You may recall all the controversy over the decisions from the ECJ over statutory holiday under the Working Time Directive and the Regulations implemented in the UK. In particular, this centred around whether employees who were off sick accrued working time holiday and whether this should be paid or rolled over. The decisions kept employment lawyers on their toes with many u-turns.
There have been two recent decisions on this topic. The first is from the EAT in the case of Sood Enterprises Ltd v Healy. The Court of Appeal last year, in NHS Leeds v Larner, decided that it was possible to interpret the WTR in line with the WT Directive and allow the carry over of statutory holiday where the employee had been off sick in the relevant leave year and thus unable to take holiday. Payment was permitted for this leave on termination otherwise it carried over into the next holiday year. This was in respect of the 4 weeks leave under Regulation 13. The position in respect of the additional 1.6 weeks leave was less clear. This was provided as an addition to the Regulations (Regulation 13A) a few years back when statutory holiday went from 20 to 28 days. The Court in Larner declined to decide whether this additional 1.6 weeks should be treated in the same way as the 4 weeks until a case came along. Well now one has!
The EAT in the latest Sood case decided that the additional leave under Regulation 13A was in excess of the 4 weeks minimum set out in the Directive. It was therefore a domestic provision which did not fall foul of EC law as the recent ECJ decisions have made it clear that member states can set their own conditions on the payment of leave in excess of the 4 weeks minimum requirement set out in the Directive.
Accordingly, the EAT held that in the absence of an express agreement to carry his 2010 leave over as provided for in Regulation 13A, there was no requirement for it to be carried over. Mr Healy therefore fell foul of the use it or lose it provisions and lost his payment for this additional leave for 2010 on termination of employment.
The second working time holiday case is only an Employment Tribunal decision, so not binding authority, but of interest nevertheless on the subject of payment for holiday. The case centred around the payment for the Regulation 13 holiday (4 weeks minimum) and the Tribunal ruled that this calculation should have taken into account overtime payments when calculating holiday pay. Under Regulation 16 of the WTR a weeks pay for these purposes uses the ERA definition. This would mean that voluntary overtime payments and overtime premiums would be excluded.
However, in this case, the Tribunal found that following Williams and others v British Airways Plc in the ECJ in 2011, employees are entitled to receive their normal remuneration for holiday pay. Normal remuneration included overtime payments where the employee was carrying out his normal role and therefore the fact that the employee had volunteered to do this outside of his normal contracted hours did not prevent these sums from being added to calculate his holiday pay. It will be interesting to see whether this interpretation of the WTR will be the subject of an appeal