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Holiday pay: a case worth fighting for

by John Moore Head of Industrial Relations

Legal proceedings often have a habit of taking their time to reach conclusion and the case on Holiday Pay, first raised by BALPA in 2006, has been no different. Since then we have put over £35million back-pay into members’ pockets and improved individual holiday pay entitlement for the future.

When the Civil Aviation Working Time Regulations (CAWTR) were introduced in 2004 no UK airline implemented the important provision that when taking their four weeks’ leave pilots should receive their normal pay, based on an average of the pay that they received while working. (The statute only allows for four weeks to be taken into account.) BA, Virgin and other airlines continued to pay only basic pay to pilots when taking their leave. BALPA argued that, under these regulations, the definition of holiday pay should not be restricted to basic salary only, particularly because pilots' and cabin crews' actual pay is based heavily on an hourly flying pay rate.

BALPA first took a test legal case against British Airways (BA v Williams) before an Employment Tribunal in 2007, which found in favour of the claimants. That case then went through a succession of UK courts, with BA immediately appealing, but the Employment Appeal Tribunal also found in favour of the claimants and rejected the appeal. The airline appealed again in April 2009, to the Court of Appeal, and this time the appeal was upheld. BALPA then appealed to the Supreme Court which in March 2010 referred the case to the European Court of Justice and the UK Supreme Court for an interpretation of the Civil Aviation (Working Time) Regulations. In October 2012 both the CJEU and the Supreme Court found in BALPA’s favour, in other words, that when taking four weeks annual leave pilots should be paid a rate that is commensurate with periods of work.

Case of British Airways v Williams and ors
May 2007 Case first brought and Employment Tribunal finds in favour of the claimants, Williams and ors
Feb 2008 BA appeals to Employment Appeals Tribunal which finds in favour of the claimants and rejects the appeal
April 2009 BA appeals to the Court of Appeal which upholds their appeal
March 2010 BALPA, for the claimants, appeals to the Supreme Court which refers the case to the European Court of Justice
April 2011 Hearing at the European Court of Justice scheduled for 14 April
October 2012 European Court of Justice

Speaking after the court victory in 2012, Jim McAuslan, BALPA General Secretary, said, “This was a major victory for all pilots in the UK. The calculation of holiday pay was a clear example of pilots being short-changed by their employers. We always believed that under European working time rules introduced in 2004 pilots should be treated like other working people in the UK and should receive their proper pay during holidays. This should not be restricted to basic salary but should include allowances.”

Since the judgement we have reached agreement on holiday pay settlements in nearly all companies. Although each negotiation took different forms and some were more protracted than others, all cases ended with members being consulted and accepting the proposed offers put to them by their pilot representatives. Right across the board our members have benefitted from significant sums in settlement from their airline. BALPA pilots have received back-payments of holiday pay ranging between £1,000 and £13,000 per pilot and we have of course improved their entitlements for the future.

This was certainly a case worth fighting for. It was a landmark case and there were setbacks along the way. It was sent to almost every court in the UK and Europe and involved a substantial outlay in terms of legal costs.  Although we recouped the costs directly related to the hearings in the UK and Luxembourg, the Association committed around £1million in settling all the other holiday pay claims. Despite successive appeals from those airlines involved, the association never wavered in the search for justice on behalf of members. It is why we have built reserves to fund such cases. The victory showed employers that we are prepared to go all the way and have the resources to fight such challenging cases involving complex law. But it also shows the time that it can take to secure a legal solution and why negotiated settlements – if possible – are BALPA’s preferred way.