Enter your details below...

Motor Trade Legal News

Holiday pay - Update

The European Court of Justice (CJEU below) has issued an important case on the issue of holiday pay. A case which employers in the motor industry need to take into account.

In King v Sash Windows, Mr King was believed to be self-employed and his employer did not therefore grant him any paid holiday. He brought a claim looking for over 24 weeks of holiday that he had accrued over many years, but not taken either because he was not allowed it or not paid it throughout his time with Sash Windows. The employer defended the case on the basis that under the Working Time Regulations 1998, if paid holidays are not taken in a leave year, then they are lost.

The CJEU in an important Judgment disagreed and have effectively held that if a worker is prevented from taking paid holiday because the "employer" won’t grant the paid holiday they are being prevented from exercising EU rights and cannot be stopped from bringing a claim just because a new holiday year starts. Insofar as UK Regulations say workers lose that right, they are incompatible with EU law and must be disregarded.
More importantly the CJEU has held that, on these facts, when an employer fails to grant paid holiday to workers they should not be able to benefit from the restrictions on time limits of how much can be carried over. It has also cast further doubt on the EAT’s decision in Bear Scotland v Fulton which has suggested any 3 months break in unpaid EU holiday leave could render the period before the 3 month break out of time.

The case is not suggesting that where employees or workers have been granted paid leave, but have simply not taken it in the particular leave year, would be able to make similar claims. The case should however be of particular concern to employers who are operating with people they deem to be self-employed and the CJEU appear to be saying that, where people are found to be workers or employees and have been denied EU rights and there shouldn’t be limitations on the claims they can bring in terms of going back in time. Accordingly, it now seems likely they can accumulate large claims, going back many years.

As ever, holiday pay is a rapidly developing area of law so watch this space for future developments.