The Employment Tribunal Appeal has handed down judgment in AMEC Group Ltd v Law and related appeals: the holiday pay test cases which Government, the private sector and employment lawyers have been so closely watching. The EAT's key conclusions are as follows:
1. Article 7 of the Working Time Directive requires workers to be paid "normal remuneration" during the holiday to which they are entitled under EU law, i.e., broadly speaking, their typical average pay, not only the basic hours' pay which has long been understood to be the entitlement of workers with normal hours of work under the UK's Working Time Regulations.
2. It is possible to "read down" the domestic Working Time Regulations under the Marleasing principle to achieve compliance with the requirements of Article 7 — potentially giving a very large number of UK workers who have been paid holiday pay representing only their basic hours' work claims for unlawful deductions from wages. On this and the Article 7 issue, the employers' appeals failed.
3. However, the employers' appeals succeeded on a key issue of limitation: the meaning of a "series of deductions" from wages. If there is a gap of more than three months in any alleged series of deductions, the Employment Tribunal loses jurisdiction to hear claims for the earlier deductions. Further, workers are not entitled retrospectively to designate which holiday was "EU" holiday under regulation 13 of the WTR and which was additional domestic leave under regulation 13A so as to create an unbroken "series". The EAT's conclusions may thus severely restrict the ability of workers to bring valuable, retrospective claims for underpaid holiday pay.
Dinah Rose QC and Tom Richards, both of Blackstone Chambers, acted for AMEC and argued the Marleasing and series of deductions issues before the EAT.