Working Time Regulations – Supreme Court refers pilots’ claim for higher holiday pay the European Court of JusticeThursday, April 1st, 2010
On 3 April 2009, the Court of Appeal overturned the decisions by both an employment tribunal and the Employment Appeal Tribunal in the case British Airways Plc v Williams & Others, ruling that there is no requirement for the holiday pay of aircraft pilots to be calculated according to the statutory “week’s pay” rules.
The Court of Appeal ruled that, as there are no provisions in UK Regulations defining the calculation of holiday pay for workers in civil aviation, British Airways has no statutory obligation to do any more than pay holiday pay as provided for in the pilots’ service agreements. The Court also declined to refer the issues to the European Court of Justice. However, the British Airline Pilots Association (BALPA) later announced that it was considering an appeal.
The appeal against the Court of Appeal’s decision was subsequently heard by the UK Supreme Court and its decision was published on 24 March 2010. After reviewing the relevant domestic and European legislation applicable to paid annual leave, the Supreme Court decided to refer the following questions to the European Court of Justice (ECJ):
- Under [the relevant European Directives](1) to what, if any, extent does European law define or lay down any requirements as to the nature and/or level of the payments required to be made in respect of periods of paid annual leave; and (2) to what, if any, extent may Member States determine how such payments are to be calculated?
- In particular, is it sufficient that, under national law and/or practice and/or under the collective agreements and/or contractual arrangements negotiated between employers and workers, the payment made enables and encourages the worker to take and to enjoy, in the fullest sense of these words, his or her annual leave; and does not involve any sensible risk that the worker will not do so?
- Or is it required that the pay should either (a) correspond precisely with or (b) be broadly comparable to
the worker’s “normal” pay?
Further, in the event of an affirmative answer to question (iii)(a) or (b):
- Is the relevant measure or comparison (a) pay that the worker would have earned during the particular leave period if he or she had been working, instead of on leave, or (b) pay which he or she was earning during some other, and if so what, period when he or she was working?
- How should “normal” or “comparable” pay be assessed in circumstances where (a) a worker’s remuneration while working is supplemented if and to the extent that he or she engages in a particular activity; (b) where there is an annual or other limit on the extent to which, or time during which, the worker may engage in that activity, and that limit has been already exceeded or almost exceeded at the time(s) when annual leave is taken, so that the worker would not in fact have been permitted to engage in that activity had he been working, instead of on leave?
The UK’s Working Time Regulations (WTR) require payment for annual leave to be paid at the rate of “a week’s pay”, as defined in employment law. The civil aviation equivalent of the WTR does not contain that requirement. The questions posed by the Supreme Court are not restricted in their relevance to workers in civil aviation, however. They question both the existence of the “week’s pay” rules and their approach to setting an appropriate level of pay during annual leave. As a result, the future rulings of the ECJ could affect all UK employers. Any resulting review of the complex and outdated “week’s pay” rules would be welcome.
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