European court to decide on right to paid holidays

The High Court has referred on a
union’s challenge to the validity of one of the Working Time regulations.

The latest chapter in the Working
Time regulations’ short history is the challenge by the Broadcasting,
Entertainment, Cinematographic and Theatre Union in the High Court concerning
the validity of Regulation 13(7). The High Court in turn has referred a number
of questions to the European Court of Justice to see whether the regulations
are compatible with the directive from which they derive.

Regulation 13 now entitles workers
to four weeks’ paid holiday a year provided that, in accordance with 13(7),
they have worked continuously for the same employer for 13 weeks. During the
qualifying period workers accrue holiday and, once the qualifying period is achieved,
they are entitled to the full amount of holiday but they receive nothing if
they do not get past the initial 13-week period.

Bectu has challenged the requirement
for a qualifying period on the basis that the directive does not permit such a
pre-condition. Bectu’s concern is that, in effect, the provision deprives most
of its members of paid holiday leave, as they are usually employed on
short-term contracts.

The Government’s principle argument
is that the qualifying period is within the scope of the directive which allows
member states to implement the requirement “in accordance with the conditions
for entitlement to, and granting of, such leave laid down by national
legislation and/or practice”.

The ECJ’s Advocate General has now
provided his opinion in the case. That opinion is provided for the guidance of
the ECJ; it does not bind the court but is usually (although not always)
followed.

The Advocate General said that the
flexibility for implementing the provisions on paid leave applies only to the “arrangements
for implementation”. These may include “the requirement of a minimum period of
employment before leave may be taken” but may not, as the UK legislation has
the effect of doing, preclude workers from becoming entitled to paid leave.

In other words, what the UK
regulations do is distinguish “between employment relationships of a specific
duration and those of an unspecified duration” not allowed by the directive.  

The Government also sought to argue
that the qualifying period was necessary in order to strike a balance between
workers’ needs and the financial restraints of, particularly, small to
medium-sized undertakings.

The Advocate General rejected this
argument on three grounds: first, the regulations do not distinguish between
different sizes of employer; second, economic considerations should not take
precedence over workers’ health; third, the EU took into account such economic
considerations when passing the directive.

The Advocate General has also said
that, by depriving workers with fewer than 13 weeks’ employment of the right to
take paid leave, even if they could not take the leave while working for the
employer they were also deprived of the right to be paid for leave accrued but
not taken when leaving employment. Such payments would, theoretically, enable
workers to take a rest before starting further employment.

In practice, the opinion will have
little immediate effect but because the ECJ frequently follows the Advocate
General’s  opinions it may well be that
the Working Time regulations will have to change on the question of the
qualifying period.

Public authorities, against which
the directive is directly enforceable, are more at risk, although many are
likely to elect to take no steps until the ECJ issues its ruling.

The ECJ is likely to hear the case
this summer.

Kate Brearley is a partner and head
of the employment and pensions group of City law firm Stephenson Harwood and
Charlotte Hamer is a professional support lawyer in the employment and pensions
group

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