Part-time holiday payment
Labour & European Law Review Weekly Issue 453 20 January 2016
Following a referral about how to calculate an employee’s holiday entitlement if they increase their hours during the course of their holiday leave year, the Court of Justice of the European Union (CJEU) has held in Greenfield v The Care Bureau Ltd that employers have to carry out a new calculation for the period during which working hours increased. They do not, however, have to recalculate accrued holidays retrospectively.
Ms Greenfield started working for the Care Bureau on 15 June 2009, which was also when her annual leave year began. She took seven days of paid leave in July 2012, but during the 12-week period immediately preceding that holiday (the period used to calculate her entitlement), she only worked a total of one day per week. However, in August 2012 she started working a pattern of 12 days on and 2 days off taken as alternate weekends, an average of 41.4 hours of work per week.
In November 2012 she asked for a week’s leave but was told that as a result of the holidays she had already taken in July, she had exhausted her entitlement. That is, she had already taken the equivalent of seven weeks of paid leave which was more than the 5.6 weeks statutory leave under the Working Time Regulations 1998.
She left the Care Bureau on 28 May 2013 and lodged a claim for pay in lieu of the annual leave that she had not taken. She argued that leave already accrued and taken should be retrospectively recalculated and adjusted following an increase in working hours, for example, following a move from part-time to full-time work. That way, the leave would be proportional to the new number of working hours and not the hours worked at the time the leave was taken. For its part, Care Bureau argued that EU law does not provide for a new calculation and that member states are not therefore required to make any such adjustment under national law.
Decisions of lower courts
Although the employment tribunal initially upheld her claim, it then revoked its decision and took the view that the law was unclear. It asked the CJEU to decide if the pro rata principle pursuant to the Part Time Workers Directive meant that holiday under the Working Time Directive should be recalculated when working hours increased.
The Court held that annual leave must be calculated with regard to the working pattern set out in the contract of employment and on the basis of the days, hours and/or fractions of days or hours worked.
Previous case law had established that a reduction in working hours from full-time to part-time employment could not reduce the worker’s right to annual leave that they had accumulated when they were working full time. It was necessary therefore for employers to distinguish between different work patterns and calculate the worker’s entitlement for each period separately, which was what Ms Greenfield’s employer should have done.
So although member states did not have to recalculate retrospectively the entitlement to accrued annual leave if a worker increased their hours, they still had to ensure that employers carried out a new calculation for the period during which the working time increased. This applied where the employment relationship had ended and where it was continuing.