Forcing workers to take holiday before establishing whether they will be paid for it is incompatible with EU law, the European Court of Justice (ECJ) has said, publishing an opinion in the long-running King v Sash Window Workshop case today.
The advocate general’s opinion means a UK salesman could be entitled to claim compensation after he was unable to take his full holiday entitlement over a 13-year period.
Mr King had worked as a salesman for the Sash Window Workshop since 1999. He was paid on commission and his contract with the company did not mention paid leave. Although he did take time off during his tenure with the company, typically a couple of weeks a year, he was not paid during his holiday.
In 2008, the Sash Window Workshop offered King an employee contract, but he opted to stay self-employed and continued to do so until he was dismissed by the business in October 2012, on his 65th birthday.
In December 2012, King brought a case regarding his dismissal, including a complaint that he was entitled to pay for holiday he had not taken, to a UK employment tribunal, which found that he had worker status. As a worker, King was entitled to paid holiday under the EU’s Working Time Directive.
After the Employment Appeal Tribunal decided a worker was entitled to carry over paid holiday, or receive it in lieu on termination, where they had been unwilling or unable to take their holiday for reasons beyond their control, the case was appealed to the Court of Appeal.
The Court of Appeal asked the ECJ how the directive should be interpreted in this case, particularly if – in situations where there is a dispute between the worker and their employer as to whether the worker is entitled to paid leave – the worker should be required to take the leave before it is established whether or not they will be paid for it.
In his opinion on the case, Tanchev decided it would not be compatible with EU law to require a worker to take leave before they knew if they would be paid for it.
Tanchev also said that, where an employer had not provided a worker with the leave they are entitled to under law, that worker’s right to paid leave can be carried forward until a time when it would be reasonable for them to take it. Where the worker’s employment is terminated before the leave is taken, the worker has a right to payment in lieu for any leave outstanding.
Today’s opinion from the advocate general is not binding. However, it could be used by the ECJ’s judges, who are now deliberating their decision and will give their ruling at a later date. After this, the case will return to the UK’s Court of Appeal, which will decide what should be done in King’s case, in light of what the ECJ has said.
“Many matters will remain to be grappled with by the tribunals and courts,” Barry Stanton, head of employment law at Boyes Turner, told People Management. “Will cases be seen as deductions from wages claims or as claims based upon a refusal to permit the employee to exercise the right to paid leave? The time limits for bringing claims and the period of time over which claims can be backdated will also need to be resolved.
“While most businesses won’t be affected, those that engage workers on a commission-only basis, or on other non-standard contracts, and do not provide for paid holiday, may be hit hard. With so much uncertainty and ambiguity, there will undoubtedly be further litigation.”
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