In the courts: the worker and the 13 years of untaken holiday
This article first appeared in The Lawyer 2b.
On 8 June 2017, the Advocate-General of the European Court delivered his Opinion in a case concerning a UK worker’s 13 year back-dated holiday pay claim: King v The Sash Window Workshop Ltd.
Mr King worked for 13 years for The Sash Window Workshop Ltd (TSWW) and was paid entirely on commission. TSWW incorrectly treated him as self-employed and not, therefore, entitled to paid leave.
He took minimum unpaid holiday each year given the detrimental impact of any absence on his earnings.
TSWW terminated Mr King’s contract when he reached 65. He successfully claimed age discrimination and pay for the holiday he had taken on the basis that he was a “worker” and not self-employed. He also claimed pay in lieu of the holiday entitlement which he had not taken throughout his 13 years and it is this latter point that is before the CJEU.
Right to paid leave
Under the Working Time Regulations 1998 (WTR) – which derive from the EU Working Time Directive – workers, and not just employees, are entitled to 5.6 weeks of leave in each holiday year.
The issue for the CJEU is the effectiveness of the WTR remedy. To claim the pay for leave, he would have to take the risk of taking unpaid leave first and then take proceedings for unpaid wages, a risk exacerbated due to the precarious nature of “worker” status – with no protection from unfair dismissal, and no guarantee of work.
The Advocate-General said that it should not be for a worker to have to take legal action in order to receive pay for leave taken and a worker should be able to carry forward leave entitlement (without limitation in time) during any period when the employer does not provide a “facility” by which the worker can exercise paid leave. In Mr King’s case this means carry-over of annual leave for 13 years and an entitlement to a payment in lieu upon termination.
King v The Sash Window Workshop’s Relevance in the Gig Economy
The Advocate-General noted the “acute social importance” of the issues in Mr King’s case, given the prevalence in the so-called gig economy of what were once atypical working patterns.
“These forms of employment are becoming ever more prevalent because of the provision of services via digital technologies in the age of the internet. Who should bear the risk of non-compliance with the right to paid annual leave when there is no facility in the employment relationship for its exercise, the employer or the workers concerned? Is it compatible with the EU right to paid annual leave for Member State law to first oblige a worker to take leave, before being able to ascertain if the leave will be paid?”
The Opinion provides guidance to the European Court. If followed, any business with workers of marginal or uncertain employment status may face similar claims with profound consequences as workers may wait until the end of employment before claiming paid leave, so as not to risk their job.
This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.