accrued were frozen and not the cash value. Tesco told the employees that when they ultimately left their employment, they would be paid for their frozen holidays as part of their final wage – this was at the rate of pay that applied when they left.

In November 2017, Tesco began a process of transferring weekly paid staff onto four-weekly pay. To assist employees with this transition, Tesco gave those staff with frozen holidays the opportunity to ‘cash-in’ up to two weeks of their accrued entitlement.

Mrs Ritchie decided to take up this offer and to ‘defrost’ two weeks of her frozen holidays. However, by this time she was working 24 hours per week rather than the 39 hours that she had been working when her employment transferred to Tesco. Tesco paid Mrs Richie £385.00 for two weeks’ pay, which was based on her working week of 24 hours per week rather than a working week of 39 hours.

Mrs Richie queried the calculation with her managers but was told that she had been paid correctly. It was then that the union member got in touch with her union, Usdaw, who ultimately referred her case to Thompsons NI solicitors.

Thompsons NI solicitors represented Mrs Ritchie at a tribunal hearing, which took place in Belfast on 20 February 2019. A written decision has since been issued.

The tribunal decided that Mrs Ritchie had suffered an unauthorised deduction from her wages and that she was entitled to receive two weeks’ pay based on the 39 hours per week she worked when the frozen holidays were accrued. The tribunal’s written decision said:

The tribunal is unanimously satisfied that the terms and conditions document, in stating that the claimant would not “lose out”, means that she would not be financially disadvantaged. In assessing how such a disadvantage could be avoided by the respondent, the tribunal concluded that paying her for fewer hours than she had worked to earn her Stewarts’ days off was not credible. She had fulfilled her contract with Stewarts and was accordingly credited with the relevant days off.

The tribunal concluded that the clear and natural meaning of the wording of the relevant portion of the terms and conditions document given by the respondent was, on its face, intended to reassure Stewarts’ staff.

Such reassurance addressed any reasonable and natural concerns of its new employees that the imposed inability to take their accrued days off might later be further aggravated by a reduction in their contemporary value, relative to the time worked to earn them.

It additionally is considered by the tribunal to be highly unlikely that anyone to whom such method of calculation was at the outset clearly explained would agree to be paid only for part of each day, rather than for the full day worked. If there was any potential ambiguity, it is not apparent in the wording used at the relevant time.

The tribunal panel awarded Mrs Ritchie £240.60 to cover the shortfall in the payment she received for the two weeks frozen holidays that she had ‘cashed in’.

Paddy Lillis, Usdaw’s general secretary, said: “Day in day out Usdaw provides its members with the support, advice and representation they need when problems occur at work. On the vast majority of occasions, we resolve matters through our network of dedicated, trained and supported volunteer workplace reps; we also resolve many matters through collective negotiation, but occasionally we have to resort to an employment tribunal. That is when our members benefit from experienced and skilled employment lawyers such as Thompsons NI, who ensure the member is expertly represented for no additional fee than their weekly union subscription.

"With even more employers engaging legal representation at tribunal, it is crucial for justice that there is an ‘equality of arms’ and for the vast majority of working people, that is only affordable by being a member of a trade union. I am delighted that we and Thompsons NI secured the outcome that Mrs Ritchie sought and deserved.”

Following the Tribunal panel’s decision, Mrs Ritchie said: “I would like to thank Usdaw and Thompsons NI for their expert assistance and hard work they dedicated to my case. Whilst the sum of money involved is relatively small, there was an important principle at stake. I accrued my frozen holidays when I was working 39 hours per week and I strongly believed that I should have been paid for them on that basis. Thankfully the tribunal panel agreed with me”.

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