The Court of Appeal has confirmed that, except in relation to breach of contract claims that are raised on or after the termination of employment, the Employment Tribunal does not have the power of contractual interpretation and cannot construe contractual terms under Part I of the Employment Rights Act 1996.

In this instance, the claimants were entitled to five days’ holiday per annum in addition to their standard yearly allowance, in recognition of their long service with the appellant employer. When the minimum statutory annual leave allowance was increased under the Working Time Regulations 1998, the appellant responded by bringing holiday allowances in line with the minimum 28 statutory days for all employees. The claimants brought proceedings in the Employment Tribunal (ET) on the basis that they should continue to receive the long-service reward of five extra days, in addition to the statutory minimum of 28 days. They were successful in the ET and in the Employment Appeal Tribunal (EAT).

The Court of Appeal, however, overturned the EAT’s decision, holding that the claimants could not bring a breach of contract claim in the ET because they were still employed by the appellant company. Were the claimants no longer in the appellant’s employment, the ET could have considered the annual leave provisions in the context of its breach of contract jurisdiction. In this instance, however, the County Court would have been able to award a remedy for breach of contract and this was the proper forum for the claimants to issue their claims.

Southern Cross Healthcare v Perkins and Others