Short-term contractors win right to paid leave

Workers employed on short-term contracts won the right to four weeks' annual holiday yesterday with a landmark ruling in the European Court of Justice that will force a change in the law.

The decision, which lawyers said could improve conditions for millions of workers, means that firms will no longer be able to avoid giving leave to people employed on a freelance or short-term basis.

Yesterday's case was brought by Bectu – the Broadcasting Entertainment Cinematograph and Theatre Union – many of whose members have been caught out by the current regulations. But changes to the law, which the Government signalled, will cover a host of different categories of worker, from supply teachers to cleaners.

At present British legislation states that the right to annual holidays is conditional on the worker having been continuously employed for 13 weeks by the same employer. That stipulation will now have to be changed. The Employment Relations and Regions minister, Alan Johnson, said the Government would consult urgently to bring British law into line with the judgment.

He added: "As part of the consultation we will be proposing a system of accrual in the first year of employment, providing one-twelfth of the annual entitlement in each month rounded to the nearest full day. This would mean that a full-time employee could take two days after one month."

The judgment at the European Court in Luxembourg was hailed as a victory by Bectu, which originally took the Government to the High Court in London, only for the case to be referred to Luxembourg.

Roger Bolton, the general secretary of Bectu, said: "We are particularly pleased that the [court] has concluded that workers on short-term contracts often find themselves in a more precarious situation than those employed under longer-term contracts, and that it is all the more important to ensure that their health and safety is protected."

But the Confederation of British Industry (CBI) said it was "disappointed" by a ruling that may become an "inconvenience for employers and employees". Susan Anderson, the CBI's director of human resources, said the judgment would restrict flexibility and prevent some companies offering extra pay in lieu of holidays.

The judgment, which will have to be rubber-stamped by the High Court in London, found that British regulations were incompatible with the European Working Time Directive. Significantly the judgment makes no mention of Europe's new Charter of Fundamental Rights, which the Advocate General quoted in his preliminary opinion that went against the Government.

Yesterday's ruling argued that "the right to paid leave is a social right conferred directly on all workers by Community law". The judges also invoked the EU's Social Charter, from which Britain won an opt-out in 1989, although it later accepted the provisions of the Working Time Directive.

The court said: "The purpose of the directive is to lay down minimum requirements intended to improve the living and working conditions of workers through approximation of national provisions concerning in particular the duration of working time." The court pointed out that the Social Charter was taken into account when the directive was drawn up, to give every worker "satisfactory health and safety conditions in his working environments".