Part-time Workers and Time Off in Lieu of Bank Holidays - Court of Session decision breaks with established DTI guidelines

On 30 March 2007, in the case McMenemy v Capita Business Services, the Inner House of the Court of Session (Scotland's equivalent of the Court of Appeal) ruled that a part-time employee who did not work on Mondays and was not allowed time off in lieu of Monday bank holidays, was not treated less favourably than full-time employees who, if they worked on Mondays, were given the day off on Monday bank holidays. The reason for the different treatment was because the part-time employee did not work on a Monday, not because the employee worked part-time.

The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 state: "A part-time worker has the right not to be treated by his employer less favourably than the employer treats a comparable full-time worker (a) as regards the terms of his contract, or (b) by being subjected to any other detriment by any act, or deliberate failure to act, of his employer."

The Directive on part-time work, from which the UK Regulations derive, states: "In respect of employment conditions, part-time workers shall not be treated in a less favourable manner than comparable full-time workers solely because they work part time unless different treatment is justified on objective grounds."

The Court of Session noted a significant difference between the Directive and the Regulations, namely the use of the word "solely". The less favourable treatment of part-time workers which is prohibited by the Directive must be for the reason that they work part-time and for that reason alone.

Where appropriate, in order to determine whether less favourable treatment has occurred, the "pro-rata principle" may be applied. This states that "where a comparable full-time worker receives or is entitled to receive pay or any other benefit, a part-time worker is to receive or be entitled to receive not less than the proportion of that pay or other benefit that the number of his weekly hours bears to the number of weekly hours of the comparable full-time worker". This means, for example, that, if a full-time worker working 40 hours a week were entitled to 200 hours holiday in a year (i.e. 5 weeks), a worker with the same type of contract and working 20 hours a week would be treated less favourably if given only 80 hours holiday in a year (i.e. 4 weeks).

Mr. McMenemy worked at Capita's call centre in Glasgow and changed from working full-time, Monday to Friday, to part-time, Wednesday to Friday. Capita's employment contract states specifically that employees are entitled to public holidays only where they fall on an employee's normal working day. There was no comparable full-time employee at the time the case was considered although, previously, the same rule had been applied to Mr. McMeneny's full-time line manager who worked Tuesday to Saturday for a while.

Therefore, the issue that was addressed by the Employment Tribunal and subsequently by the Employment Appeal Tribunal (EAT) was whether Mr. McMenemy was treated less favourably than a comparable full-time worker and, if so, whether that was for the reason that he worked part-time and for that reason alone.

In ruling against Mr. McMenemy, the Employment Tribunal saw the distinction not as between full-time and part-time workers but between those who work Mondays and those who do not, whether or not they are full-time. The tribunal was satisfied that a comparable full-time employee, if there had been one, would not have had the benefit of public holidays.

The EAT was satisfied that the Tribunal's decision was one that they were entitled to reach on the evidence. Although a comparison had been drawn with a hypothetical employee, that was appropriate when considering the reason for the treatment. It was open to the EAT to conclude that a full-time employee who did not work on Mondays would have been treated the same as the claimant as regards Monday holidays.

The EAT also held that the Regulations do not provide an independent right to "pro-rata" entitlement to holidays. The "pro-rata principle" is used to determine whether less favourable treatment has occurred but is not significant in deciding whether or not the reason for less favourable treatment is because the employee was a part-time worker.

The Court of Session, in explaining why it was upholding the decisions of both the Employment Tribunal and the EAT, confirmed that the proper comparators were the full-time employees in Mr. McMenemy's team and that, by comparison with them, he receive less favourable treatment in respect of Monday bank holidays (although not in respect of bank holidays that fall on the days he worked). At this point the "pro-rata principle" would come into play if it were necessary to show that there had been less favourable treatment. If Mr. McMenemy had received a "pro-rata" amount of time off in lieu of Monday bank holidays, he would not have been less favourably treated.

The next issue, however, was whether the less favourable treatment was solely because Mr. McMenemy was a part-time worker. The reason why he received less favourable treatment was through the accident of his having agreed with the respondents that he would not work for them on Mondays or Tuesdays. At this point it becomes appropriate to consider the hypothetical full-time employee and it was clear that Capita's policy was that full-time employees who do not work on Mondays would not get time off in lieu and that part-time employees who do work Mondays would get Monday bank holidays off.

The Court of Session's decision does, however, leave one issue unresolved. Mr. McMenemy's legal representative made reference to the DTI guidance on the part-time workers Regulations. It says:

"The rights of part-timers in relation to public holidays and bank holidays may not always be clear.

Under the regulations, part-timers should not be treated less favourably than comparable full-timers in their entitlement to public/bank holidays. Allowing full-timers the day off, but not part-timers, is clearly less favourable treatment and unlawful under the regulations unless there is objective justification.

To comply with the law, an employer must treat part-time workers as favourably as they treat full time workers. In some circumstances it may be enough simply to give workers a paid day off if their day of work happens to coincide with the public holiday, without giving time off in lieu to those who would not ordinarily work on that day. This may produce a fair result, for example where a shift system means that full-time and part-time workers are equally likely to be scheduled to work on a public holiday. However, where workers work fixed days each week, such a practice could put part-timers at a disadvantage. For example, because most bank and public holidays fall on a Monday, those who do not work Mondays will be entitled to proportionately fewer days off. In many workplaces, these workers will predominantly be part-timers.

In such cases, it may be necessary to remove the disadvantage suffered by those staff who do not receive particular days off as a result of their particular working pattern, for example by giving all workers a pro rata entitlement of days off in lieu according to the number of hours they work.

Whether either of these approaches meets the requirements of the regulations will depend on the particular circumstances. Whatever approach they choose to adopt, employers should bear in mind the principal that it is unlawful to treat part-timers less favourably than comparable full-timers unless there is objective justification for doing so.

Employers or part-timers who are unsure how the law should be implemented in a particular situation should seek legal advice."

The Court of Session did not comment on the apparent contradiction between its ruling and the DTI guidance. Capita's legal counsel argued that "the DTI Guidance, which was expressed in qualified terms by use of the words �could' and �may', was not a useful guide."

Employers seeking to rely on the Court of Session decision - which does not automatically apply outside of Scotland - should consider carefully whether

the specific circumstances of this case are to be found in their employment contracts, namely that entitlement to time off for public holidays only applies to employees for whom the day on which the public holiday falls is a normal working day, and

it can be shown that, in practice, any full-time employee not working on the public holiday would also not be entitled to time off in lieu.

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