Backdated holiday pay judgment may have implications for thousands of workers

A top European court has backed a holiday pay ruling which may affect tens of thousands of people working in the gig economy.

The European Court of Justice (ECJ) agreed that Conley King, a contractor who worked for a sash window firm, was entitled to up to 13 years’ worth of backdated holiday pay.

It said “a worker must be able to carry over and accumulate unexercised rights to paid annual leave” if they are not allowed to take holidays.

The case centres on a dispute between Mr King and his former employer, and whether his employment contract should have included an allowance for annual leave.

The contract described the window salesman as self-employed, meaning he would not be entitled to basic workers’ rights, such as the minimum wage and sick and holiday pay.

The Sash Window Workshop said Mr King worked “as a self-employed salesman under an arrangement that suited him”.

But a UK Employment Tribunal found that Mr King should have in fact been treated as a full-time worker and therefore was entitled to take paid holiday leave.

The case was taken to the ECJ to establish whether Mr King should be allowed to claim compensation for the whole 13-years of his employment.

The judgment may have serious implications for the gig economy, which employs around five million people in the UK.

What 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 carryover 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.”

For advice on the implications of this judgment please contact Andrew Firman.