This year will see the 20th anniversary of the Working Time Regulations (WTR) coming into force, and sadly I am old enough to remember their introduction. Back in the day when I was producing advice notes for clients on, what was then the new law, the challenging bit for people to get their heads around related to the rules on rest breaks, working time etc. By comparison, the holiday pay aspect seemed a relatively straightforward part of the law but anyone who has followed the developments in relation to sick pay, overtime etc. will know that just as much case law has been generated around the issue of holiday pay as any other aspect of this legislation.
The most recent twist in the story relates to the common use of ‘use it or lose it’ provisions. You’re all used to the idea now that we allow somebody to carry forward unused holiday if they were off on long term sick or if they were on maternity or paternity leave but generally everybody else has to use their holiday in the holiday year unless contractually there are one of those provisions entitling somebody to e.g. carry forward five days.
The case of King v The Sash Window Workshop Ltd involved a self-employed contractor who was a commission only salesman. He had worked from June 1999 to October 2012 without either taking or being paid any leave. The organisation engaging him argued that he had taken some leave, but he chose not to take any more. In Regulation 13(9) WTR, leave may only be taken in the year in respect of which it’s due and it can’t be carried forward, so the employer argued that his claims were time barred and argued that he couldn’t claim any deduction from his wages because he had obviously been paid for the work that he had done.
The Court of Appeal referred the matter to the Court of Justice of the European Union as regards whether an individual needs to have taken leave to bring a claim for payment, and whether any leave that was not taken could roll forward, and if so for how long. It ruled there is no need for a worker to have taken leave before they’re entitled to claim damages for non-payment, as to require a worker to take unpaid leave and then bring a claim would be incompatible with the Working Time Directive that sits behind our WTR. Interestingly they also found that in all situations where a worker has been unable to take leave, through no fault of their own, the leave will roll over indefinitely until they’re able to take it, until termination of employment if necessary, at which point they would be entitled to payment in lieu.
Initially everyone is spotting the relevance of this case to self-employed contractors; the Ubers of this world have even more to now worry about. However, doesn’t this apply to us all? Are you making sure that your employees are taking their holidays? If not, potentially there is a liability building up and if we have refused to allow people to carry holiday forward when they haven’t take it (the use it or lose it rule) then again there may be a liability.
Could someone turn around now and give you notice that they were going to take a considerable period of time off if they’ve got lots of holiday that they’ve not taken previously?
I’m not going to suggest that you rush out now to change your contracts of employment but if these issues are raised by an employee don’t be surprised.