HOLIDAY PAY19th Apr 2012
Two recent cases have had profound implications for employers in respect of holiday pay. Neil Andrews, explains.
In Commissioners of Inland Revenue v Ainsworth & Ors, the House of Lords made reference to the European Court of Justice, who say that workers who were off sick for all or part of the year could not be excluded from the right to payment of unused leave.
In another case in Spain, Pereda v Madrid Movilidadse, the ECJ considered the issue from a slightly different angle, and held that a worker on annual leave who fell sick during that holiday leave, could take sick leave instead and take the lost annual leave at a different time.
The key problem that the UK Courts have faced is that our own Working Time Regulations specify that the basic four weeks' annual leave may only be taken in the leave year in which it is due. There is therefore no express provision to carry over leave into a new leave year.
An Employment Tribunal, however, has recently held that the Working Time Regulations can be interpreted in accordance with the ECJ's decision in Pereda in a case in West Yorkshire. The Tribunal found in Shah v First West Yorkshire Limited that an employer's refusal to allow Mr Shah to retake his holiday, which was ruined by a broken ankle, in a new year's leave, was unreasonable. The Tribunal decided that the real question was, whether or not to allow the employee to take the leave in the following year, was compatible with the underlying thrust of the legislation, even though it was not expressly clear. They decided that it was.
Employment Tribunal Judgments are not binding on other Tribunals, and it remains to be seen whether or not this decision will in fact be appealed. However, Neil recommends employers err on the side of caution until clarification from the courts is received, and check contractual provisions that may be in place in order to prepare for situations where employees return and look to take full accrued, but untaken, annual leave.
As always please feel free to contact Neil Andrews for further information or with any employment queries on 01202 673011.