The highest court in the UK has confirmed that time spent onshore can constitute paid time off for annual leave purposes. The Supreme Court gave judgment on 7 December 2011 in Russell and ors v Transocean International Resources Ltd and ors, a case concerning offshore oil rig workers, but also of interest to other employers with atypical holiday arrangements.

The case involved the application of the paid annual leave provisions of the Working Time Regulations 1998 (WTR) to workers whose working pattern is to spend time working offshore, and to spend time, usually not working, onshore. The WTR were amended in 2006 to specifically confirm their applicability to all UK offshore areas.

The workers typically have a working pattern of working two weeks offshore and two weeks onshore. They spend over 26 weeks a year onshore when they can go home, although a small amount of time can be/may be spent on training courses or having medical assessments. The key issue was whether the period spent onshore should count towards the workers’ right under the WTR to paid annual leave. At the time the workers made their claim, the entitlement was to four weeks’ paid annual leave. This has now increased to 5.6 weeks.

The workers claimed that a proper interpretation of “annual leave” should mean they are released from any obligation to work. They argue that they are not receiving their paid annual leave entitlement if their employer insists that they take their annual leave during periods onshore. The workers claim that time onshore is their time, and that they should take annual leave during their employers’ time - offshore. Otherwise, they argued it was like requiring a Monday-to-Friday worker to take their holidays on Saturday (the Saturday Problem).

The employers argued that time spent onshore is a rest period as it is not working time. When added up, it provides the workers with far more than (what was) the minimum right to four weeks’ annual leave under the WTR. Therefore, there is no obligation on the employers to allow the workers to take annual leave out of the periods spent offshore.

An Employment Tribunal (ET) in 2008 found that onshore time was not to be regarded as annual leave under the WTR. There was no “release”, when onshore, from an obligation to work or to be available for work, or from being on call, as required by the WTR.

The employers successfully appealed this decision to the Employment Appeal Tribunal (EAT). The EAT found the workers’ time onshore was more than enough to cover the right to annual leave, and the workers were free of all and any work duties and the possibility of being called upon to work.

The workers appealed unsuccessfully to the Court of Sessions and then finally to the Supreme Court, which considered the latest European case law decisions, including Gomez. The Supreme Court noted the ECJ in Gomez had not said that a preordained rest period, when a worker is free from all obligations to the employer, can never constitute annual leave. Therefore, it held that a rest period simply means any period which is not working time and this can include any period spent not working onshore. The employers can therefore insist the workers take their paid annual leave during periods when they are onshore.

The Supreme Court recognised the potential Saturday Problem. However, although on a literal reading of the WTR this course might be open, and would be an abuse of the WTR, the Saturday Problem did not arise in the case of offshore workers.

Incidentally, although the Saturday Problem did not need to be addressed in this case, the Supreme Court commented that arguably the Working Time Directive and Gomez required periods of annual leave to be measured in weeks not days, so that a worker can opt to take all or part of it in days, but cannot be required to.

The Supreme Court decision is a great relief to the offshore industry, but also to other sectors. Had the offshore workers’ argument succeeded, problems would have also arisen in connection with teachers, who are required to take their annual leave during non-term time, and professional footballers, who take leave outside the football season.