Tribunal Erred in Holiday Pay Dispute: NHS Trust Faces Re-Hearing
A healthcare assistant's holiday pay claim against Surrey and Sussex Healthcare NHS Trust will be re-examined after a successful appeal.
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NHS Trust Holiday Pay Case Heads Back to Tribunal
A recent Employment Appeal Tribunal (EAT) decision has overturned an earlier ruling, meaning Surrey and Sussex Healthcare NHS Trust will face a re-hearing concerning a holiday pay dispute. The case, Miss Ann Palmer v Surrey and Sussex Healthcare NHS Trust, centred on whether the Employment Tribunal was wrong to strike out a claim for holiday pay.
Miss Ann Palmer, a healthcare assistant on a zero-hour contract, initially filed a claim that included a complaint about unpaid holiday pay. Her employment terms, outlined in a 2019 letter, stated an hourly rate plus a "Working Time Directive of 12.5%" payment. However, this payment's specific relation to holiday pay became a key point of contention.
Rolled-Up Holiday Pay Under Scrutiny
The initial Employment Tribunal struck out the holiday pay complaint, citing a practice of "rolled-up holiday pay" (where holiday pay is included in the hourly rate). The tribunal referenced previous cases, such as Robinson-Steele v R D Retail Services Ltd, which addressed the legality of such arrangements. However, the EAT found that the Employment Tribunal's decision was flawed.
His Honour Judge James Tayler, presiding over the EAT, highlighted that the original tribunal hadn't sufficiently analysed the circumstances surrounding the "WTD pay" arrangement. The judge noted the letter of October 2019 was "vague" and didn't clarify whether the 12.5% payment was explicitly for holiday pay. A crucial aspect that required careful consideration was if the arrangement was truly transparent and comprehensible to the claimant, placing the burden of proof on the employer to demonstrate this.
Impact of Harpur Trust v Brazel
Furthermore, the EAT acknowledged the significance of the Supreme Court's decision in Harpur Trust v Brazel. Even if the "WTD pay" could be considered rolled-up holiday pay, the respondent accepted the original calculations needed to be revised in light of this judgement.
What Happens Next?
As a result of the successful appeal, the case has been remitted to a different Employment Tribunal for a fresh determination. The EAT emphasised the importance of ensuring the claimant has confidence in a complete and unbiased review of her claim. It's now up to the NHS Trust to decide whether to pursue another strike-out application or proceed directly to a full hearing on the merits of the holiday pay complaint.
The EAT's judgement underscores the importance of clear and transparent communication regarding holiday pay arrangements, particularly for workers on zero-hour contracts. It serves as a reminder to employers that even seemingly established practices, such as rolled-up holiday pay, are subject to legal scrutiny and must be demonstrably fair and understandable.
Read the entire judgement here: Miss Ann Palmer v Surrey and Sussex Healthcare NHS Trust [2025] EAT 172
