Dismissed but re-instated employees could be entitled to paid annual leave in respect of leave that has accrued during the period from the date of dismissal to the date of their reinstatement. At least, this was the recent preliminary ruling of the Advocate-General to the European Court of Justice (ECJ) in the cases of QH and CV. Whilst the Advocate-General’s opinion is not legally binding, the ECJ is likely to reach the same conclusion when the full case is heard later this year.
In light of the resourcing issues that Employment Tribunals are continuing to struggle with, many Employment Tribunal hearings are taking up to 2 years (if not longer) to be heard. This ruling could therefore have a significant impact on businesses whose employees are re-instated following a finding of unfair dismissal. In essence, re-instated employees would be entitled to up two years’ paid annual leave if their Tribunal case has taken that long to be heard.
Re-instatement decisions are fairly rare given the breakdown in the employment relationship that is prevalent once an employee has taken their former employer to Tribunal. However, employers will also need to be mindful that the ruling should be followed in relation to employees who are re-instated following a successful internal appeal procedure. A failure to do so could lead to an unlawful deduction from wages claim being pursued against them for unpaid holiday.
You may be fooled into thinking that we can now ignore European Court decisions given that we are no longer part of an EU member state. However, until 31 December 2020 (or such later date if extended), the UK will be treated for most purposes as if it were still an EU member state. The UK will, therefore, need to continue applying and implementing EU law that falls within the scope of the UK-EU withdrawal agreement, including judgments handed down by the ECJ during that time. If a final judgment is handed down in this case before the end of the implementation period, this ruling could apply in English law.