The claimants were cleaners who, over the period of 3 months, were employed by 3 separate companies. The tribunal held that ‘service provision changes’ (SPC), within the meaning of the SPC (POE) Regs (NI) 2006, took place firstly in March 2014 (as the claimants were dismissed then immediately hired by another company) and again in May 2014 to their eventual employer ‘OFM’. The main issue was whether, in relation to accrued holiday leave, the Department or OFM had responsibility for crediting the claimants with the relevant untaken leave. However, in this case the transferor was in administration and thus a modified version of Art 277 ERO (NI) 1996 which contains the conditions for entitlement to holiday pay applied.

For the Department to be liable the claimant must, inter alia, have been entitled to be holiday pay on the ‘appropriate date’ which is when the employer actually went into administration. However, the claimants were never effectively dismissed since they received their letters of dismissal after the SPC had taken place. Therefore, the relevant holiday leave entitlements were never converted into holiday pay entitlements. The Company, OFM, was held to be responsible for the untaken leave entitlement.

Practical Lessons

In SPC situations, holiday leave entitlement may well become the responsibility of the transferee employer. However, close attention should be paid to the date of administration as holiday pay debt will not be the responsibility of the Department if the employee isn’t technically entitled to the sum on that date. The tribunal referred to the issue of whether the previous leave entitlement’ ‘crystallised’, and transferees will want to ensure they have clarity as to who exactly is liable in respect of any employee’s holiday pay entitlement.