05:56, November 29 336 0 theguardian.com

2017-11-29 05:56:04
EU's top court rules workers can claim compensation for untaken holidays

Workers are entitled to paid leave and can claim compensation if they are not allowed to take their holidays, the EU’s highest court has ruled.

In a case involving a UK window salesman, the European court of justice (ECJ) in Luxembourg – whose continuing jurisdiction is vehemently opposed by Brexiters – has reinforced employees’ rights.

The long-running legal challenge concerned a claim brought by the salesman, identified as Mr King, against The Sash Window Workshop Limited. The dispute was over his employment contract, which did not specify if he was entitled to paid leave.

The salesman had been paid entirely on commission and his contract described him as self-employed. A UK employment tribunal subsequently found he should have been treated as a full-time worker.

The case is one of a series that have gone to the Luxembourg court to establish whether businesses operating in the “gig economy” are depriving employees of benefits to which they should be entitled by reclassifying workers as self-employed.

In its judgment on Wednesday morning, the ECJ said: “A worker must be able to carry over and accumulate unexercised rights to paid annual leave when an employer does not put that worker in a position in which he is able to exercise his right to paid annual leave.

“The employer was able to benefit from the fact that Mr King did not interrupt his professional activity … It is for the employer to seek all information regarding his obligations in regard to paid annual leave.

“In the absence of any national statutory provision establishing a limit to the carry-over of leave in accordance with the requirements of EU law, to accept that the worker’s acquired entitlement to paid annual leave could be extinguished would amount to validating conduct by which an employer was unjustly enriched to the detriment of the purpose of that directive, which is that there should be due regard for workers’ health.”

Janes Potts, the head of legal at the law firm Peninsula, which represented King, said: “Employers with self-employed individuals, whether these number in single figures or the thousands, need to seek advice on the real status of their workforce.

“This European decision binds UK tribunals when deciding similar cases. In its current form, the Brexit withdrawal bill maintains European judgments made before the UK’s exit from the EU. However, it does give the supreme court the right to depart from these decisions where it is right to do so. As such, this decision will remain binding post-exit unless a future case proceeds through the domestic courts to the supreme court, where this decision could be departed from.”

Alan Lewis, an employment partner at law firm Irwin Mitchell, said: “Following today’s ruling, businesses with workforces of uncertain or marginal employment status could be facing huge financial liabilities for holiday pay. The European court has made clear its forthright position by stating: ‘An employer that does not allow a worker to exercise his right to annual leave must bear the consequences.’ Gig-economy employers in particular will be affected hugely by the decision.”