Employers, their Self-Employed Workers & Holiday Pay
In November 2017, a case was brought to the European Court of Justice, which could cause employers a hefty financial bill in the future.
The case of King v Sash Windows has brought to light that Self-Employed Workers could be entitled to historic holiday pay, backdating as far back as 1996.
Mr King who was a window salesman did not receive holiday pay for 13 years from Sash Windows, as they saw him as self-employed rather than their employee. When the company dismissed him, he took them to a tribunal stating that he was entitled to his holiday payments. He was successful and awarded full compensation. However, his employer had the decision overturned as per the Working Time Regulations Act 1998, which states that if holiday is not taken in its designated year, it is not carried over.
Mr King then took the case to the ECJ, who have stated that this matter is important from a Health & Safety point of view, as workers must be able to recover after working. Employers are not permitted to persuade employees not to take holiday.
As Mr King was prevented from taking holiday by Sash Windows, he was being denied his EU rights. According to UK Regulations, a worker loses the right once the holiday year is up. This causes a clash between UK and EU law.
The Working Time Directive 1996 (amended in 2003) is an EU Directive which gives workers in the EU (therefore the UK), the right to at least 4 weeks (20 days) in paid holidays each year. According to the Directive, if an employee’s job is terminated, he or she is entitled to payment in lieu for holidays that were not taken.
The Working Time Regulations 1998, a UK Regulation states, that if the entitled 5.6 weeks annual leave is not taken in the holiday year, it is lost.
In this instance, the ECJ chose the European Union Directive over the UK Regulation. In Mr King’s case, he is entitled to 4 weeks EU holiday per year, dating back from 2001-2014.
In future, employers who have self-employed workers could be facing bills of 20 years’ worth of 4 weeks, which equals 80 weeks’ pay per worker.
To ensure your paperwork reflects the type of worker you’re employing and to avoid the risk of holiday pay issues further down the line, please get in touch with us on 01206 752100 or email firstname.lastname@example.org.