ECJ guidance on calculating holiday pay for workers who increase their hours
8th February 2016
The case of Greenfield v The Care Bureau Ltd held that in circumstances where a part time worker increases their hours, an employer is not required to recalculate the employee’s entitlement to annual leave retrospectively, taking into account leave that had already been accrued and taken.
Ms Greenfield was employed as a care worker whose working days varied from week to week. The remuneration paid to Ms Greenfield for any given week also varied depending on the number of days or hours that she worked. Ms Greenfield took 7 days’ paid leave during a period when she was working one day per week. She then increased her hours to work a pattern of 12 days working followed by 2 days off.
Ms Greenfield subsequently requested a week of paid leave and was told by her employer, the Care Bureau Ltd, that she had already exhausted her entitlement to paid leave as she had taken her leave at a time when her work pattern was one day per week and so had taken an equivalent of 7 weeks’ leave.
Ms Greenfield brought a successful tribunal claim for pay in lieu of leave not taken, however, following an appeal by the Care Bureau Ltd and an application for reconsideration of judgement, the matter was referred to the European Court of Justice (ECJ).
The ECJ ruled that although member states were not required to retrospectively adjust annual leave already accrued in circumstances where a worker increases the number of hours that they work, a new calculation should be performed to determine the amount of annual leave that a worker is entitled to based on their amended working pattern.
The positive effect of this case for employers is that the ECJ decision does not require accrued holiday to be recalculated retrospectively in situations where a worker’s hours increase. However, this case law does mean that employers may need to distinguish between periods where a worker may work fewer days or hours and periods where more hours or days are worked. Therefore, employers will be required to calculate separately the annual leave entitlement for each period where a worker is working a different pattern of hours.