The Court of Justice of the European Union (“CJEU”) recently considered whether a worker who did not take holiday because he was not paid for periods of annual leave was in fact entitled to 13 years’ worth of unpaid holiday pay.
EU Law Holiday Entitlement and Unpaid Annual Leave
This landmark decision in the case of King vs. The Sash Windows Workshop Limited could have wide ranging consequences for workers and companies where there is a dispute over employed or self-employed status. Mr King worked for the company on the basis of a “self-employed commission-only contract” from 1st June 1999 until dismissal on 6th October 2012 and was paid on a commission-only basis under this contract. When Mr King took annual leave it was unpaid, and in the period from 1999 to 2012 he accrued 24.15 weeks leave which he didn’t take because it was unpaid.
After retiring, Mr King issued an Employment Tribunal claim against his employer for both:
- holiday pay for holidays he didn’t take because they would have been unpaid
- holiday pay for holidays he did take, but for which he was not paid (£27,000)
The original Employment Tribunal decided that he was a worker, not self-employed, and was therefore entitled to holiday pay. The UK Working Time Regulations of 1998 say that if holiday is not taken in a holiday year then it is lost and the Sash Windows Workshop used this in their appeals.
Ultimately however this was overruled by the CJEU who said that by preventing the granting of paid holiday the employer had stopped Mr King from exercising his EU rights. He should therefore be entitled to all of his EU holiday rights (20 days per year) all the way back to when he started work. The EU Working Time Directive was introduced in 1996 so this would have been the earliest date he could have gone back had he been there long enough.
While Britain is still a member, EU Law Holiday Entitlement applies
This case demonstrates how seriously the EU courts take the right to paid holiday for EU citizens. There have been a number of UK cases over holiday pay recently and they have generally been limited to looking back to the holiday year or even as little as 3 months. The CJEU made a strong point in this case that there is no limitation on claims, and while we are still a member of the EU there is now potential for a large number of high value holiday pay claims. In the Uber case for example there are around 40,000 drivers who have recently been found to be workers which raises the stakes in their appeal to a much higher level.
If you use self-employed staff in your business and you are concerned about whether you should be giving them holiday pay then we would be happy to talk through the options with you. Contact us on 01245 893400 and book a FREE 30 minute consultation with one of our expert employment law solicitors.
The Backhouse Solicitors Property Team
Tel: 01245 893400