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European Court of Justice Ruling Indicates that 'Rolled-Up' Holiday Pay is Unlawful.

Publication: Mondaq Business Briefing
Publication Date: 22-MAR-06 		Format: Online
Delivery: Immediate Online Access
Full Article Title: European Court of Justice Ruling Indicates that 'Rolled-Up' Holiday Pay is Unlawful.(Caulfield v Hanson Clay Products Ltd.)

Article Excerpt
Originally published 16th March, 2006*

A ruling today* by the European Court of Justice (ECJ) in the case Caulfield v Hanson Clay Products Ltd (formerly Marshalls Clay Products Ltd) indicates 'rolled-up' holiday pay is unlawful even if it is clear in the contract of employment what proportion or amount of the rolled-up pay is holiday pay. Pinsent Masons is acting for the employer in this case.

What is rolled-up holiday pay?

'Rolled-up' holiday pay refers to the practice of an employer agreeing with workers that their pay for annual leave is included in their hourly remuneration and paid as part of remuneration for working time but not paid in respect of a specific period of leave actually taken. It is a practice used by many employers in the UK, particularly in the construction, manufacturing and education sectors.

Although there are many variations, essentially the issue arises when employers pay workers by the hour and agree...

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