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Employment Law

Legal guidance - compliance - software

08 JAN 2016

Annual leave - how changes in working patterns impact upon the entitlement of part-time employees of your family business

Annual leave - how changes in working patterns impact upon the entitlement of part-time employees of your family business
Nick Murrell
Solicitor, Veale Wasbrough Vizards

In the recent case of Greenfield v The Care Bureau Limited, the European Court of Justice (ECJ) has made clear that, when a part-time employee's working hours increase, their entitlement to annual leave should be recalculated to reflect this.

However, this recalculation should only be applied going forward and does not need to be undertaken retrospectively who the whole leave year.

The facts

Ms Greenfield was a care worker at The Care Bureau Ltd (CBL). Her contract stated that her working days and hours differed from week to week. As of June 2012, she was working one day a week, and so her statutory minimum holiday entitlement under the Working Time Regulations 1998 was 5.6 days. In July 2012, Ms Greenfield took seven days of paid annual leave, thereby ostensibly exhausting her annual entitlement.

However, from August 2012, Ms Greenfield's working pattern increased to 12 days on and 2 days off. She requested additional annual leave in November 2012 but this was refused on the basis that she had exhausted her entitlement for the year.

Ms Greenfield brought a claim in the Employment Tribunal (ET) for an allowance in lieu of leave not taken. She argued that, as her working pattern was now full-time, she should be entitled to 28 days of annual leave rather than the 5.6 days given to her by CBL. The ET initially held in her favour but revoked its judgment following a request for reconsideration by CBL and referred the matter to the ECJ.

ECJ's decision

The ECJ confirmed a number of principles for employers when dealing with the calculation of holiday entitlement for part-time employees who increase their hours part-way through a leave year:

  • the accumulation of annual leave for these periods of different working patterns should be calculated separately. The later period does not have to be applied retrospectively to the whole leave year;
  • where the annual leave taken during the earlier part-time period exceeds the entitlement accrued in that period, the excess should be deducted from the newly accumulated leave entitlement accrued during the later full-time of increased part-time period;
  • the approach to these calculations is the same on termination when working out payment in lieu of figures as it is when the employment relationship is ongoing and an employee's entitlement to remaining leave needs to be calculated.
Best practice

The decision is not particularly surprising and provides a sensible and intuitively fair approach to the calculation of the holiday entitlement of part-time employees. As we begin a new year, now may be a sensible time to ensure that all employees' annual leave entitlements for the forthcoming year are being calculated correctly.

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