Citation Codes
Equivalent Citations
citation codes
Attorney(S)
- Appellant Jane McNeill QC Michael Ford (Instructed by Thompsons Solicitors)
- Respondent Christopher Jeans QC Andrew Short QC (Instructed by Baker and Mackenzie LLP)
- Appellant Jane McNeill QC Michael Ford (Instructed by Thompsons Solicitors)
- Respondent Christopher Jeans QC Andrew Short (Instructed by Baker and Mackenzie LLP)
Judges
- LORD CLARKE
- LADY HALE
- LORD MANCE
- LORD WALKER
- LORD BROWN
See more information ...
Click here to read the full judgment
British Airways plc v. Williams & Ors
Smart Summary
Factual and Procedural Background
Company A employs commercial pilots whose terms of work and remuneration are governed by a collective Memorandum of Agreement negotiated with The Union. In addition to a fixed annual salary, pilots receive two variable supplements: a Flying Pay Supplement (FPS) linked to hours flown and a Time Away From Base allowance (TAFB) linked to hours spent away from base.
The Civil Aviation (Working Time) Regulations 2004 (“the Aviation Regulations”) implement EU Directive 2000/79/EC and afford crew members at least four weeks of paid annual leave. The Regulations, unlike other working-time regimes, contain no formula for calculating a “week’s pay.” The parties disagreed on whether pilots’ holiday pay should include FPS and part of TAFB.
Earlier proceedings reached the Supreme Court, which on 24 March 2010 referred five interpretative questions to the Court of Justice of the European Union (CJEU). On 15 September 2011 the CJEU held that paid annual leave must reflect (a) basic salary, (b) remuneration components “intrinsically linked” to the tasks under the contract, and (c) elements related to the worker’s personal and professional status. Components covering purely occasional or ancillary costs may be excluded. The present judgment determines the domestic consequences of that ruling.
Legal Issues Presented
- Whether the Aviation Regulations, though silent on calculation methodology, effectively implement the Directive so as to confer an enforceable right to holiday pay reflecting “normal” remuneration.
- Whether the Employment Tribunal has jurisdiction to identify a “representative reference period” and quantify holiday pay in the absence of statutory guidance.
- Whether TAFB (in whole or in part) forms part of “normal remuneration” for the purpose of annual leave.
Arguments of the Parties
Appellants’ Arguments
- The CJEU decision requires inclusion of basic pay, FPS and at least 18 % of TAFB when calculating paid leave.
- The proper course is to remit each claim to the Employment Tribunal so it can identify a representative reference period and quantify the sums due.
Company A’s Arguments
- The Aviation Regulations are too indeterminate to transpose the Directive; without further legislation they cannot oblige employers to pay more than basic salary.
- Legal certainty and principles against expanding criminal liability prevent courts from “reading in” a calculation method.
- TAFB is intended exclusively to cover expenses incurred while away from base and should therefore be excluded entirely.
- Regulation 18 of the Aviation Regulations confers no power on tribunals to award compensation for under-payment of holiday pay.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|
| British Airways plc v Williams (Case C-155/10) [2012] ICR 847 | Components of remuneration to be included in paid annual leave | Primary authority guiding the domestic court’s analysis on holiday pay composition |
| Parviainen v Finnair Oyj (Case C-471/08) [2011] ICR 99 | Maintenance of pay elements linked to professional status | Cited to illustrate mandatory inclusion of status-related allowances |
| Gassmayr v Bundesminister (Case C-194/08) | Application of Parviainen reasoning to pregnancy leave | Reinforces breadth of pay elements to be maintained |
| Dominguez v Centre Informatique (Case C-282/10) | Direct effect of Article 7 of the Working Time Directive against the State | Used to rebut certainty objections; demonstrates clarity of Directive obligations |
| Marleasing SA v La Comercial Internacional (Case C-106/89) | Duty of conforming interpretation | Supports reading domestic rules in line with Directive aims |
| Pfeiffer v Deutsches Rotes Kreuz (Joined Cases C-397-403/01) | Scope of interpretative obligation | Applied to justify tribunal’s role in filling legislative gaps |
| Kolpinghuis Nijmegen BV (Case 80/86) | Limits of interpretation where criminal liability may be extended | Company A invoked; court distinguished |
| Arcaro (Case C-168/95) | Same principle as Kolpinghuis | Company A invoked; court distinguished |
| Tarmac Roadstone Holdings Ltd v Peacock [1973] ICR 273 | Meaning of “normal working hours” in pay calculations | Cited for context on Employment Rights Act methodology |
| Bamsey v Albon Engineering [2004] ICR 1083 | Application of Employment Rights Act sections to holiday pay | Referenced to contrast with aviation regime lacking those sections |
| United Kingdom v Council (Case C-84/94) | Health and safety purpose of Working Time legislation | Forms backdrop for interpreting objectives of holiday pay |
| R (BECTU) v Secretary of State (Case C-173/99) | Non-derogability of right to paid leave | Limits Member States’ discretion in implementing conditions |
| Robinson-Steele v RD Retail Services (Cases C-131 & C-257/04) | Holiday pay must place worker in a remuneration position comparable to work periods | Informative but distinguished on facts |
| Stringer v Revenue and Customs (Case C-520/06) | Entitlement to paid leave during long-term sickness | Cited for “comparable remuneration” language |
| Seda Kücükdeveci v Swedex (Case C-555/07) | Extent of national courts’ interpretative duty | Supports conforming interpretation approach |
Court's Reasoning and Analysis
Judge [Lead] held that the Aviation Regulations, although silent on calculation mechanics, deliberately mirror the Directive’s wording and therefore must be construed in the same spirit. The Court rejected Company A’s submission that legal uncertainty prevented domestic enforcement, noting that:
- The CJEU deemed Article 7 sufficiently precise to have direct effect against Member States; identical domestic language can therefore guide tribunals.
- Any indeterminacy is cured by allowing employers to nominate a representative reference period; failing that, tribunals may select one within reasonable parameters.
- Regulation 18 empowers tribunals to award compensation where an employer “refuses to permit” exercise of the right to paid leave, which encompasses under-payment.
- Concerns about extending criminal liability under analogous maritime regulations are speculative and do not override civil enforcement under the Aviation Regulations.
On TAFB, the Court concluded that whether the allowance (or a proportion of it) is “intended exclusively to cover costs” (and thus excludable) is a factual issue. The existing record was insufficient for determination, and the Employment Tribunal must examine the genuine purpose of the payments.
Holding and Implications
HOLDING: The appeals succeed to the extent that the matter is remitted to the Employment Tribunal for determination of (a) an appropriate representative reference period and (b) which elements of remuneration, including any portion of TAFB, must be included in holiday pay.
Implications: Pilots may recover additional holiday pay beyond basic salary, subject to tribunal findings. Employers must proactively identify a representative calculation period or risk tribunal-imposed figures. No new precedent is set on the precise percentage of TAFB to be included, but the judgment confirms tribunals’ competence to quantify holiday pay absent explicit statutory formulae.
Click here to read the full judgment