Robinson Steele v RD Retail Services [2006] IRLR 386

Holiday pay is "rolled up" if the worker's normal rate of pay includes an extra element as payment for holiday that the worker will be entitled to in the holiday year (or, for example, during a fixed-term contract). When the worker actually takes their holiday, they are not paid holiday pay separately.

• Although this was allowed in the UK, the ECJ held this practice to be in contravention of the Working Time Directive.

NB it had been held previously by CA that this practice did NOT breach WTR. Article 7 says that “The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.”

To roll up holiday IS effectively giving someone an allowance in lieu of holiday pay.

To comply with the Directive, holiday pay must be a payment in respect of a specific period during which the worker actually takes leave from work.

• NB where this practice results in the worker receiving holiday pay before holiday what’s the problem? They are getting their money early.