R v Secretary of State for Trade and Industry ex parte BECTU, Case C-173/99, European Court of Justice 26 June 2001

BECTU has become the first UK union successfully to challenge the government before the European Court and has secured the right to paid annual leave for workers on short-term contracts.

The Court ruled that the requirement that workers had to be employed for thirteen consecutive weeks to qualify for paid annual leave was unlawful. The UK Working Time Regulations did not properly implement the EU Working Time Directive.

The judgment stresses that the entitlement of every worker to paid annual leave must be regarded as a particularly important principle of Community social law. It derives from the Community Charter for the Fundamental Social Rights of Workers (1989). Four weeks' paid annual leave is a social right directly conferred by the Directive on every worker as the minimum requirement necessary to ensure protection of health and safety.

The Court said that a qualifying period excluding workers in the first 13 weeks of employment negates an individual right granted by the Directive and is incompatible with the objective of the legislation. The national rule was manifestly incompatible with the Directive.

It was rightly pointed out that rules such as the 13 week qualifying period are liable to give rise to abuse because employers might be tempted to evade the obligation by employing more frequently on short-term contracts. There is plenty of evidence that this is what has happened in the UK. The Court emphasised that short-term contract workers are often more vulnerable than other categories of workers and it is all the more important that their health and safety is protected.

It is accepted that there may be some qualifications on when leave may be taken, but there can be no exclusion of the right to leave. The Court rejected the UK's arguments to the contrary as based on purely economic considerations.

The consequence of the judgment is that the 13 week qualifying period is unlawful and must be deleted.

The Government immediately issued a consultation document on amendments to the Regulations to introduce an accrual system. This would mean that a full-time worker had an entitlement to two days leave after working one month. It is not clear what rights the worker would have in that first month - either in respect of taking leave or in respect of payments for leave accrued but not taken when the engagement comes to an end.
Unless workers genuinely acquire an entitlement to paid annual leave from day one, the amended law will not comply with the Directive as interpreted by the Court.

There is one further point. The Court describes the right to paid annual leave as "a social right directly conferred by the Directive" and an "individual right expressly granted by the Directive". This suggests that the ECJ regards this as a right having direct effect against state employers, contrary to the view taken by the Court of Appeal in Gibson v East Riding of Yorkshire (LELR 31, February 1999).