Token sum of £1 for unused holiday was unlawful
Case 8: The facts
Ms Podlasiak worked for Edinburgh Woollen Mills on a zero-hours contract. She resigned to look for other work. When she left, she was owed three days of untaken holiday. A term in her contract of employment said that on termination of the employment contract, she would be paid the token sum of £1 for any unused holiday. If she had worked for three days instead of being on holiday, she would have earned £176.
She brought a tribunal claim to be paid for her unused holiday pay under the Working Time Regulations (WTR).
The employment tribunal agreed that she was entitled to be paid for this holiday. Relying on the European Court cases of Schultz-Hoff v Deutsche Rentenversicherung Bund and Stringer v Her Majesty’s Revenue and Customs [2009] EUECJ C-350/06, the tribunal said that any contract term that regulates payment for untaken holiday on termination must agree to pay the employee an amount equivalent to whatever the worker would have earned if the leave been taken. Anything less is a breach of the Working Time Directive and unlawful.
Commentary
Although this is a tribunal decision and therefore not binding, it follows binding European authorities on holiday pay and is therefore very important, especially for zero-hours contract workers whose contracts include this kind of term.
Podlasiak v Edinburgh Woollen Mill Limited Case No. 2701291/2013