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The European Court of Justice has ruled that a UK window salesman is entitled to 13 years of untaken leave after he was wrongly classified as self-employed.
Conley King worked for The Sash Window Workshop from 1999-2012 as a commission-based salesman. After he was dismissed from the company, a UK tribunal ruled that he should have been classified as a worker rather than self-employed and, as such, was entitled to holiday pay for the 13 years he was with the company.
The court was asked to decide whether or not EU law allowed King to claim for the entire length of his employment. It decided there was no time limit for the claim, saying: “An employer that does not allow a worker to exercise his right to paid annual leave must bear the consequences,” a ruling which could open the door for other claims.
Liam Grime, an employment law consultant with the ELAS Group, says: “This is very much a case of mistaken employment status. Had The Sash Window Workshop adequately assessed Mr King’s employment status then this issue could have been completely avoided.
“Whereas employees are afforded full protection under the Employment Rights Act 1996, workers are only entitled to some of the rights that this statute provides, including the right to paid annual leave and the right to be paid the National Minimum Wage.
“This ruling means that companies who engage the services of self-employed staff could face similar consequences, but there are measures they can put in place and steps that can be taken to avoid them.”
He said there were a number of tests that employers, especially those that operate in the gig economy, should apply in order to determine the employment status of an individual so they get the correct rights and entitlements. These tests look at such things as the level of control the employer has over the person, the economic reality of their relationship with the employer and how they are integrated into the organisation. Other tests would consider whether there was a mutuality of obligation between parties, and if the individual is performing a personal service for the employer.
In addition to these tests, Grime said HMRC has a useful tool for employers can use in order to able to determine the employment status of their staff. It can be found here.
He added: “Many businesses e.g. delivery or construction firms often use a large number of contractors on a ‘self employed’ basis to carry out work for them and the court’s ruling may inspire others in similar circumstances to Mr King who doubt their employment status to bring forth their own claims. Should a tribunal also find that they should have been classified as workers then the financial consequences could potentially be crippling – especially if they factor in the entire length of employment when deciding on compensation.
“We would strongly recommend any employers who are unsure if they have correctly classified anyone to start applying the employment status tests, so as to avoid the same fate as The Sash Window Workshop.”
Meanwhile, the British government is reported to have delayed legislation clarifying gig workers’ employment status in response to the Taylor review on modern working practices until 2018.