In King v The Sash Window Workshop Ltd and another (C-214/16), following a referral from the Court of Appeal, Advocate General Tanchev provided an opinion regarding workers’ rights to paid annual leave if they do not take holidays because the leave would be unpaid.
Mr King worked for The Sash Window Workshop Ltd (SWW) as a self-employed, commission only, salesman from the 1st June 1999. There was no right to paid annual leave in his contract.
SWW terminated his contract on the 6th October 2012 and Mr King brought various claims, including for holiday pay.
Employment Tribunal Decision
The employment tribunal accepted that Mr King was a worker under the Working Time Regulations 1998 and that he was entitled to paid annual leave.
Mr King was awarded £27,257.96 in holiday pay.
SWW appealed and the Court of Appeal referred a number of questions to The Court of Justice of the European Union (CJEU)
The Advocate General’s Opinion
In assessing the matter, the Advocate General stated that Mr King was being prevented from exercising his right to annual leave as he was not being paid for taking it.
In turn, the right to paid annual leave carries over until Mr King was able to exercise that right, which in this case was the termination of his contract of employment.
Further, it was noted that payment in lieu for annual leave not taken should cover the full period of employment (not limited to 3 months as per the limit set in the case of Fulton v Bear Scotland).
If the opinion of the Advocate General is followed by the CJEU, which is normally the case, employers may be liable for payments to workers on termination of employment in relation to annual leave not taken because it would not have been paid or untaken for reasons beyond the employees’ control for the entirety of the length of employment.
This would extend the principle established in the Court of Appeal decision of NUS Leeds v Larner, which found that payment in lieu of untaken holiday in previous holiday years was only payable in lieu upon termination in circumstances where an employee is unable to take annual leave in previous years due to sickness.