Holiday Pay – Discussions continue

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absence management

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long-term absence

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Holiday Pay

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At the moment in this country you cannot carry holiday over from year to year unless for special reasons, such as long-term illness or as stipulated in the employment contract. This is defined by Regulation 13(9) of the Working Time Regulations (WTR). However, this month the European Court has suggested that holiday should be allowed to be carried over, if it is unable to be taken, until a time when it can be taken. It also suggested that upon termination payment should be made in full for any outstanding holiday regardless of time-lapse.

Current legislation

Back in 2012 it was decided by the UK Court of Appeal in NHS Leeds v Larner, that if a worker is prevented from taking their holiday through illness in one year they must be able to carry it over.

In KHS v Schult 2012 the CJEU ruled that holiday must be taken within 15 months or it would be forfeited despite long-term illness.

The Working Time Regulations state that holiday entitlement cannot be replaced by a payment in lieu except when employment is terminated. This was always to encourage employees to take holiday for their wellbeing.

Following the holiday pay case of Fulton v Bear Scotland it was deemed that from 8 January 2015 claims for holiday pay could not go back more than two years from the date of issue and must be made within three months.

C. King v The Sash Window Workshop Ltd June 2017

The claimant was a salesman who had worked on commission and had been classed as self-employed. His contract with the company did not mention paid leave.  At an employment tribunal after dismissal, it was deemed that he should have been classed as an employed worker, despite rejecting the offer of employment and therefore was entitled to holiday pay. He applied for holiday to be paid for the year he left and the whole period of his employment, stating he had not been able to afford to take holiday. Following Fulton v Bear Scotland he should only be able to claim for up to two years, however the Advocate general said otherwise.

The Advocate General of the CJEU, contradicting previous rulings, advised that it was acceptable for the total amount to be carried forward and therefore claimed. They said that if a worker does not take holiday because it will be unpaid, this is classed as being ‘prevented’ from taking it and the right to take the holiday can therefore be carried over.

Everyone is watching this case now with a keen eye to see if the court will apply the Advocate General’s opinion. If they do it could open the flood gates for self-employed workers to claim holiday pay and for holiday pay upon termination to go back for the length of employment.


 
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