A recent opinion issued by the Advocate General of the Court of Justice of the European Union (CJEU) is set to have an impact on the issue of holiday pay for workers.
It deals with the case of a worker who, whilst not an employee, still has a right to national minimum wage and paid holiday.
The opinion in the CJEU case (King v The Sash Window Workshop) focused on accrued but untaken holiday pay by a salesman who had worked for the business for 13 years on a commission only basis.
The company initially claimed Mr King was self-employed and therefore wasn’t entitled to paid leave. But the opinion said, as a worker, he should have received paid leave. It also declared that if a worker doesn’t take the leave they are entitled to because their employer does not pay them, it will carry over to subsequent years.
The payment in lieu for untaken holiday entitlement should cover the full period of employment until termination of the employment relationship and that means employers could face a hefty bill in back dated holiday pay when someone leaves.
A worker doesn’t even have to ask to take their leave before being able to establish whether they are entitled to be paid for it, because the risk of not being paid for the leave would be a deterrent to them taking it.
Our message to employers is to ensure you correctly classify the people working for you so you can ensure they receive the correct rights depending on their status.
The opinion from the Advocate General of the CJEU was non-binding but will certainly impact on future decisions as the CJEU normally follows the opinion handed down.
If you have concerns over the legal status of employees or workers and questions regards Holiday Pay please contact Tracy Worthington: T.Worthington@fbcmb.co.uk or 01902 392476. Alternatively, visit our Employment Law & HR services.