Holiday Pay

In Williams v British Airways, the CJEU considered whether pilots' holiday pay entitlement should be limited to basic salary.

Facts

Under collective agreements incorporated into their contracts, British Airways pilots were entitled to basic pay plus two supplementary payments (a "flying pay supplement" and a "time away from base allowance"). However, in periods of statutory annual leave the pilots were only paid basic pay. The pilots claimed that the two supplements should have been included in their holiday pay calculation and brought claims in the Employment Tribunal.

Legal issues

The UK Supreme Court had to consider the underlying European instruments and how these had been implemented into UK domestic law.

The first instrument to consider was the Working Time Directive (WTD). Article 7 of the WTD gives workers the right to paid annual leave but does not specify how holiday pay should be calculated; that is left to national legislation or practice. Article 14 then goes on to state that the WTD does not apply where other EU instruments contain more specific working time requirements for certain occupations. In this case, the pilots were covered by a specific aviation Directive, which, like the WTD, did not specify how workers' pay should be calculated while they are on annual leave.

Consequently, in order to address the claims brought by the pilots seeking holiday payments in respect of flight and other supplements over and above their basic pay, the Supreme Court had to refer a number of questions to the CJEU. These questions focussed on the extent European law defined or laid down requirements as to the nature and/ or level of the payments required to be made in respect of periods of paid annual leave, and to what, if any, extent Member States may determine how such payments are to be calculated.

The CJEU responded by stating that, in line with the annual leave provisions of the WTD, the aviation Directive requires that airline pilots are entitled not only to basic salary but to "normal remuneration" during statutory annual leave. Its reasoning was as follows:

The WTD and the aviation Directive are both concerned with the organisation of working time in the interest of workers' health and safety. The principles developed in case law on the annual leave provisions of the WTD apply also to the equivalent provisions in the aviation Directive. Emphasis was therefore placed on the decision in Robinson-Steele v RD Retail Service Ltd, where...