The Enterprise Investment Scheme: What tax reliefs are available?
In his latest article, experienced Corporate & Commercial Solicitor Paul Longland answers your questions on EIS tax relief.
Was it less favourable treatment to pay a part-time worker 50% of full pay for being on duty 53.5% of full time hours? Yes, held the Court of Appeal in British Airways v Pinaud.
Mrs Pinaud worked a part-time contract of 14 days on and 14 days off. She had to be available to work 130 days each year. A comparable full-time worker would have been on duty for six days and off for three, which amounted to 243 available days a year. Mrs Pinaud therefore had to be available for 53.5% of the days of a full-time worker, but she received only 50% of the pay. BA said Mrs Pinaud actually worked fewer days than her comparator.
Less favourable treatment
The tribunal found less favourable treatment of a part-time worker due to the need to be available for work. It held the treatment was not justified as BA could have increased pay to 53.5% of the full-time worker.
The EAT allowed BA's appeal on justification, finding that statistical analysis of the impact of being available needed to be considered before deciding whether an increase in pay would have been out of proportion. BA appealed the finding of less favourable treatment to the Court of Appeal.
Justification
The Court of Appeal rejected the appeal, holding that a requirement to be available for 53.5% of the number of days in return for 50% of the pay was prima facie less favourable treatment of a part-time worker. The case has now been remitted to the tribunal to consider the justification defence and, if that is rejected, remedy. Bean LJ said "it would be a very surprising conclusion" to award compensation of 3.5% salary for the period of loss claimed if the tribunal accepted Mrs Pinaud worked fewer days than her comparator.
The outcome of this case will determine 628 similar stayed cabin crew claims against BA.
Paul Burton, Head of Frettens’ Employment Team comments “While BA may ultimately succeed in defending this case, due to the particular circumstances surrounding Mrs Pinaud’s working hours, this case is a reminder to employers that they do need to be aware of making sure the terms and conditions for part-time workers are no less favourable than their full-time equivalents”.
At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 Paul will be happy to discuss it with you.
