The TUC has welcomed a European Court of Justice (ECJ) ruling that effectively puts an end to the practice of paying rolled-up holiday pay, where an employer agrees with workers that their pay for annual leave be included in their hourly remuneration.
The ECJ was ruling in a case brought by a group of British shift workers demanding the right to payment during their holidays instead of notional extra hourly pay instead.
Philip Titchmarsh, employment senior associate at Pinsent Masons, the law firm acting for the employer in this case, said: “The European Court of Justice has decided that payment for annual leave through rolled-up holiday pay is contrary to the Working Time Directive.
“The good news for employers who have paid workers for holiday through a system of rolled-up holiday pay, is that payments made transparently and comprehensibly may be set off against the payment due for specific leave.
TUC general secretary, Brendan Barber, said the ECJ decision should make it much more difficult for rogue bosses and employment agencies to cheat staff out of their holiday pay.
“In the past it has been all too easy for employers to say they are paying staff for their holidays without ever coughing up an extra penny,” he said.
“Up to a million construction workers and agency temps should now start to get the proper holiday entitlement and pay to which they are entitled.”