Holiday pay

The facts

Mr Munro's employer, a construction company, refused to pay him during his holidays, stating that his basic rate took holidays into account.

The ruling

The Court of Appeal held that it is essential not just that payment should be made for annual leave, but that it should be made in association with the taking of that leave. Even though there was no suggestion that the rolled-up rate had been adopted to avoid the obligation to pay during holidays, it could lead to a situation where workers would be discouraged from taking holidays, which the Working Time Regulations were intended to prevent. Furthermore the fact that Munro's contract stated that a holiday element was included in the basic rate was void.

* Munro v MPB Structures, 1 April 2003