The Supreme Court has ruled that UK aviation working time regulations can be interpreted to comply with the ECJ’s decision that holiday pay should reflect normal remuneration, ie pay intrinsically linked to the performance of contractual tasks (in this case including flight pay supplements and possibly some part of base allowances).

The decision brings into question whether the “week’s pay” regime for calculating holiday pay under the Working Time Regulations 1998 (WTR), applicable to employers in other industries, is consistent with the requirement for a worker to receive “normal remuneration” as interpreted by the ECJ, in particular the WTR exclusion of certain commission payments, overtime or discretionary bonuses.

Employers should bear in mind the possibility of a challenge where holiday pay calculated under the WTR is significantly less than usual take home pay.  Public sector workers might be able to enforce EU law directly, whereas private sector claimants would have the more difficult task of establishing that the WTR can be construed consistently. (BA v Williams, SC)