The European Court of Justice has sided with a worker and his right to be compensated for untaken annual leave.

The case of King v The Sash Window Workshop Limited and another C-214/16 clarified that in circumstances where an employer has refused to recognise a worker’s right to paid annual leave, the worker has the right to be compensated for all of that leave on termination, whether or not he actually took the leave.

The case represents yet another challenge to the Government’s outdated labour laws, demonstrating a need for change in light of the gig economy. The failure of organisations for wrongly classifying their staff have created significant expense for these organisations. The payment of national minimum wage is not usually an issue in these cases as organisations frequently pay above this threshold. However, the right that workers have to paid annual leave could have greater consequences for these organisations.

The King decision increases the cost even further to those organisations that fail to recognise worker status correctly. The national minimum wage recovery period being six years, whereas King has confirmed that compensation for unpaid holiday can be claimed all the way back to 1993.

As a result of the ECJ’s decision in King, the cost of failing to recognise worker status has increased significantly, particularly for those organisations that have been operating for many years. In national minimum wage cases, the maximum period of recovery for past losses is six years. Following King, compensation for unpaid holiday can now be claimed all the way back to 1996.