what happens to their holiday entitlement and holiday pay for the period between dismissal and reinstatement?

That is the question that the Advocate-General (A-G) of the European Court of Justice (CJEU) had to consider in the recent case of QH & CV (Case C-762/18 and Case C-37/19).

This matter involved referrals to the CJEU from Bulgaria and Italy. In both cases the employees had been dismissed. The employees had pursued claims in the national courts for unlawful dismissal and subsequently been re-instated to their employment by a court order. Some years later, the employees were dismissed again.  They claimed that they should be paid in lieu of their accrued but untaken holiday entitlement, including holiday which they argued they had accrued in the period after they were first dismissed but before they were reinstated.

Under EU law, workers are entitled to 4 weeks’ annual leave. The UK enhanced this right meaning that UK workers are entitled to 5.6 weeks annual leave in each leave year. The CJEU was only concerned with the EU entitlement to 4 weeks’ annual leave only.

The national courts in both cases concluded that as the purpose of annual leave entitlement was to give the employee a rest from work, where the employee did not actually carry out any work (and these employees hadn’t as they had been dismissed) there was no ‘missed rest’ and the employees were not therefore entitled to paid annual leave for that period. The employees appealed and the matter was referred to the CJEU.

The A-G’s view was that although the purpose of paid annual leave is to give the worker a rest from work, and is based on the premise that the worker actually worked during the reference period, there are certain specific situations in which that link is broken. Two such situations are where the worker is absent due to sickness or maternity leave.

The A-G concluded that when considering the issue of annual leave entitlement, the situation of a worker who had been unlawfully dismissed and reinstated was not ‘fundamentally different’ to that of a worker who had been unable to work due to illness or maternity leave. The key criteria which are met in each of those examples are that the absence from work is not foreseeable and it is beyond the worker’s control.

The A-G further commented that it did not seem just that a worker who was denied the opportunity to work due to the wrongful acts of the employer (i.e. an unlawful dismissal), should suffer as a result. The worker would therefore accrue holiday entitlement for the period between dismissal and reinstatement and that leave which could be taken following their reinstatement.

In the current cases, the employees had been dismissed for a second time. They claimed payment in lieu of the accrued but untaken holiday as a result. The A-G agreed it would be payable.

The only caveat placed upon this is where the unlawfully dismissed worker obtains other employment with a new employer between the unlawful dismissal and reinstatement. In those circumstances, the worker cannot claim a payment in lieu of holiday from the first employer. That would lead to a windfall for the worker concerned as they would be entitled to paid annual leave for that period from both employers otherwise.

This opinion from the A-G is not binding on the CJEU. We expect that the full case will be heard by the CJEU later this year. The decision may or may not become binding in UK law depending upon the timing of the decision and whether it falls within the transitional BREXIT period.  However, if an employee does claim reinstatement, this is an extra cost to factor into any potential compensation that may be due to an employee, should a Tribunal make a reinstatement order.

If you would like any further information, please contact Hannah Boynes on 0113 280 2058 or hannah.boynes@luptonfawcett.law or another member of the employment law team.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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