In King v The Sash Window Workshop Ltd, the Advocate General has held that workers who are not given paid holiday are to be treated as being prevented from taking it and can carry over their accrued holiday until they are given the right to take paid holiday or, failing that, receive payment for it when they leave.
In King v The Sash Window Workshop Ltd, Mr King was a salesman for Sash Window Workshop Ltd (“Sash Window”), paid entirely on commission for 13 years. He was categorised by Sash Window as self-employed and therefore, he was not paid for annual leave taken. Whilst he did take some unpaid holiday during the year, this was less than his statutory entitlement because he could not afford it. In 2008, he was offered an employee contract but this offer was turned down. He was dismissed from Sash Window after his 65th birthday.
At the Employment Tribunal (“ET”), he claimed his accrued holiday pay for the current year, payment for his unpaid holiday pay for previous years and payment in lieu of untaken leave that he had accrued in previous years. At the ET, he won all three claims, and the ET saw no difference between a worker being unable to take paid leave due to sickness and a worker being denied paid leave.
The Employment Appeal Tribunal (“EAT”) agreed with the Claimant that a worker may be able to claim for carried over holiday pay where a worker is unable or unwilling to take holiday for reasons which are beyond his control. This extended the decision in Larner (an earlier Court of Appeal (“CA”) decision) which enables holiday to be carried over due to long-term sick leave.
The CA made a reference to the Court of Justice of the European Union (“CJEU”) for a preliminary ruling on whether, where there is a dispute between an employer and a worker as to whether the worker is entitled to annual leave with pay, the worker has to take the leave first before establishing whether he is entitled to pay. Further, can annual leave be carried over where a worker is unable or unwilling to take leave which he would otherwise take if he was paid for it?
Advocate General Tanchev (“AG”) gave his opinion on the issues as follows:
- Employers are to provide “adequate facilities” to workers to exercise their right to take holiday e.g. a specific contractual term concerning paid annual leave. Workers should not be compelled to take legal action in order to establish this right.
- If a worker does not take all or some of the annual leave to which he is entitled in the leave year, where he would have done so if the employer had paid him for it, then the worker is being “prevented” from taking his paid leave and he can carry over this right until he is given the facility to take the paid leave, or he leaves his employment, whichever is earliest.
- On termination, a worker is entitled to a payment in lieu of annual leave that has not been taken for the whole of his employment. Only once the worker has been given the facility to take paid leave, can the national restrictions on claims be applied.
- A worker does not have to take leave first before being able to establish whether he is entitled to be paid for it.
Alex Payton comments:
“Whilst the Advocate General’s opinion is not binding on the CJEU, if it is accepted, then this case establishes that a worker can claim holiday pay without trying to take leave if it is clear they do not get paid holiday. Such payment could be for the whole of their employment. This is different to a situation where a worker takes holiday and is not paid for it. In that case, a claim would need to be brought within 3 months.”
If you require further assistance, please contact a member of the team.