Statutory Holiday Entitlement Saga Continues

Background

Under the Working Time Regulations 1998 (the “Regulations”) workers are entitled to 5.6 weeks holiday in each holiday year (28 days for full time workers). This is a minimum statutory entitlement and while it may be added to under a worker’s individual contract, it cannot be less than this for a full time worker.

In order to exercise their right to statutory annual leave, the Regulations require a worker to give notice to their employer, twice as many days in advance of the number of days leave to which the notice relates i.e. if a worker wishes to take 5 days leave he must give his employer at least 10 days notice of when he would like that leave to commence. 

The Regulations then provide that the employer can agree to the request in whole or in part or alternatively give counter notice which effectively refuses the holiday request. Regulation 15 however allows for the notice provisions to be varied or excluded by contract or other relevant agreement.

Facts

In the recent case of Lyons v Mitie Security Ltd Mr Lyons (“L”) was employed as a Security Officer by Mitie Security Limited (“Mitie”). L was only paid for the hours that he worked and Mitie did not guarantee him a minimum number of working hours per week.

L’s employment contract confirmed his entitlement to the statutory minimum annual leave entitlement and also provided that:-

• All annual leave had to be taken during the relevant holiday year and could not be carried forward to the following year – Mitie’s annual leave year ran from 1 April to 31 March;
• Pay for annual leave entitlement not taken in the relevant year would be forfeited; and
• Annual leave requests had to be submitted on Mitie’s standard form at least four weeks before the holiday start date wherever possible. Applications for annual leave on shorter notice would be considered on their merits and subject to staffing requirements.

At the start of March 2008 L had 9 days statutory annual leave entitlement outstanding which needed to be taken by 31 March 2008 or be forfeited. Therefore on 6 March L faxed Mitie requesting payment for those 9 days before the end of the holiday year. L did not make a request for specific days and did not use Mitie’s standard form.

L received no money for the 9 days leave and on discovering this bought a grievance in April 2008.  The grievance was rejected and L resigned and bought claims for constructive unfair dismissal and pay in lieu of untaken annual leave. The Tribunal dismissed both claims.

The Employment Appeal Tribunal Decision

L appealed to the Employment Appeal Tribunal (“EAT”).

During the appeal L had argued that the more favourable statutory right to take annual leave during the holiday year (as set out in Regulation 15) overrode any contractual provision which could deprive an employee of that right. L also suggested that in observing that entitlement an employer had to ensure that holiday was taken particularly if it was outstanding as the end of the holiday year approached.

• The EAT rejected this argument, finding that the Regulations did not support the proposition that statutory annual leave was an “inalienable right” which effectively obliged employers to ensure that workers took the holiday to which they were entitled.

Mitie had also made reference during the appeal to the European Court of Justice’s decision in the case of Stringer and others v Revenue & Customs Commissioners  and their finding that Article 7(1) did not preclude national legislation that lays down conditions for the exercise of the right to holiday, including the loss of that right at the end of a leave year, provided the worker has actually had the opportunity to exercise that right.

The EAT confirmed this and concluded that a workers right to statutory annual leave was subject to the notice provisions set out in Regulation 15 (or amended by contract, as appropriate). Notice provisions had to be operated by an employer in a manner “…that was not unreasonable, arbitrary or capricious” so as to deny any lawfully requested entitlement. If however they were operated correctly notice provisions could result in the loss of the right to leave that had not been taken at the end of the leave year.

In spite of the above findings however the EAT did uphold L’s appeal on the basis the Tribunal had failed to properly deal with the issue of whether Mitie had breached the contractual provisions governing L’s exercise of his right to annual leave, which was key to L’s constructive unfair dismissal claim.  The matter was therefore remitted to a different tribunal for a rehearing.

Government Guidance

On a slightly separate, although related note, the Government has published guidance on the interaction between paid holiday and sick leave ahead of possible amendments to the Working Time Regulations 1998 (SI 1998/1833) to deal with the decisions of the European Court of Justice (ECJ) in Stringer and others (Above) and Pereda v Madrid Movilidad SA .
 
Click here to view the Guidance. 

STOP PRESS …

An employment tribunal in the UK has now given effect to the European Court of Justice’s decision in the case of Pereda v Madrid Movilidad SA.

In this case, Shah v First West Yorkshire Limited, the tribunal ruled that an employee whose pre-arranged holiday coincided with a period of sick leave should be allowed to carry over that leave entitlement to the following year.