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Employment status disputes could lead to holiday pay headache

23 June 2017 #Employment


If the Court of Justice of the European Union (CJEU) follow the Advocate General’s recent opinion on holiday entitlement, for those wrongly classified as self-employed, businesses who dispute entitlement to paid annual leave could face large pay outs.

In King v The Sash Windows Workshop Ltd, Mr King had worked for Sash Windows for 13 years as a commission-only salesman. Sash Windows incorrectly regarded him as a self-employed contractor and so refused to pay him for holiday.  Mr King did not attempt to take holiday, knowing that he would not be paid for this, however, he pursued a claim for unpaid holiday following termination of his engagement. 

The Advocate General’s opinion on the case (which is issued before the formal Judgment of the CJEU) is that Mr King had been deterred from exercising his right to holiday as he knew he would have to take legal action to be paid. Additionally, there should be no limit on how far back such a claim could go where an employer did not provide employees the opportunity to take holidays, meaning holiday pay claims could cover the entire period of employment.

This opinion is not legally binding, so we need to await the decision of the CJEU. The opinion concerns individuals who do not take annual leave because they do not believe it will be paid, which is common with the “gig-economy”. Recent cases have found various workers in the “gig-economy” not to be self-employed, therefore entitled to holiday pay. A key implication of the ruling (if it follows the Advocate General’s opinion) could be that even if holiday pay is paid going forward, an employer may still be liable to pay for untaken holidays during the entire employment period. We await the CJEU’s ruling with interest.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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Michael Hibberd

Michael Hibberd
Senior Solicitor

E: mhibberd@clarkslegal.com
T: 0118 953 3905
M: 0779 900 7511

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