Business Law: Holiday pay case ruling could lead to chaos, says Dermott Thomas
- Credit: Archant
We are told a Great Repeal Bill is in the offing following Brexit.
This is not expected to be as radical as one might suppose as the Government has already made it clear that so far as possible they will retain all existing European Union-derived law.
That said, differences in approach between Europe and the UK can rarely have been more clearly illustrated than the continuing saga over holiday pay.
Employers looking to minimise their overheads are used to making a distinction between the more rigorous provisions of the EU-derived annual entitlement of four weeks and the additional 1.6 weeks added to the Working Time Regulations by the UK Parliament.
Now an English case referred to Europe where the Advocate General has already stated his opinion looks likely to produce some chaos if the European Court follows the Advocate General’s opinion.
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Mr King was contracted as a self-employed salesman and at the age of 65 his contract was not renewed after 13 years’ service. He claimed unlawful deduction of wages in the Employment Tribunal which found that he was a worker and therefore entitled to holiday pay. After various appeals the case has found its way to the European Court of Justice on the question whether the right to take leave can be lost where both the worker/employee and the employer/contractor believe that he was self-employed with no right to holidays.
The Advocate General’s opinion emphasises the health and safety duties of the employer/contractor who must ensure adequate provision is made for the employee/worker to take their holidays. If there is a failure in this respect the employee/worker cannot be blamed for not taking their holiday and should therefore be adequately compensated. In Mr King’s case this would mean 13 years’ compensation for holidays he would otherwise have been entitled to throughout his working life with the employer.
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If the European Court follows the Advocate General’s opinion this will have a profound effect on the viability of businesses like Uber and Deliveroo whose business models are based on what was perceived as the relatively low cost of self-employed workers.
It is difficult to see a UK Court unfettered by Europe coming to the same conclusion of what in effect amounts to retrospective law.
•Dermott Thomas is a partner and a specialist litigator/advocate at Barker Gotelee.