Under the provisions of the Working Time Regulations (WTR), all workers working 5 days or more a week are entitled to receive at least 28 days paid annual leave which is equivalent to 5.6 weeks of holiday per year including bank holidays where they arise. 28 days leave is on a pro rata for part-time workers.
The first 20 days (4 weeks) of leave derives from EU law and cannot normally be carried over into the next holiday year (see exceptions below) but the balance 8 days (1.6 weeks) derived from national law can be carried over into next holiday by a relevant agreement (Regulation 13 A WTR) otherwise likely to be lost.
Holiday Entitlement
Statutory holidays cannot be replaced by a payment in lieu other than on termination of employment.
There are certain exceptions permitting the carryover of the statutory holiday entitlement where: -
- employee is on maternity leave- employee to take outstanding 28 days holiday if a full-timer upon returning back from maternity leave on dates to be agreed- Gomez Case,
- long term sick- outstanding holidays forwarded to a maximum of 18 months after the end of the year in which it accrued- Plumb v Duncan Print Group Limited (EAT). Any holiday left unused beyond that point is likely to be lost. Also, in Sood Enterprises Ltd v. Healy the Employment Appeal Tribunal (EAT) decision seems to suggest that carry over is limited to up to 4-weeks outstanding holiday.
- the employer has made it impossible for an employee to take their paid holiday in the holiday year to which it relates or not encouraged the employee to take holidays- carryover of up to 4 weeks (20 days) holiday into the next holiday year- but see case law as below,
- not been reasonably practicable to take leave because of the impact of the coronavirus, carry over up to four weeks (20 days) into the next two holiday years- The Working Time (Coronavirus) (Amendment) Regulations 2020 introduced new regulations 13(10) and (11) a to the WTR.
Untaken Annual Leave
In the case of King v Sash Windows 2016, Mr King had not taken his full annual leave entitlement each year over 13 years as it would be unpaid leave and the Court of Justice of the European Union (CJEU) ruled that this was incompatible with the Working Time Directive 2003/88 as the worker was being deterred from taking leave because the employer would not pay for such holidays thus the worker was deprived of the therapeutic health benefit of taking leave.
The King v Sash case was more about being deterred from taking the right to annual leave. Any claims for untaken annual leave could go back as far as 6 years or even longer, although such claims would need to be presented before a Tribunal within 3 months of the last breach (end of holiday year to which it relates) or last continuing series of breaches thus in the latter it could potentially be pursued collectively at the end of employment.
Unlawful deduction of wages
Please note that the above case was not about unlawful deduction of wages. Where a person takes holidays but does not get paid for them, for example where a person takes unpaid holiday mistakenly believing that they are self-employed but subsequently turns out that they were employees /workers. A claim for unlawful deduction of wages in respect of back dated holiday pay could go back to a maximum of two years of unpaid holidays under the Deduction from Wages (Limitation) Regulations 2014 (section 9 of the Limitation Act, that provides for a six year time limit for claims in contract, not applying where there is another statutory limitation period here 2 years and the Coletta v Bath Hill Court (Bournemouth) Property Management Ltd UKEAT/0200/17 appears to confirm this).
In the recent case of Smith v. Pimlico Plumbers Ltd UKEAT 2021, such a claim for holiday taken but unpaid would not fall within the findings of King v Sash case thus any claim for unpaid holiday pay in this context would need to be made to Employment Tribunal within three months of the last deduction i.e. end of the holiday year to which it relates ,as the right to make such a claim falls under Regulation 16 of the WTR where there is no provision linking a series of non-payments and thus gaps of more than three months between previous year’s holidays will make the claim out of time.
As businesses are obliged to carry out an assessment of the employment status of their staff and ignorance is no defence then having regard to the recent EAT findings in the Pimlico Plumbers case and what was previously decided in King v Sash case, where businesses take on self-employed contractors on a regular basis who may not work for any other independent customers, it may be prudent to explain to such contractors in writing that unpaid leave is permissible during the duration of the contract to mitigate any risk should it subsequently transpire that they are employees or workers of the organization.
The article is for general information purposes only and should you require any further assistance on the matter please do not hesitate to call our advice-line team on 01455 852028.
