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Newsflash December 2017: Holiday Pay

Posted on Thursday 30th Nov 2017

We hardly seem to get a break from holiday pay cases. The most recent one, a Court of Justice of the European Union judgment handed down 29 November 2017, has far reaching implications. The case is King - V - Sash Windows.

What, for ease of expression, we call Mr King’s ‘employer’, believing that Mr King was self-employed for the thirteen years he worked for him, did not give Mr King paid holiday. Mr King sought back pay to 1999, the start of his employment.

Mr. King succeeded at the ET but failed at the EAT. The Court of Appeal then referred the matter to the European Court of Justice who agreed with Mr King. It held that if workers are prevented from taking their paid holiday because the employer refuses to grant the paid holiday or simply does not consider it, 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, and insofar as the UK Regulations say that the worker loses the right, they are incompatible with EU law and must be disregarded.

The back pay claim can go all the way back to 1996, when the original Working Time Directive came into force.

Companies who make use of ‘self-employed' contractors need to be particularly wary. If it turns out that these contractors are 'workers' and that is not a hard argument to mount successfully they could find themselves facing very substantial holiday pay bills, dating back 20 years. That is 80 weeks' pay per worker. Only the 4 weeks' European Directive holiday (rather than all 5.6 weeks of UK holiday) count.

More troubling though is the impact this ruling may have on the EAT's decision in Bear Scotland v Fulton, on which we have reported several times. This judgment held that tribunals cannot award backpay for underpaid holiday leave where there has been more than a 3-month break. As one eminent QC puts it,

“Neither the Regulations, nor that decision can withstand the decision in King for cases involving holiday which is not taken because it was not paid. However, King may be the crowbar for lawyers to argue that, in the case of underpaid holiday rather than non-paid, the same principle applies and both the Regulations and Bear Scotland breach equivalence and effectiveness”.

                                                                                                                                                                                                           Caspar Glyn QC Cloisters Chambers

During the period of Tribunal fees, holiday pay cases had reduced drastically to the point where they were practically extinct. With fees now gone and armed with this new “crowbar” we expect there will be surge in holiday pay claims.

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