The EAT had ordered the case be referred back to the Tribunal to decide whether before August 2001 there had been any holiday pay in the contract, and any break in employment.
48 in that regard, it must be recalled that the entitlement of every worker to paid annual leave must be regarded as a particularly important principle of Community social law from which there can be no derogations and whose implementation by the competent national authorities must be confined within the limits expressly laid down by the directive itself (see Case C-173/99 BECTU [2001] ECR I-4881, paragraph 43).
49 The holiday pay required by Article 7(1) of the directive is intended to enable the worker actually to take the leave to which he is entitled.
60 Furthermore, account must be taken of the fact that, under Article 7(2) of the directive, the minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.
61 A regime such as that referred to by the questions at issue may lead to situations in which, without the conditions laid down in Article 7(2) of the directive being met, the minimum period of paid annual leave is, in effect, replaced by an allowance in lieu.
63 It follows from all the foregoing considerations that the reply to the first question referred in each of Cases C-131/04 and C-257/04 and to the fourth question referred in Case C-257/04 must be that Article 7 of the directive precludes the payment for minimum annual leave within the meaning of that provision from being made in the form of part payments staggered over the corresponding annual period of work and paid together with the remuneration for work done, rather than in the form of a payment in respect of a specific period during which the worker actually takes leave.
66 in that situation, Article 7 of the directive does not preclude, as a rule, sums additional to remuneration payable for work done which have been paid, transparently and comprehensibly, as holiday pay, from being set off against the payment for specific leave.
67 However, the Member States are required to take the measures appropriate to ensure that practices incompatible with Article 7 of the directive are not continued.
68 in any event, in the light of the mandatory nature of the entitlement to annual leave and in order to ensure the practical effect of Article 7 of the directive, such set-off is excluded where there is no transparency or comprehensibility.
69 The answer, therefore, to the second question referred in Case C-131/04 and the third question referred in Case C-257/04 must be that Article 7 of the directive does not preclude, as a rule, sums paid, transparently and comprehensibly, in respect of minimum annual leave, within the meaning of that provision, in the form of part payments staggered over the corresponding annual period of work and paid together with the remuneration for work done, from being set off against the payment for specific leave which is actually taken by the worker.