The Court of Justice of the European Union has ruled that a worker claiming holiday pay under the European Working Time Directive (WTD) is not precluded from doing so by the fact that they have not previously exercised the right to take leave and that there should be no cap as to how much time a worker can claim.
The case involved a claim by Mr. King for compensation for holiday pay and pay in lieu of accrued but untaken annual leave for the entirety of his engagement with Sash Windows following the end of his engagement with the company in 2012. Mr. King was engaged on a ‘self-employed commission-only contract’ to work as a window salesman for Sash Windows. In 2008, he rejected the opportunity to carry on his engagement as an employee. Over the course of the thirteen years he worked for the company, Mr. King was paid on commission and took various amounts of unpaid leave annually. Upon his retirement Mr. King sought compensation for his annual leave. Sash Windows however rejected his claim on the grounds that he was engaged as a consultant and as such was not entitled to statutory holiday pay under the Working Time Regulations (WTR), which implement the WTD in the UK.
The case went before the UK Employment Tribunal which ruled Mr. King to be a ‘worker’ within the meaning of the WTD and as such entitled to holiday pay under WTR. This decision was appealed up to the Court of Appeal at which time the case was referred to the CJEU for a preliminary ruling.
In the thirteen years Mr. King worked for Sash Windows he was never afforded the opportunity to take ‘paid’ statutory leave, nor however had he ever sought ‘paid’ leave. Thus one of the questions before the CJEU was whether it is compatible with EU law for a worker to be required to first take annual leave before being be able to establish their entitlement to be paid. Questions stemming from this consideration were whether a worker’s entitlement to claim compensation can carry over until such time as they have the opportunity to exercise it and, if so, is there any time limit to the ability to claim like that of the established 18 month carry-over in cases relating to sick-leave.
Stressing the significance of the right to four weeks of paid leave throughout the EU, the CJEU held that “in the case of a dispute between a worker and his employer as to whether the worker is entitled to paid annual leave [under the WTD], they preclude the worker having to take his leave first before establishing whether he has the right to be paid in respect of that leave”. In determining whether or not claims should be subject to a time limit, the Court held that the WTD must be interpreted as precluding “national provisions or practices that prevent a worker from carrying over and, where appropriate, accumulating until termination… paid annual leave rights not exercised in respect of several consecutive reference periods because his employer refused to remunerate that leave”. This case was distinguished from those cases relating to long-term sick leave as they also took into account the interests of employers ‘faced with periods of absence’ and subsequent “difficulties in the organisation of work”. In the case of Mr. King however the employer “was able to benefit… from the fact that he did not interrupt his professional activity in its service to take annual leave”.
The case will now return before the Court of Appeal to be decided upon its facts.
Click here for the judgment in King v. Sash Windows Ltd.