This on demand webinar examines what has evolved to be a complex area of employment law: holiday pay and annual leave entitlements. This recorded webinar begins by setting out the European and domestic rights for annual leave and pay afforded to employees, before delving into the complexities which have arisen. This webinar analyses the more recent appellate court’s decisions and attempts to identify the opportunities for Claimants and Respondents (employees and employers) to argue for a wider interpretation or try to restrict the cases to their facts. In essence, the outcome of the session will be to seek to identify the risks to employers facing holiday pay claims including claims for historical underpayments. This webinar investigates what arguments employers can run in employment tribunals to escape liability for such claims and identifies what steps can be taken from an early stage to protect the business interest. You can view the full webinar at the end of the slide deck and if you would like to view more on demand webinars or attend the live Shorebird RPO events, please visit http://www.shorebird-rpo.com/free-webinars

1. Holiday Pay – Pushing the Legal Boundaries
By: Adam Willoughby
On: 24th November 2015 @ 13:00
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2. Housekeeping
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4. Sun, Sea, and
a Series of
Deductions
Adam Willoughby

5. Content
• Review of the statutory provisions
• Domestic interpretation
• Williams & Lock
• Bear Scotland
• Poking the Bear
• The future

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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”.

12. 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?

13. 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”.

14. 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.

15. 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.”

16. 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.

17. 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

18. Questions?
Adam Willoughby
Broadway House
Chambers
awilloughby@broadwayhouse.co.uk
0113 246 2600

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