Three recent cases on holiday pay from the European Court and our domestic Employment Tribunal inform how employers should deal with the thorny issue of holiday pay.

In Maschek v Magistratsdirektion der Stadt Wien the ECJ has ruled that workers placed on garden leave are not entitled under EU law to pay in lieu of accrued holiday they could have taken during garden leave. The exception to this is where the employee has been unable to take leave due to sickness.

Under UK law, employment contracts can and usually do provide that any accrued unused leave is deemed as taken during garden leave. An employer can also give notice that the leave must be taken during garden leave. This ECJ decision suggests that the employer may simply have the right to count garden leave as extinguishing accrued holiday without doing anything further.

In another case before the ECJ, Sobczyszyn v Skola Podstawawa v Rzeplinie, the ECJ has suggested that leave which is not described as annual leave but which is used for rest and recuperation (i.e. a sabbatical with no work-related purpose) can count as statutory holiday and therefore prevent a worker taking additional holiday in a given leave year. If a sabbatical or other form of leave which is not for rest and recuperation is taken, this will not extinguish holiday. Not forgetting of course that sick leave is not rest and recuperation, it is sick leave as distinct from holiday leave.

A first instance tribunal in the UK, Brettle v Dudley Metropolitan Borough Council, has ruled that voluntary overtime payments made once a month over a number of years were sufficiently regular to constitute “normal pay” and therefore had to be included in a calculation for holiday pay. This is a first instance decision and is not binding on other tribunals but it might be indicative of the general direction of judicial thinking around this area.