Part time worker holiday recalculation

The European Court of Justice (ECJ) has ruled that when a worker increases their working hours, any annual leave which has already been accrued does not need to be recalculated retrospectively to take into account the increased hours. The case does differ in relation to future leave entitlement, which should be recalculated to reflect the increase in working hours.

The law covering annual leave is contained in the Working Time Regulations 1998. Full time workers are entitled to a minimum of 20 days’ (four weeks’) annual leave per year; employees also have the right to an additional 8 days’ (1.6 weeks’) annual leave under regulation 13A.  The Part Time Worker Regulations set the pro rata principle which is applied in the case of part time workers so that part time workers receive the same proportion of holidays as full time workers.

In a recent case Ms Greenfield was employed in the care industry, working different days and hours each week. In July 2012 Ms Greenfield took some annual leave, at which point she was working one day a week. She had taken more than her leave entitlement for that period. From August 2012 Ms Greenfield increased her hours and was working 12 days at work, 12 days off work. She requested one week’s annual leave but the employer refused, stating that she had exhausted her entitlement.

Ms Greenfield successfully claimed for the week’s holiday pay in the Employment Tribunal. The Employer appealed and the case was stayed following a reference made to the ECJ on the issue. Ms Greenfield’s case was that the law requires that leave already accrued and taken should be retrospectively recalculated and adjusted after the increase in working hours. The employer argued that this is not the case.

The decision of the European Court of Justice stated that the law does not require a retrospective recalculation and adjustment of leave already accrued whether this leave had been taken or not. However, the leave going forward must be recalculated to take into account the increased hours. Case law is clear in showing that a reduction in hours cannot reduce the right to annual leave which has already been accumulated during full time work. Annual leave must be calculated separately for each different working time period.

Employers should take care to look at each period of work carefully when employees change working patterns. Holiday entitlement should be reviewed when employees change working patterns and the matter should be discussed with them to avoid any confusion and to manage expectations. The recent case has shown that care should be taken when employees increase their hours in relation to annual leave entitlement going forward.