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The Holiday Pay Saga Continues: Flowers and others v East of England Ambulance Trust

Document Cited authorities 3 Cited in Related
Vincent
Pages100-103
Author
DOI10.3366/elr.2019.0529
Date01 January 2019
Published date01 January 2019
INTRODUCTION

In British Airways plc v Williams 1 and Lock v British Gas Trading Ltd.,2 the Court of Justice of the European Union (“CJEU”) handed down two far-reaching judgments concerning the content and calculation of the pay packages that workers are entitled to receive during their annual leave in terms of regulation 16(1) of the Working Time Regulations 1998 (“WTR”)3 and article 7 of the Working Time Directive (“WTD”).4 It was held that the sums paid to workers during their annual leave must correspond to their “normal remuneration”. In these two decisions, this meant that each of the following counted as “normal remuneration”: (a) variable flight supplement payments paid to pilots in addition to their fixed annual salary and (b) sales-based commission payments. That was notwithstanding that during their annual leave periods, the workers concerned had not (a) flown any aeroplanes or (b) earned any commissions on sales for their employers. Subsequent decisions in a slew of domestic cases built on this European jurisprudence to rule that (i) compulsory non-guaranteed overtime,5 (ii) voluntary overtime undertaken by the worker over a sufficient period of time on a regular and/or recurring basis to the extent that it had become an indefinite element of the worker's pay package,6 and (iii) travel time payments,7 should all be included in workers’ pay packets during their annual leave and treated as “normal remuneration”. What this means is that employers must carefully analyse the terms and conditions of employment of their workers to identify the various elements of their pay package. The fact that certain payments are additional to the fixed basic pay of their workers and/or are variable in their operation does not enable employers to ignore or discount them for the purposes of calculating the pay to which workers are entitled when they are on annual leave. Moreover, Willetts also ruled that the regular continuity of payments in respect of workplace practices – such as payments for voluntary overtime – may crystallize over time into sums counting as normal remuneration.

These decisions may seem unfair to employers. After all, workers would appear to be earning a windfall without having tendered due consideration in return, since they are by definition, on holiday. However, the key justification given by the CJEU for this line of jurisprudence is a strong one, i.e. that there should be no impediments to workers actually taking their annual leave...

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