Holiday Pay - Pushing the Legal Boundaries
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Transcript of Holiday Pay - Pushing the Legal Boundaries
Holiday Pay – Pushing the Legal Boundaries By: Adam Willoughby On: 24th November 2015 @ 13:00
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Sun, Sea, and a Series of Deductions Adam Willoughby
Content
• Review of the statutory provisions
• Domestic interpretation
• Williams & Lock
• Bear Scotland
• Poking the Bear
• The future
The Starting Point
• Article 7 – Working Time Directive
• Rationale – Health & Safety
• Working Time Regulations 1998, Regs 13 and 13A
• “Euro Leave” – 4 weeks’ leave
• “Domestic Leave” – 1.6 weeks’ leave
Paid Leave
• The right to paid leave
• WTR, Reg 16
• Right to a “weeks’ pay” (not defined by Art 7)
• Defined by reference to Employment Rights Act 1996, ss.221-224
• What all the fuss is about
Weeks’ Pay – Concept of Normal Working Hours
• Normal working hours? (s.234 ERA 1996)
• No normal working hours = averaging method
• Normal working hours – is there a variation in remuneration owing to when work is done or how much work is done?
• Variation = use an average
• No variation = what is payable under the contract
The Domestic Position (pre-Williams/Lock/Bear)
• Overtime not normal working hours unless required by contract
• OVERTIME • Bamsey [2004] EWCA Civ 359
• Employer not obliged to offer o/t
• CA = o/t did not counT
• COMMISSION • Evans v. Malley Orgn [2002] EWCA Civ 1834
• Commission such that remuneration did not vary with amount of work done
• Did not count
Williams v British Airways
• Civil Aviation (Working Time) Regulations 2004 • Holiday pay specified but no calculation • Disapplies ERA
• Should receive “normal remuneration”
• “comparable to periods of work”
• “to all the components intrinsically linked to the performance of the tasks which he is required to carry out under his contract of employment and in respect of which a monetary amount, included in the calculation of his total remuneration, is provided and, second, to all the elements relating to his personal and professional status as an airline pilot”
• Problem with Williams
Lock v. British Gas
• Is the pay “intrinsically linked”? – is the payment directly linked to the performance of tasks required to be carried out under the contract?
• Commission, in that case, met that test
• Does not matter that commission paid during employee’s holiday – opportunity to earn affected
• “...remuneration must be maintained and that, in other words, workers must receive their normal remuneration for that period of rest”.
Run up to Bear
• Neal v Freightliner • Voluntary overtime
• Interest
• Conjoined appeals
• Core Question: Does Article 7 require overtime be taken into account when calculating holiday pay?
Implications of Bear
• Non-guaranteed, compulsory overtime should be taken into account
• Guaranteed/non-guaranteed overtime which is voluntary (employee can refuse) not expressly dealt with
• Indications in respect of purely voluntary overtime
• Fitting with Bamsey
• read the following words into regulation 16(3)(d) WTR: “(d) as if the references to section 227 and 228 did not apply and, in the case of the entitlement under regulation 13, sections 223(3) and 234 do not apply”.
Implications of Bear
• Regulation 13/13A difference
• Enforcement under WTR
• Enforcement under ERA
• What is a “series of deductions”
• There must be: • A sufficient similarity of subject matter such that each event is
factually linked with the next in the same way as it is linked with its predecessor; and
• A sufficient frequency of repetition.
Limitation
• 3 month limitation period – a policy driven ruling
• How far back can one claim if the series is unbroken? • 1998
• 6 years
• Deduction from Wages (Limitation) Regulations 2014
• inserts into the ERA two new sub-sections into section 23. The intended effect is to limit claims to two years ending with the date that the claim is presented.
• The amendment applies to “any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise.”
The Future
• What has not been considered? • Series/limitation
• Truly voluntary overtime
• Interest
• Lock 8-9th December • commission and non-guaranteed overtime are dealt with under
different provisions and use different language, and the employment tribunal incorrectly concluded that Bear Scotland, a case about overtime, has any bearing on the outcome of Lock; and
• in any event, the EAT in Bear Scotland incorrectly concluded that UK domestic legislation can be interpreted purposively to give effect to EU law.
Interim Measures
• EASYJET
• Audits
• Do not sit back and do nothing – clear direction of travel
• Be aware of group litigation claims • Cost effective
• Slow
• Little choice – policy established at local level by REJs
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