Case law: Employers welcome clarification of worker's entitlement to annual leave when worker's hours change
Employers will welcome clarification from the European Court of Justice (ECJ) on how to calculate a worker's entitlement to annual leave if their working pattern changes during a holiday year.
This update was published in Legal Alert - December 2015
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A part-time employee worked variable hours. During a period in which she was working one day a week she took seven days' paid leave, however, her employer told her she had exhausted her entitlement to paid leave by doing so.
However, during the same holiday year her hours changed to 12 days on and two days off each fortnight. When her employment terminated she claimed payment for untaken annual leave. There was a dispute over how a worker's entitlement to annual leave should be calculated in such circumstances and the issue went to the ECJ.
The ECJ ruled that entitlement to annual leave is to be worked out by reference to the worker's contractual working pattern. If a worker's working pattern changed during a holiday year, so that there were different periods within the holiday year during which the hours or days worked by the worker were different – their entitlement to annual leave should be calculated separately for each period.
This meant that an employer with a worker who worked one day per week in one period and then 12 in every fourteen in another period should make a separate calculation of the worker's entitlement to annual leave for each of those periods. The employer should not recalculate entitlement retrospectively on every change in working pattern.
The ECJ also said that if, in one period, a worker took leave which exceeded their entitlement to annual leave for that period, the excess could be deducted from the worker's entitlement as calculated for any subsequent period in which the worker worked increased hours.
These rules applied both during employment and after it has terminated.
The ruling is consistent with existing law that states that a change from full-time to part-time working should not reduce the entitlement to leave a worker has already accumulated before the change.
- Employers calculating the annual leave entitlement of an employee who works a particular set of days or hours for one period, but who then changes to a different working pattern for another period during the same holiday year, should make a separate calculation of holiday entitlement for each such period
Case ref: Greenfield v The Care Bureau Limited, Case C 219/14
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