Holiday Pay- The Latest Judgement from the CJEU

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Kathleen Greenfield worked for Care Bureau. In the first half of 2012 she worked one day a week. In July she took seven days paid holiday which exhausted (and exceeded) her statutory entitlement for the holiday year.

In August Kathleen increased her hours to work twelve days on, two days off.  In November she asked for a week’s paid holiday and was refused because she’d used up her entitlement.  She subsequently left her job and took action in the Employment Tribunal for payment in lieu of accrued holiday. The Tribunal allowed the claim. Care Bureau appealed.

The appeal was stayed while the tribunal asked the CJEU if the Framework Agreement on Part Time Work (6 June 1997) and the Working Time Directive 2003/88/EC mean that a worker’s holiday entitlement must be recalculated retroactively if she increases her hours. If so, does recalculation relate only to the period of increased working or to the whole holiday year?

The key elements of the Court’s decision are:

  1. holiday accrues in the context of the working pattern specified in the contract and calculated in days, hours or fractions thereof;
  2. there is no connection between holiday taken after it has accumulated and hours worked in a later period; so
  3.  one must distinguish periods in which there are different working patterns therefore a different accumulation of holiday. However one cannot apply this principle to accumulated leave after the event therefore;

 “In the event of an increase in the number of hours of work performed by a worker, the Member States are not obliged to provide that the entitlement to paid annual leave already accrued, and possibly taken, must be recalculated retroactively according to that worker's new work pattern. A new calculation must, however, be performed for the period during which working time increased".

So flexible (as in flexible working) really does mean supple, pliable or something which can bend without breaking. Contractual flexibility will be one of the gold standards against which employers will be measured by 2020. It won't matter whether the Working Time Directive still holds sway or has disappeared from our scene in a puff of Brexit. It starts with an ethos which must permeate the contract; and as we know, contracts are serious legal agreements with important implications - that’s where I’m always happy to help.