Should a meal allowance have been included in the calculation of statutory holiday pay for cabin crew?
Possibly, held the Employment Appeal Tribunal in De Mello v British Airways Plc. All payments intrinsically linked to the performance of duties need to be included in the calculation of statutory holiday pay. Payments intended to cover occasional or ancillary costs do not.
The Respondent operated a flat rate meal allowance for cabin crew. It aimed to save the burden of handling thousands of receipts a day. Both parties acknowledged that the allowance exceeded the costs incurred. The tribunal concluded that the meal allowance, or a portion of it, should be included in the calculation of normal pay for holiday pay. The payments were ‘intrinsically linked’ to the performance of duties and the Respondent hadn’t been able to show they were intended to cover occasional or ancillary costs.
The EAT held that the tribunal was wrong to place this burden on the Respondent. It was the tribunal’s job to weigh all the relevant facts and circumstances. It had to decide which side of the line the meal allowance fell. It was also not possible to split the payment into two pots: performance-related and expenses. It either fell on one side of the line or the other. This issue was remitted.
The tribunal's decision (which pre-dated Agnew in the Supreme Court) was that any gap of three months or more between deductions would break the chain of causation (Bear Scotland v Fulton). The EAT held that the Supreme Court’s decision in Agnew meant that this conclusion could not stand.
The EAT substituted a finding that the deductions were of ‘sufficient’ similarity to be regarded as a series, as they all related to deductions from holiday pay. The EAT indicated that the consideration of whether there was a sufficient ‘temporal’ link between those same deductions (also required for them to be regarded as a series) would need to be remitted to the tribunal. However, it noted that when looking at the time-gap issue, tribunals should bear in mind that there will always be gaps in time between periods of holiday (and therefore between holiday pay payments).
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