Rolled Up Holiday Pay In the UK

By Simon Jeffreys and Anthony Fincham

Rolled up holiday pay in the UK exists where the remuneration a worker receives includes an element of holiday pay added to his or her normal payment (eg hourly, daily or weekly).

Thus the employer does not have to make any payment at all at the time the worker actually takes a holiday. However, unless there is an express contractual agreement for this rolled up arrangement, such pay will not be deemed to include any element for holiday pay at all; it is pure pay. The issue comes to be whether the rolled up agreement complies with the European Union Working Time Directive. The decision in Clarke v Frank Staddon Ltd;Caulfield v Marshalls Clay Products [2004] EWCA Civ 422 (28 April 2004) made it clear that such agreements would comply with the directive.

(Lexis Nexis Butterworths Employment Law Bulletin vol. 10, no. 4)