BACK-DATED HOLIDAY PAY CLAIMS FROM MISCATEGORISED WORKERS
The European Court of Justice (ECJ) has ruled in the case of King v Sash Windows that workers denied the opportunity to take paid holiday because they were wrongly categorised as self-employed should be able to back-date claims for holiday pay right back to the start of their engagement.
Mr King was believed to be self-employed and Sash Windows therefore did not give him paid holiday. An employment tribunal held that Mr King was a worker and as such he was entitled to 5.6 weeks paid annual leave. Sash Windows argued that the Working Time Regulations 1998 provide that if paid holiday is not taken in a leave year, then it is lost.
The ECJ disagreed and held that if a worker is prevented from taking their paid holiday because the ’employer’ won’t grant the paid holiday; they are being prevented from exercising EU rights. As such, they cannot be stopped from bringing a claim just because a new holiday year starts.
The ECJ then had to decide whether there was any limit to how long accumulated holiday pay could be carried forward. Its answer was that any legislation which prevented the worker from carrying over and accumulating such rights in these circumstances would be incompatible with the Working Time Directive. In Mr King’s case, since his rights as a worker had not at any time been recognised, that meant that he should be able to carry forward accrued holiday pay until the termination of his engagement with Sash Windows.
Although the full implications of this decision will take a while to filter through, it considerably increases the risks companies are exposed to if they miscategorise the individuals they engage as self-employed when they are in reality workers.
If you engage individuals on a self-employed basis and are unsure as to whether they fall under the category of a worker then please call Practical HR Ltd on 01702 216573 or email email@example.com for advice.
The content of this blog is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice.