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A Change in Approach to Holiday Pay Entitlement for Workers

on Tuesday, 09 January 2018.

A recent European Court of Justice (ECJ) case has confirmed that where workers are denied their right to take paid annual leave, the entitlement carries over indefinitely.

This decision could lead to potentially costly claims against employers, including those operating within the healthcare sector.

The case of King v The Sash Windows Workshop Limited involved a self-employed salesman, Mr King, who worked on a commission only basis. Any annual leave Mr King took during his contract was unpaid and he challenged this at Employment Tribunal (ET). The ET awarded Mr King holiday pay not only in respect of the most recent holiday year, but going back over his entire contract. 

The question of how far back a worker can go when claiming holiday pay in these circumstances was subsequently referred by the Court of Appeal to the ECJ. The ECJ held that the normal limits on carrying holiday over do not apply when an organisation fails to allow workers to take paid annual leave. This means that on the termination of their contracts, workers could be entitled to accrued but untaken holiday accounting for the duration of their contract.

Best Practice

Practices will be aware of the growing body of case law addressing worker rights. This case has now been referred back to the Court of Appeal for a decision on how the decision affects the interpretation of our UK legislation. There is therefore an opportunity now for practices to assess the risk of claims from current and/or former workers for payment in lieu of accrued but untaken holiday where the individual has been prevented from taking paid holiday.

For more information, please contact Gemma Cawthray in our Employment Law team on 0117 314 5266.

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