British Airways plc -v- Noble and Forde
Although the Working Time Regulations (WTR) came into force in October 1998, they did not take effect in the air transportation sector until 1 August 2003. These stated, among other things, that workers were entitled to four weeks' paid annual leave.
In British Airways plc -v- Noble and Forde, the Court of Appeal has said that employers just have to ensure that they pay the same for a working week as for a holiday week so that workers are not put off from taking their holiday.
What were the basic facts?
Mr Noble and Ms Forde (both shift workers) were entitled to 34 days annual paid leave. Up until the introduction of the WTR, their holiday pay had been calculated using an agreement reached with the unions many years before.
Clause 16 stated that total shift pay was calculated by multiplying the shift pay for each pattern by an agreed average payment. This was then divided by the number of weeks in that pattern, multiplied by 48 and divided by 52 to produce a weekly sum that was then paid regularly throughout the year.
That meant that staff got 48 weeks’ pay over a 52 week period, and did not get shift pay when they were on holiday.
What was the problem?
Mr Noble and Ms Forde argued that BA's method of calculation did not comply with their entitlement to be paid under the WTR “at the rate of a week’s pay in respect of each week of leave.”
They said that by using the multiplier 48/52, BA was able to reduce the amount of the shift element in the holiday pay. They wanted it for 52 weeks a year, not just 48.
BA argued that it had complied with its statutory obligations by paying the same amount of weekly salary all year round in accordance with the regulations and using the multiplier 48/52 as stated in the collective agreements.
What did the tribunals decide?
The employment tribunal upheld the claim, saying that because they did not get paid for shifts that were not worked, BA could not argue that the shift pay element of holiday pay was made “in respect of” the annual leave week in which it was received.
The employment appeal tribunal (EAT) also found in favour of the claimants by applying the approach laid down in the rolled up holiday pay cases. It said that BA had underpaid holiday pay because it did not pay for shifts during four weeks out of 52.
What did the Court of Appeal decide?
The Court of Appeal found in favour of BA. It said that the “reduction” or discount in shift pay was not the result of BA misapplying the regulations or the collective agreements. All it had done was to apply the formula for calculating the consolidated rate.
It highlighted the differences between the issues in this case and those in the “rolled up holiday pay” cases of Robinson Steele -v- RD Retails Services Ltd (LELR 111), in which the European Court of Justice was just looking at whether there had been a “true addition” to the contractual rate of pay that related to holidays.
The “rolled up holiday pay” arrangements were not, therefore, relevant to this case. BA had simply paid the same amount of shift pay for identified holiday periods as well as for work. That complied with the requirements of the regulations.
It said that Mr Noble and Ms Forde were asking for enhanced shift pay for the holiday period, compared to the shift pay they got when at work, which was not required by the regulations. The employer just had to make sure that they were no worse off when they were on holiday, as opposed to being at work, which is what BA had done.