The European Court of Justice (ECJ) has handed down a ruling arising from an Austrian case which has important implications for workers rights in the UK under the Working Time Regulations. The ECJ were asked to consider national legislation and whether it properly enacted European legislation. The ECJ held that relevant Austrian provisions were contrary to European law. European law precludes any national legislation which, in the event of a change in a worker's working hours, results in a reduction to the right to paid annual leave already accumulated but not yet exercised. The issue is that under the Working Time Regulations 1998 (WTR) calculations are made at the time when the leave is taken rather than at the time of accrual. If a worker who has previously worked full time reduces his hours then under the WTR his week's holiday pay would reflect his part time rather than his full time salary. The ECJ have ruled that in principle the worker should be able to take the accrued leave not yet taken. However, there is an important caveat to the decision. The pro-rata reduction of accrued leave entitlement is only outlawed where the worker has "not been able" to take that leave. Practical guidance arising from the case:-
- Workers changing from full time to part time work through a leave year should be encouraged to take accrued leave prior to the change in hours.
- Where that is not possible workers changing from full time to part time work should be allowed the accrued statutory annual leave and, arguably any accrued contractual leave in addition to the pro-rata leave to which they are entitled following the change.
- Importantly, a full time worker going on maternity leave who returns having negotiated part time working is entitled to exercise the holiday rights accrued during maternity leave on her return as if she still worked full time. Again, such a worker could be encouraged to take their accrued holiday entitlement at the end of the maternity leave prior to commencing part time work.
- Arising from another issue in the case workers taking parental leave when a holiday year finishes must not lose their accrued statutory holiday entitlement but instead must be allowed to carry it over.
For further information please contact Holly Dobson on 0114 266 6660 or email [email protected]
