Payment of Holiday Pay – What is included in an employee’s ‘normal remuneration’?

Should employees receive only their basic wage when taking annual leave, or should they also be paid performance related bonus/additional supplements that they would be paid but for their annual leave?

It was ruled in the recent case of British Airways plc V Williams and Others (No 2) it was held that payments, that are an intrinsic part of the employees contract of employment, should be paid to employees during annual leave. Therefore any bonuses or additional payments that are in the employees contract, remain payable during annual leave.
The case also went further to state that ‘normal remuneration’ will also include payments that are intrinsically linked to the employee performing their contractual duties.

Published: 26 Nov 2012


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