Supreme Court confirms annual leave entitlement may be satisfied during periods of non-working time

In a recent decision which will be welcomed by employers in the oil and gas industry and may also impact atypical workers in other sectors including education, tourism and certain areas of manufacturing, the Supreme Court confirmed that offshore workers may be required to take annual leave during onshore “field breaks”. 

In Russell v Transocean International Resources Ltd [2011] UKSC 57, a number of oil and gas rig workers were employed on shift patterns generally consisting of two weeks working offshore followed by two weeks onshore where (apart from attending occasional training, appraisals, hearings and assessments), they were not required to carry out any work.  The employees spent a total of 26 weeks onshore each year.

The employees requested to take annual leave during the time they would otherwise be working offshore.  However, the employer refused and insisted they take annual leave during onshore time.  As a result, the employees submitted a claim to the employment tribunal. 

The employees’ claim was originally successful.  However, the initial decision was reversed on appeal and the claim ultimately progressed to the Supreme Court.  The Supreme Court agreed with the appeal decision and confirmed that:

·      under the Working Time Regulations 1998 (“WTR”), employees are entitled to four weeks’ annual leave each year (this is now 5.6 weeks);

·      although the purpose of annual leave is to enable workers to enjoy a period of rest and relaxation for health and safety purposes, there is no requirement to the “quality” of rest periods.  A rest period is simply any period that is not working time, irrespective of what the worker is doing.  Under the WTR, there is no requirement that annual leave should be a release from what would otherwise be an obligation to work; and

·      therefore, in this case the employees did not have a right to take annual leave as time off from offshore work and the employer could insist that the employees take annual leave during onshore periods. 

The Supreme Court noted that the WTR prescribe for certain rest breaks, daily rest periods and weekly rest periods which cannot overlap.  Additionally, there are certain “special cases” under the WTR, where workers may be afforded compensatory time off in lieu if they have been unable to take such breaks.  In this case, it was agreed that the first two days of employees’ field breaks were compensatory rest to make up for breaks they had been unable to take offshore (as they worked 12 hour shifts every day for two weeks).  However, the time spent onshore (26 weeks each year) was more than enough to satisfy the four week annual leave requirement under the WTR.

The Supreme Court also refused to refer the issue to the European Court of Justice.

The decision will come as a relief to employers (in the oil and gas industry and otherwise) who, following this ruling may continue to require employees to take annual leave during certain periods of time off or workplace closures.  Employers should also ensure they comply with the additional requirements under the WTR including rest breaks and daily and weekly rest periods and the relevant notice requirements for taking annual leave.

Anna Sanford is a solicitor in PwC Legal’s employment and pensions group, Nick Willis is a partner in PwC Legal’s employment and pensions group