Holiday Pay related tribunal claims: what you need to know

Over the last 11 years, the judgements made by European Court of Justice have increasingly been directed towards the view that paid holiday is a central right for European workers.

The recent ruling reached in King V The Sash Windows Workshop Limited echoes the same sentiment. The decision held that:

A worker who does not take their paid annual holiday because the employer refuses to pay should carry their entitlement over to the next leave year, rather than lose it.

EU law requires that a worker knows that he is going to be paid before he takes leave

A worker can carry over and accumulate untaken leave until the end of the employment relationship

The case reinforces the importance of properly establishing employment status, particularly the distinction between ‘self-employed’ and ‘worker’. Notably, the court stated that any employer who does not allow a worker to take annual leave must bear the consequences, and was unsympathetic of the defence that Mr King was presumed self-employed and self- elected to remain this way.

The employer argued that the Working Time Regulations 1998 provide that if paid holiday is not taken in a leave year, then it is lost. The court’s ruling against this opens up, on the face of it at least, a landscape in which workers can claim leave forever and a day back. Business who rely on gig economy workers should be especially wary of this future.

More broadly, this case is an important reminder to all employers that upholding the employment rights of all individuals is of the upmost importance for both long term cost control and good reputation – and this begins with the correct identification and enforcement of employment status.