BA holiday pay dispute heads to Supreme Court
The long running legal challenge by British Airways’ (“BA”) pilots against the airline reached an important milestone in September 2011, with the ECJ confirming that pilots’ statutory holiday pay should not be limited to basic salary only.
BA pilots had the terms of a collective agreement incorporated into their contract which, in addition to their basic pay, gave them two supplementary payments: one for time spent flying, and one for time spent away from their home base. When the pilots took statutory annual leave, however, BA paid them for basic pay only. The pilots claim they are entitled to have the two supplementary payments included in their statutory holiday pay calculation.
The ECJ has held that the Aviation Directive, under which the pilots brought their claim, should be read in line with the annual leave provision of the Working Time Directive, meaning that the pilots are entitled to “normal remuneration” during periods of annual leave.
What does “normal remuneration” mean?
The ECJ stated that “normal remuneration” should be remuneration that is intrinsically linked to the performance of tasks that a worker is contractually required to perform. In the case of pilots, this would include additional payments for time spent flying. The ECJ also held that “normal remuneration” includes remuneration relating to a pilots’ personal and professional status. The UK courts will now need to determine what “normal remuneration” covers in relation to the pilots to enable airlines to correctly calculate holiday pay in the future.
The ECJ confirmed that “normal remuneration” does not include payments which are made to cover occasional or ancillary costs which occur when an employee performs their contractual duties, eg costs connected with time pilots have to spend away from base.
The Supreme Court will now decide on what components of pilots’ remuneration should be included in the statutory holiday pay calculation.
Until the Supreme Court has made its decision, pilots (or any other worker that may be affected by the ECJ ruling) cannot make a claim under the Employment Rights Act 1996 for unlawful deductions from wages as the UK court will not have made a determination that such deductions were properly payable as holiday pay components. A claim under the Working Time Regulations 1998 does however remain possible provided this is made within three months of each incorrect holiday payment. However it is likely there will be no further claims issues until the Supreme Court judgment is issued.
This case will be of obvious interest to the aviation industry, but the impact of the forthcoming Supreme Court ruling will extend to workers within the travel industry whose pay is split between basic and supplemental sums if the supplemental sums are not covered in their holiday pay.
If you would like to discuss the impact of this case, or if you would like any further information, please contact Rebecca Thornley-Gibson on 01293 603621 or by e-mail at Rebecca.firstname.lastname@example.org.
Published: 21 Dec 2011