Holiday pay and Working time - Case law updates

In the case British Airways PLC v Ms T De Mello and Others when the claim arose British Airways Cabin Crew received numerous allowances, in addition to basic pay, payable under various circumstances. The dispute focused on which allowances should be included in statutory holiday pay, particularly according to EU Law principles. 

British Airways provided a fixed meal allowance to cabin crew to simplify expense management, with both parties agreeing that this allowance exceeded the actual cost of meals. The tribunal determined that the meal allowance, or a portion of it, should be considered as normal pay for holiday purposes, as it was directly related. The Employment Appeal Tribunal (EAT) ruled that the meal allowance given to cabin crew may need to be included in the calculation of statutory holiday pay. The EAT stated that payments closely linked to job duties must be considered in holiday pay calculations, whereas those meant for incidental expenses should be excluded.

This decision outlines the approach to determining what constitutes normal pay, especially when there is a question of whether an allowance should be considered a performance payment and part of normal pay, or an expense payment and excluded from normal pay. It also examines the current legal stance on the concept of a “series” of deductions, in light of the Supreme Court decision in Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33; [2024] ICR 51.

If you need support in understanding which payments should be included within the calculation for holiday pay, we can advise and complete calculations where required