ECJ considers holiday carry-over beyond sick leave

The Sash Windows judgment could be the highest-profile employment ruling to come out of the ECJ in Luxembourg in the run-up to Brexit. Photo: Action Press/REX/Shutterstock.
The Sash Windows judgment could be the highest-profile employment ruling to come out of the ECJ in Luxembourg in the run-up to Brexit. Photo: Action Press/REX/Shutterstock.

A worker’s annual leave can be carried over into the following holiday year if sickness absence prevents holiday from being taken. But what if a worker is prevented from taking leave for other reasons beyond their control?

A European Court of Justice (ECJ) case heard on 29 March has the potential to extend when employers must allow workers to carry over holiday.

In Sash Window Workshop Ltd and another v King, Mr King was a commission-only salesperson who worked for the window company for 13 years, purportedly on a self-employed basis.

His annual leave was unpaid. Some years, he took his full annual leave entitlement, but there were a number of years in which he did not request all of it.

He tried not to take too much holiday because, if he was not working, he would not get any commission.

When Mr King’s work with the company ended, he brought an employment tribunal claim for, among other things, a series of unlawful deductions from wages for holiday not taken.

The employment tribunal accepted that both the company and Mr King had mistakenly believed that he was self-employed. He was in fact a worker.

The tribunal found that a worker who is unable to exercise the right to take annual leave is entitled to carry that leave forward into the next leave year, even though he or she has made no request to do so.

The employment tribunal accepted that the case law on holiday carry over relates to sick leave, but saw no difference in principle between being unable to take paid leave through sickness and the circumstances in Mr King’s case.

The Employment Appeal Tribunal (EAT) agreed that, in theory, sick leave may not be the only circumstances that would prevent a worker from taking annual leave, thus entitling the work to carry over annual leave.

However, the EAT sent the case back to the tribunal to consider if Mr King was truly “unable”, for reasons beyond his control, to take annual leave and as a consequence did not exercise his right to it.

This EAT decision was appealed to the Court of Appeal, which referred the case to the ECJ. The ECJ hearing took place in Luxembourg on 29 March.

Commenting on the case’s importance, Mr King’s solicitor, Clare Gilroy-Scott of Goodman Derrick LLP, commented:

“The European court explored the issues relating to workers’ entitlements to holiday pay and payments on termination under EU law.

“The case raises specific issues faced by many UK workers who are incorrectly treated as self-employed.

“The question being whether the burden should fall to the employer to assess worker status properly, or face possible consequences upon termination, or whether it is for the employee to enforce their rights in a court or tribunal at the time, at the risk of job security.”

Mr King’s barrister, James Williams of Henderson Chambers, explained the European Commission and UK Government’s roles in the hearing:

“As expected, the submissions of the European Commission generally agreed with those advanced by Mr King, while the UK Government broadly agreed with the submissions advanced by the employer.

“One important point made by the commission was that, as the [Working Time] Directive is a health and safety measure, the burden of ensuring compliance should fall on the employer.

“It was emphasised for Mr King that the availability of a payment in lieu on termination is necessary to ensure the effectiveness of the Directive – otherwise employers would be incentivised to stop their staff from taking paid leave.”

The Advocate General indicated that he would deliver his non-binding opinion on 8 June.

No date has been set for the publication of the final binding decision, which could be the highest-profile employment ruling to come out of the ECJ in the run-up to Brexit.

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