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Holiday Pay Entitlement Latest Update

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The case of King v The Sash Window Workshop Ltd [2017] has addressed another important topic with regard to holiday pay entitlement. The individual concerned, who was treated as self-employed, was given the opportunity of becoming an employee, but he declined to take it. Consequently, as he was deemed to be self-employed, he was not eligible for paid annual leave and had to take time off unpaid.

Deciding that he was actually a worker, The Employment Tribunal, stated that he was entitled to paid annual leave. The question of how much back-pay he could claim with regard to unpaid annual leave was then considered.

The statutory limit on the amount of holiday back-pay able to be claimed is capped at two years’ worth of underpayments. In addition, a claim must be brought within three months of the last period of leave not being paid. Thus, if the gap between periods of leave was more than three months, the Claimant in this case would have lost the ongoing right to claim unpaid leave.

The case was referred to the Court of Justice of the European Union. In advance of the ruling, the Advocate General has given his opinion which is usually followed by The Court of Justice although this is not mandatory.

According to the Advocate General, the limit on claiming unpaid leave should not apply if the worker has been restricted or deterred from taking the leave. This situation should be treated differently to one in which a worker is given leave but is not paid correctly.

As not paying the leave is a deterrent to taking it, the Advocate General’s opinion was that there should be no limit on the length of time for which back-pay could be claimed; and the three month time limit on bringing a claim would only start once leave is permitted but not paid or on termination.

We will update you once the Court of Justice of the European Union confirms its decision.

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If you have any questions, please contact Sarah Tahamtani on 0113 336 3314 or via email sarah.tahamtani@clarionsolicitors.com.

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