EAT provides guidance on Agnew

In British Airways Plc v De Mello & Ors [2024] EAT 53, the EAT considered the correct approach in determining whether an allowance was genuinely and exclusively intended to cover costs so as not to be included in calculations of holiday pay, as well as the application of the Supreme Court’s decision in Chief Constable of the Police Service of Northern Ireland v Agnew [2023] UKSC 33, [2024] ICR 51.

The case considered holiday pay claims in relation to numerous flying allowances paid by British Airways to cabin crew. The ET had concluded that meal allowances were normal pay and so fell to be included in the calculation of holiday pay. HHJ Auerbach allowed the appeal by British Airways holding that the ET had erred in its approach by treating expense payments as an excluded sub-category of payments intrinsically linked to the performance of duties and placing the burden of proof on British Airways to prove that the meal allowances fell within what it regarded as an “exclusion”.

The EAT also allowed the Claimants’ appeal against the ET’s decision to follow Bear Scotland v Fulton [2015] ICR 221 in holding that any gap of three months or more between deductions would necessarily break a “series of deductions” for the purposes of s.23(3) of the Employment Rights Act 1996 in light of the subsequent decision in Agnew. The EAT went on to substitute a finding that the deductions in respect of different allowances were “sufficiently similar” to form part of a “series” as they had come about because of a failure to factor in one or more allowances that should have counted towards normal pay. The question of whether there was a sufficient temporal connection between deductions remains to be determined by the ET. The ET had also erred in concluding that British Airways had designated the first tranche of leave in each year as statutory leave. Accordingly, all leave days were to be treated equally as part of a composite whole.

Talia Barsam acted for British Airways plc (instructed by Harrison Clark Rickerbys). The judgment can be accessed here

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