Equal Pay : Ainsworth and others v Revenue and Customs Comrs

Ainsworth and others v Revenue and Customs Comrs: [2009] UKHL 31: 10 June 2009

HL(E): Lord Hope of Craighead, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood and Lord Neuberger of Abbotsbury

Five employees who had been absent from work over a long period during which their entitlement to any pay had been exhausted presented claims under regulation 30 of the Working Time Regulations 1998 for payment of statutory holiday pay in respect of an entitlement under regulation 13 or, where the employees' employment had terminated, regulation 14.

One employee also claimed the non-payment of holiday pay as an unlawful deduction of wages pursuant to sections 13 and 23 of the Employment Rights Act 1996.

The claims were upheld by employment tribunals, and the Employment Appeal Tribunal dismissed appeals by the employer.

The Court of Appeal allowed a further appeal by the employer, and, on an appeal by the employees, the House of Lords referred two questions to the European Court of Justice.

The Grand Chamber answered those questions in terms favourable to the employees. The appeals were restored for hearing, it being agreed between the parties that the appeals should be allowed, the only remaining issue in dispute being, in the case of the one employee, whether a claim based on an alleged failure to make payments due under the 1998 Regulations could be brought by way of a claim for unauthorised
deduction from wages under Part II of the 1996 Act.

The House of Lords held:

The definition of "wages" in section 27(1) of the Employment Rights Act 1996 was sufficiently wide to be capable of referring to a payment due under Regulations made after the passing of the Act. Claims for
payment in respect of periods of annual leave under regulation 16 of the Working Time Regulations 1998 and claims for payment in lieu of leave on termination of employment under regulation 14 were claims for "holiday pay" within section 27(1)(a) of the 1996 Act. Accordingly, the employee had been entitled to complain under section 23 of the Act of unlawful deduction from wages in contravention of section 13. That conclusion was supported by the Community law principle of equivalence, since payments due under regulations 14 and 16 were similar to the many other types of payments covered by section 27(1) and, accordingly, if they did not fall within section 27(1) and thus benefit from its more favourable limitation period than that in regulation 30, the principle would be infringed and the United Kingdom Government would be in breach of its obligations under the EC Treaty.

The appeals were allowed.