20 year back pay award for accrued holiday

Jan 2018

By Lucy Bloom of Osborne & Wise

Firstly… A Happy New Year from all the team!

Workers incorrectly labelled as self-employed may be able to claim back pay for unpaid holiday pay, dating back 20 years, once their ‘worker’ status is established.

King -v- The Sash Window Workshop Ltd and another, Mr King’s ‘employer’ did not give him paid holiday, given that it had classified him as being self-employed. However, Mr King was found to be a ‘worker’ and therefore entitled to 5.6 weeks’ paid holiday per year. Whilst Mr King took some holiday during his 13 year engagement, he did not take his full entitlement given that this was unpaid. The European Court of Justice held that Mr King was entitled to be paid on termination for any periods of holiday that had accrued during his engagement. This approach would apply where he had been discouraged from taking that holiday because it would have been unpaid.

This case will potentially have huge financial implications for organisations who have misclassified individuals as being self-employed, rather than workers. Such organisations could find themselves liable for having to pay workers on the termination of their engagement for not only the unpaid holiday that they have taken, but also for holiday that they have been discouraged from taking, due to it being unpaid. Most importantly, given this case suggests an ongoing back pay period, theoretically any claim for unpaid holiday pay could go back 20 years to when the Working Time Regulations were initially introduced.