Can a worker carry over paid annual leave even if they have not had to the opportunity to take it? Yes, ruled the Court of Justice of the EU (CJEU) in a recent case.
King v Sash Windows
Facts of the Case
Mr King joined The Sash Window Company in 1999 and was employed on a self-employed, commission-only contract as a sales person. During his time with the company he took holidays each year but was not paid whilst on holiday as his employer considered him to be self-employed and not entitled to holiday.
When Mr King left the company in 2012 he brought a claim for a series of unlawful deductions from his wages during the time he had worked there.
The Employment Tribunal ruled that he was a “worker” for the purposes of UK working time legislation and therefore entitled to paid annual leave.
His employer argued that the Working Time Regulations 1998 provide that if paid holiday is not taken in a leave year, then it is lost and that therefore Mr King could not claim holiday pay from previous holiday years.
Decision
The European Court of Justice disagreed.
The Court stated that where employees have been prevented from taking their leave (as in this case), the entitlement to leave must be carried over and not lost. Employers who do not allow employees to take leave should not be allowed to benefit from use it or lose it rules in this way.
Employees who have not been allowed to take holiday could therefore have potential claims going right the way back to 1996 when the original Working Time Directive came in to force.
Comment
Self employed contractors who are actually found to be workers will be entitled to claim many years of backpay for untaken holiday entitlements. This is likely to be very significant in sectors where the use of the self employed contractor label has come under scrutiny.
The value of claims could potentially be significant – 4 weeks’ pay per worker per year.
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