Following a ruling of the European Court of Justice on Tuesday 26 June the UK Government is going to be obliged to amend the Working Time Regulations 1998, which currently provide that the statutory entitlement to annual leave does not arise until a worker has been working continuously for the same employer for a minimum period of 13 weeks.
The decision of the ECJ is the culmination of an action launched in 1999 by the Broadcasting, Entertainment, Cinematographic and Theatre Union (BECTU). The essence of their case was that those of its members who were engaged on short term contracts for less than 13 weeks with the same employer were not receiving the annual leave which they argued their members were entitled to under the terms of the European Working Time Directive.
The ECJ found in favour of BECTU and held that the Working Time Regulations 1998 did not adequately implement the European Working Time Directive because of the exclusion for workers who had been employed for less than 13 weeks.
The Government has reacted swiftly to the judgment and has now sent out for consultation proposed amendments to the Working Time Regulations. These will remove the requirement of 13 weeks continuous employment before there is any entitlement to annual leave. However the way the proposed amendments are worded, namely that holiday pay “shall accrue at the rate of 1/12th for each month of employment”, suggests that workers whose contracts are for less than one month, or whose employment is terminated within the first month, will not accrue a right to holiday pay.
There is no doubt, however, that the effect of the proposed amendments will be to give a substantial number of workers, who are currently on short term contracts, rights to paid holiday which they do not currently have. That entitlement will be to 20 days per year with entitlement accruing on a pro rata monthly basis.
The existing provisions of the Working Time Regulations which allow an employer to refuse a request that annual leave be taken on specified dates, provided specified notice requirements are complied with, will remain. However, on the termination of the contract of employment, providing it has been in existence for at least one month, payment will have to be made to the worker in lieu of any untaken holiday entitlement. Employers will have to factor the cost into account when offering short term contracts.
The proposals to amend the legislation are currently subject to consultation but it is unlikely that there will be major changes to them given the very clear nature of the ECJ’s judgment.