Are your Self-employed staff really not entitled to paid holidays?
Today saw a landmark decision in the European Court of Justice. King v The Sash Window Worksop Ltd has significant implications for the right to holiday pay in the UK. It suggests that workers who are wrongly classified as self-employed contractors may be able to claim back pay in respect of unpaid annual leave going back many years when their ‘worker’ status is established.
In this case, Mr King worked as a commission based salesman on a self-employed basis. However, he was later found to have worker rights and therefore the right to holidays. The EU courts have ruled that Mr King was entitled to un-taken leave at the Company, going back 13 years ( circa £27,000).
This decision means that companies who routinely use staff on self-employed contracts such as in sales or the gig economy, could face potential huge liabilities if that status is later changed. It is important therefore that employers do not miscategorise workers ( who have more rights) as self-employed. Failure to do this could lead to a situation where you are liable for holiday back pay, when the workers employment is terminated.
Employers should therefore ensure that those engaged on a self-employed basis are actually self-employed and are not Workers. This is more than just a paper exercise and the working arrangements need to be reviewed.
For more information or assistance in carrying out this exercise feel free to contact firstname.lastname@example.org