Holiday pay update
Natalie Ruane explains the decision in King v The Sash Window Workshop, which considered holiday pay entitlement carried over subsequent years.
In the latest case of King v The Sash Window Workshop, the Advocate General has considered whether a worker’s paid holiday entitlement carries over to subsequent years if he does not take the leave because the employer refuses to pay them.
Mr. King was employed as a commission only salesman by The Sash Window Workshop Ltd, from June 1999 to October 2012 until he reached the age of 65. During that time, he generally took either three or four weeks annual leave per annum and the leave was always unpaid.
Mr. King claimed at the employment tribunal he would have taken all of his annual leave during each year if Sash Windows had been willing to pay him for it.
He successfully claimed for both the unpaid leave he had taken and the accrued but untaken annual leave in each leave year of his employment. Sash Windows appealed against the award of holiday pay in relation to accrued but untaken annual leave.
The first-tier tribunal held that Mr King was a worker. He was entitled to bring a complaint for unpaid holiday pay and he was awarded a holiday pay award of £9336.73.
Sash Windows appealed this decision stating that Mr. King’s payment was prevented by circumstances beyond their control. The Workshop argued that no unlawful deduction of wages was made and Mr King simply continued working and made no attempt to use the annual leave at the time.
This argument was rejected by the Employment Tribunal. It was held that an employee who is unable or unwilling to take holiday for other reasons which are beyond their control e.g. not be paid for leave so they cannot afford to take it, may be entitled to carry-over the holiday entitlement. The Working Time Directive confirms that every worker is entitled to paid annual leave.
The case has gone on appeal to the Court of Appeal and the Court of Appeal has asked for a preliminary ruling from the European Court of Justice. As part of this, the Advocate General has given a non-binding ruling that a worker’s paid holiday entitlement can carry over to subsequent years, where a worker does not use their entitlement to paid holiday because they would not be paid for them.
Under those circumstances the worker can claim that he was prevented from exercising his right to such paid leave.
That right to the paid leave then carries over until the worker has had the opportunity to exercise it – in this case that had not happened by the time his employment terminated so he could claim it all then. The Advocate General has set out that the worker does not have to ask to take the leave first because the risk of not being paid for it would be a deterrent to taking it.
As the European Court more often than not follows the Advocate General’s opinion, there is a good chance that this ruling may well become the final decision reached by the Court and passed back to the Court of Appeal.
There is usually a 3-month time limit for presenting a complaint of unlawful deduction of wages, but as Mr King had suffered a ‘series of deductions of payments’ the time started running from the ‘last deduction or payment in the series’.
For more advice on holiday pay please contact Natalie Ruane on firstname.lastname@example.org or on 01228 552222
About the author
Natalie is a Partner and leads the Employment Law & HR team and specialises in education.