Holiday Pay

Claim for holiday pay

A recent ruling by the Court of Justice of the European Union (CJEU) looks set to have huge financial ramifications for UK businesses with regards to holiday pay.

The case of King v Sash Windows Workshop involved a self-employed sales person whose contract was silent on paid leave and Sash, equally, did not pay Mr King whenever he did take leave. When Mr King was dismissed aged 65 he sought to have all of his accrued holiday paid to him, among other things.

The Employment Tribunal ruled in Mr King’s favour, concluding that he had worker status, however, the Employment Appeal Tribunal did not and referred to section 13(9) of the working time regulations that clearly states that holiday is lost if not taken within the holiday year that it is due.  The case did not stop there! It reached the Court of Appeal who referred the case to the CJEU who ruled that where an employer has not provided a worker with paid leave, the right to paid leave carries over until he has the opportunity to use it and on termination of employment the worker has the right to be paid in lieu for the leave that remains outstanding.  The bombshell is in the fact that Mr King’s claim for his backdated holiday pay spans the duration of his 13 years service with the company!

As the working time directive only allows for four weeks annual leave, the 1.6 weeks implemented under the working time regulations does not apply.

This ruling will no doubt have an impact on the Deduction from Wages (Limitation) Regulations 2014 which limited backdated holiday pay claims to two years maximum arising from the Bear Scotland case.  Also, it will have an impact on those who work under the ‘gig economy’ because of the never-ending disputes over ‘worker status’.

The case will now return to the UK courts to decide how this ruling will be implemented into UK Law.

If you are unsure about the status of staff that you employ please contact the Qdos advice line where one of our consultants will be happy to assist or visit HR Outsourcing.

 

See here for more on … Annual leave and holiday entitlement

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