Remuneration - Holidays with pay

Russell and others v Transocean International Resources Ltd and others: Supreme Court (Lords Hope DP, Brown, Mance, Kerr and Wilson SCJJ): 7 December 2011

Article 7(2) of the Council Directive (EC) 2003/88, so far as material, provides: 'A worker’s employer may require the worker - (a) to take leave to which the worker is entitled...; or (b) not to take such leave, on particular days, by giving notice to the worker...'

Regulation 13 of the Working Time Regulations 1998, SI 1998/1833, so far as material, provides: '(1) Subject to paragraphs (5) and (7), a worker is entitled in each leave year to a period of leave determined in accordance with paragraph (2). (2) The period of leave to which a worker is entitled under paragraph (1) is... (c) in any leave year beginning after 23rd November 1999, four weeks.'

The claimant employees were employed to work in various capacities on offshore installations located in the United Kingdom Continental Shelf. All but one, C, were contracted to work to a pattern of two weeks offshore with a period of two weeks onshore ('field break'). C was contracted to work three weeks offshore followed by three weeks onshore. While offshore, the employees generally worked a 12-hour shift each day during which rest breaks were taken. That was followed by 12 hours off-duty living offshore on the installation. While offshore, they did not have any days off.

For the most part, the employees were free from work-related obligations during the entire period of their field breaks and could spend the time as they chose. The employees commenced proceedings at the employment tribunal, contending that the relevant provisions of the Working Time Regulations 1998 (SI 1998/1833) (the WTR) required the defendant employers (the employers) to permit them to take four weeks paid annual leave from periods when they would otherwise be required to work on the offshore installations.

The employment tribunal held that 'leave' in regulation 13 of the WTR involved a release from what would otherwise have been an obligation to work, or at least to be available for work or otherwise in some way on call, and that consequently the field breaks were not to be regarded as annual leave for the purposes of the WTR, although they might provide periods of compensatory rest for the purposes of regulation 24 of the WTR to the extent required. The employers appealed.

That finding was set aside by the Employment Appeal Tribunal, which held that the time conceded during field breaks was more than sufficient to cover the entitlement to annual leave. The employees appealed to the Inner House of the Court of Session, which refused their appeal. The employees appealed to the Supreme Court. In deciding the issue, consideration was given to Council Directive (EC) 2003/88 (concerning certain aspects of the organisation of working time) (the WTD), regulation 13 of the WTR and article 7 of the WTD.

The critical issue for consideration was how the repeating shift pattern would fall to be viewed for the purposes of the WTD.

The employees submitted that 'annual leave', when properly constructed, meant release from what would otherwise be an obligation to work, and that the employers could not discharge their obligation to provide the employees with annual leave by insisting that they took it during periods of field break. They contended that the periods of field break were their time and not their employers' time, and that it was from the employers' time that the annual leave should be taken. The employers contended that time spent onshore was in itself a rest period, as it was not working time. They further contended that the time spent ashore was substantially more than the minimum of four weeks' annual leave to which the employees were entitled under the WTR.

The appeal would be dismissed.

On the proper interpretation of the WLD, article 7 did not require that the weeks of annual leave had to be taken consecutively or that those weeks could not be interrupted (see [18] of the judgment). The purpose of the WTR was to implement the provisions of the WTD. Its provisions had to be interpreted, as far as possible, in conformity with the wording and purposes of the WTD. The quality of the periods set aside in each cycle would not determine whether the minimum requirements for leave had been satisfied.

Although the purpose of the entitlement to annual leave was to allow the worker to rest and enjoy a period of relaxation and leisure, the WTD had met that purpose by laying down the minimum periods of rest that had to be given in that cycle.

However, on the relevant case law, the Strasbourg Court had not ruled that a pre-ordained rest period, where the worker would be free from all obligations to the employer, could never constitute annual leave within the meaning of article 7(2) of the WTD. Consequently, 'rest period' would mean any period which was not working time, irrespective of where the worker was at that time and what he was doing, provided that he was not working. It was clear that the time the employees spent on field break ashore would fall into that category (see [22], [36] of the judgment).

Reading regulation 13 of the WTR in conjunction with article 7 of the WTD, the employers would be entitled to insist that the employees had to take their paid annual leave during periods when they were onshore on field break (see [34], [38] of the judgment).

Litster v Forth Dry Dock and Engineering Co Ltd [1989] 1 All ER 1134 applied; Marleasing SA v La Comercial Internacional de Alimentacion SA: C-106/89 135 Sol Jo 15 applied; Sumsion v BBC (Scotland) [2007] IRLR 678 considered; Stringer v HM Revenue and Customs; Schultz-Hoff v Deutsche Rentenversicherung Bund: joined cases C-520/06 and C-350/06 [2009] All ER (D) 147 (Jan) considered; Pereda v Madrid Movilidad SA: C-277/08 [2009] All ER (D) 88 (Sep) considered. Decision of the Court of Session [2010] CSIH 82 Affirmed.

Thomas Linden QC and Peter Edwards (instructed by Thompsons Solicitors) for the employees; John Cavanagh QC and Sandy Kemp (instructed by Simpson & Marwick) for the employers.