Luxemburg, 21/03/2006 (Agence Europe) - In a Robinson-Steele judgment, the European Court of Justice has deemed the British rolled-up holiday pay system to contravene the working time directive. In this system, annual holiday payment is included in the hourly or daily rate of pay, when the worker should receive such a payment for a determined holiday period, according to a press release from the Court of Justice. The Court stresses that Member States must take the measures appropriate to ensure that practices incompatible with the provisions of the directive relating to the entitlement to annual leave are not continued.
Five employees from three different companies took their complaint to the Employment Tribunal or the Court of Appeal England & Wales, Civil Division, requesting payment for their annual holidays. The British Courts asked the Court of Justice if the rolled-up holiday pay system was compatible with the working time directive. The Court has just responded in the negative. It points out that every worker's entitlement to annual paid leave is an important principle in Community social law from which there is no derogation. The British system could lead to situations where the minimum period of paid leave is replaced by a form of financial compensation, which the directive precludes, except where the employment relationship is terminated. This ban is intended to ensure that every worker enjoys an actual rest. As for the amounts already paid to workers in the rolled-up holiday pay system, the Court says that payments made in a transparent and comprehensible way may be set off against the payment for specific leave. However, where there is no transparency or comprehensibility, such set-off is excluded, says the Court.