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Rolled Up Holiday Pay 3

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This old chestnut is back. In a series of conjoined appeals, under the lead case Smith v Morrisroes & Sons, the Employment Appeal Tribunal has clarified earlier guidance on rolled-up holiday pay.

The law is currently set out in the Court of Appeal's decision in Caulfields v Marshalls Clay Products (see bulletins of 4/8/03 and 6/5/04). In this new case, the Employment Appeal Tribunal recognises that the 'rolled-up' holiday pay aspect need not necessarily be set out in the written contract, as terms (such as terms rolling up holiday pay) can also be incorporated through collective agreements or, importantly, through custom and practice (see para. 11).

The amended guidelines are set out in paragraph 5 of the decision.

Note that the entire issue of whether rolled-up holiday pay is permissible under the Working Time Directive is currently the subject of a reference to the ECJ in Robinson-Steele v RF Retail Services Ltd (see bulletin 17/3/04).

Smith v AJ Morrisroes & Sons