Policy News Journal - 2016-17

The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal

13 Entitlement to annual leave … a worker is entitled to four weeks’ annual leave in each leave year… 13A Entitlement to additional annual leave … a worker is entitled in each leave year to a period of additional leave determined in accordance with paragraph (2) The period of additional leave to which a worker is entitled under paragraph (1) is… (e) in any leave year beginning on or after 1 st April 2009, 1.6 weeks… 16 Payment in respect of periods of leave A worker is entitled to be paid in respect of any period of annual leave to which he is entitled under regular 13 and regulation 13A, at the rate of a week’s pay in respect of each week of leave. Sections 221 to 224 of the 1996 Act shall apply for the purpose of determining the amount of a week’s pay for the purposes of this regulation… Section 13 of the Employment Rights Act 1996 (‘ERA’) gives workers the right not to suffer unauthorised deductions from wages. Section 23 ERA gives workers the right to present a complaint about such a deduction to a tribunal (now to be read as giving workers the right to notify ACAS of a dispute) within three months of the deduction or of the last deduction or payment in a series. In British Airways plc v Williams [1] the Supreme Court determined, following a referral to the CJEU that, for the duration of annual leave remuneration must be maintained and that workers must receive their normal remuneration for that period of rest. The purpose of the requirement of payment for that leave is to put the worker, during such leave, in a position which is, as regards remuneration, comparable to periods of work . The Supreme Court quoted the CJEU (at paras 23 and 24) ‘ although the structure of the ordinary remuneration of a worker is determined, as such, by the provisions and practice governed by the law of the Member States, that structure cannot affect the worker’s right … to enjoy, during his period of rest and relaxation, economic conditions which are comparable to those relating to the exercise of his employment. …. Accordingly, any inconvenient aspect which is linked intrinsically to the performance of the tasks which the worker is required to carry out under his contract of employment and in respect of which a monetary amount is provided which is included in the calculation of the worker’s total remuneration, … must necessarily be taken into account for the purposes of the amount to which the worker is entitled during his annual leave’ and ‘ the concept of normal remuneration as a temporal component. Accordingly to the natural meaning of the word, ‘normal’ can only refer to something which has existed as a point of reference for comparison … the expression essentially implies that remuneration which in itself fluctuates at regular intervals is levelled out to an amount representing average earnings ’. In Lock v British Gas [2] , the Employment Tribunal held (after a referral to the CJEU) that the commission earned by Mr Lock must be taken into account when calculating his holiday pay. In Bear Scotland Ltd & Ors v Fulton & Ors [3] , the EAT held that non-guaranteed overtime must be taken into account when calculating the pay to which a worker in entitled during a period of paid annual leave. Langstaff P defined ‘non-guaranteed overtime’ as the situation where there is no obligation on an employer to provide overtime, but if that work is available then the employee is obliged to perform it. He continued: ‘voluntary overtime’ is work which the employer asks an employee to do but which the employee is free of any contractual obligation to perform unless he agrees at the time to do so’. [4] Thus, it has been known for some time now that the first 20 days of annual leave (or regulation 13 leave under the Working Time Regulations) must contain all elements of contractual pay including non-guaranteed overtime. It was not at all clear whether it should also include all elements of non-contractual voluntary pay. In a possible landmark decision of the Birmingham West Employment Tribunal, Employment Judge Warren (Birmingham’s designated Holiday Pay Judge) accepted that for regulation 13 pay, the question was not whether the work was ‘intrinsically linked to the contract’ but whether it had become ‘normal pay’, ie that which is normally received. The Judge referred to the judgment of Langstaff P. (as he then was) in the EAT decision of Bear Scotland in which the Judge said in paragraph 29 ‘ The purpose of the requirement for that leave is to put the worker during such leave, in a position which is, as regards remuneration, comparable to periods of work ’ at paragraph 34 ‘ what was inconvenient in Williams related to what an employee could be required to carry out. The question was not that, but what ‘normal remuneration’ actually was ’ and finally in paragraph 44 ‘ despite the subtlety of many of the arguments, the essential point seem relatively simple to me. Normal pay is that which is normally received ’. Employment Judge Warren went on to find that for the test Claimants in the case the voluntary overtime, standby, call out work and mileage that they had done, had been done for such period and such regularity to become part of their normal work and accordingly part of their normal pay. In the circumstances the Judge ruled that the payment for that work had to be included in the calculation of holiday pay for the first 20 days of annual leave, under regulation 13 of the Working Time Regulations. The 8 additional days’ holiday (essentially the bank holidays) under regulation 13A and any extra purely contractual holiday were based on the contractual work undertaken and thus excluded purely voluntary work, so holiday leave for those remaining days will continue to be calculated as before.

Two recent cases were put before the Employment Judge, although neither were binding on her, as the first was from the Northern Ireland Court of Appeal and the other was a first instance decision of the Employment Judge


Page 82

of 588

Made with FlippingBook - Online magazine maker