A Worker has ECJ Decision – Right to Annual Leave Payments

Introduction

In a decision that may have significant, and potentially costly, implications for Irish employers, who have not paid holiday pay to workers that they consider to be self-employed, the European Court of Justice (“ECJ”) has this week ruled that a self-employed contractor was entitled to be paid for outstanding holiday pay stretching back thirteen years (Case C‑214/16).

Background

Mr Conley King worked for Sash Window Workshop Limited (“SWW”) on the basis of a ‘self-employed commission-only contract’ from 1 June 1999 until he retired, on 6 October 2012. Under that contract, Mr King was paid on a commission-only basis. When he took annual leave, it was unpaid.

Upon termination of his employment relationship, Mr King sought to recover payment for his annual leave — taken and not paid as well as not taken — for the entire period of his engagement, from 1 June 1999 to 6 October 2012. SWW rejected Mr King’s claim on the grounds that he had the status of self-employed worker.

Decision

In its original judgment, the UK Employment Tribunal considered that Mr King was a ‘worker’ within the meaning of Directive 2003/88 and that he was entitled to holiday pay claimed. A number of appeals and counter-appeals were made, eventually resulting in the Court of Appeal of England and Wales referring the matter to the ECJ for a preliminary ruling.

The ECJ considered Article 7 of Directive 2003/88 (the “Directive”), which sets out that:

Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice; and
that the minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.

The ECJ confirmed that:
from the very wording of the Directive, that every worker is entitled to paid annual leave of at least four weeks, and that that right to paid annual leave must be regarded as a particularly important principle of EU social law;
awarded up to 13 Years Holiday Pay despite being class as self-employed by the European Court. The court ruled a worker is a worker and is entitled to 4 weeks Paid Leave per year. BATU will keep you updated.