Transcription

• Speaker #0

  Today in the Lefebvre HR and Employment Law podcast, we're discussing the judgment in the case of Palanki and the Big Table Group Limited in which an employment tribunal was asked to decide whether tips paid via a tronc should also be considered when calculating a worker's holiday pay. In this case, an employee who worked in a front of house role in a restaurant brought a claim for unpaid wages. Under his employment contract, the employee is paid on an hourly basis and the restaurant operates a 12.5% discretionary service charge on all bills. The money collected via these service charges is pooled then shared among the restaurant staff via a Tronc, a system in which tips are pooled and shared out between staff. These monthly Tronc payments are paid from the employer's bank account at the same time as the employee's wages and are listed separately on the payslip. The restaurant's general manager is the Tronc Master. and therefore responsible for the operation of the trunk and sharing those tips among staff, although the restaurant staff decide the method of trunk allocation from time to time. When the employee took annual leave, his holiday pay was based on his basic pay, and he was ineligible to receive the equivalent trunk payment. In 2022, the employee raised an internal grievance, arguing that the calculation of his holiday pay was incorrect because no account had been taken of the trunk payments. After the employer rejected his grievance and confirmed that holiday pay was based on basic pay only, he brought claims challenging this. The Employment Tribunal upheld the employee's claims for unpaid holiday pay and unlawful deduction from wages. The Tribunal firstly held that, when read together, the references to the tronc in the employment contract and within the tronc terms and conditions provide a contractual entitlement to receive whatever tronc payment the tronc policy provided. as the individual's tips allocation within any given week. Secondly, considering the fact trunk payments are paid via the employer's payroll and are recorded on payslips, the Tribunal went on to conclude that the trunk payments were payable by the employer. Finally, the Tribunal held that the trunk payments the employee receives are intrinsically linked to the performance of tasks he is required to carry out under his employment contract, and therefore, in light of earlier case law, and following the amendments to the working time regulations which were made last year, so after the dispute in this case arose, they formed part of his normal pay and ought to be included in the calculation of his holiday pay for the first four weeks of annual leave each year. The tribunal noted that if the trunk payments were not included in his holiday pay, the employee would lose as much as 50% of his normal remuneration during that period and that this would act as a deterrent from taking annual leave. While employment tribunal decisions are not binding on future tribunals, the decision is likely to be persuasive in disputes sharing similar facts. Additionally, it seems likely that, depending on the individual circumstances, trunk payments may be found to be intrinsically linked to the performance of a worker's contractual tasks and or regularly paid in the 52 weeks preceding the calculation date. In some cases, they may also take account of seniority or length of service. Look out for further episodes in this series to stay up to date on all things HR and employment law related.