The ECJ has today handed down its judgment in Greenfield v The Care Bureau Limited, a case which considers how holiday and holiday pay should be calculated where the worker has increased their working hours during the holiday year. The ECJ held that, in the event of an increase in the number of hours of work performed by a worker, Member States are not obliged to provide that the entitlement to paid annual leave already accrued, and possibly taken, must be recalculated retroactively according to the worker’s new work pattern. A new calculation must, however, be performed for the period during which working time increased.

Ms Greenfield was employed by Care Bureau from 15 June 2009. Her contract provided that working hours and days differed from week to week and the remuneration payable for any week varied according to the number of days or hours of work performed.  She was entitled to 5.6 weeks of leave per year. Ms Greenfield left Care Bureau on 28 May 2013. She took 7 days of paid leave during the final leave year, in July 2012. During the 12-week period immediately preceding that holiday, her work pattern was 1 day per week. From August 2012 Ms Greenfield began working a pattern of 12 days on and 2 days off taken as alternate weekends.

In November 2012 Ms Greenfield requested a week of paid leave. Care Bureau informed her that, as a result of the holiday taken in July 2012, she had exhausted her entitlement to paid annual leave. The entitlement to paid leave was calculated at the date on which leave was taken, based on the working pattern for the 12-week period prior to the leave. Since Ms Greenfield had taken her leave at a time when her work pattern was one day per week, she had taken the equivalent of 7 weeks of paid leave, and accordingly exhausted her entitlement to paid annual leave. Mrs Greenfield brought a tribunal claim arguing that national law, read in conjunction with EU law, requires that leave already accrued and taken should be retroactively recalculated and adjusted following an increase in working hours, for example, following a move from part-time to full-time work, so as to be proportional to the new number of working hours and not the hours worked at the time leave was taken. The tribunal made a reference to the ECJ.

The ECJ held that, in the event of an increase in the number of hours of work performed by a worker, Member States are not obliged to provide that the entitlement to paid annual leave already accrued, must be recalculated retroactively according to that worker’s new work pattern. A new calculation must, however, be performed for the period during which working time increased.

A change and, in particular, a reduction in working hours when moving from full-time to part-time employment cannot reduce the right to annual leave that the worker has accumulated during the period of full-time employment. It follows that, as regards the accrual of entitlement to paid annual leave, it is necessary to distinguish periods during which the worker worked according to different work patterns, the number of units of annual leave accumulated in relation to the number of units worked to be calculated for each period separately.

The same conclusion should be drawn where the leave is not taken during the period in which it accrued, in which the worker worked part-time, but during a later period in which he works full-time.

Where the worker, after accumulating rights to paid annual leave during a period of part-time work, increases the number of hours worked and moves to full-time work, the number of units of annual leave accumulated in relation to the number of hours worked must be calculated separately for each period.

In a situation such as that at issue in the main proceedings, EU law therefore requires a new calculation of rights to paid annual leave to be performed only for the period of work during which the worker increased the number of hours worked. The units of paid annual leave already taken during the period of part-time work which exceeded the right to paid annual leave accumulated during that period must be deducted from units accrued during the period of work in which the worker increased the number of hours worked.

The ECJ went on to consider how holiday pay must be calculated where the employment relationship is terminated. Workers must receive their normal remuneration for annual leave. With regard to a worker who has not been able, for reasons beyond his control, to exercise his right to paid annual leave before termination of the employment relationship, the allowance in lieu to which he is entitled must be calculated so that the worker is put in a position comparable to that he would have been in had he exercised that right during his employment relationship. It follows that the worker’s normal remuneration is also decisive as regards the calculation of the pay in lieu of annual leave not taken when employment terminates. Therefore, the calculation of the pay in lieu of untaken annual leave must be carried out according to the same method as that used for the calculation of normal remuneration. This means that if working hours have changed during the holiday year, different calculations may need to be performed for different periods.