Gig economy: European Court orders firm to pay 13 years’ holiday pay to worker

07 December

 

The European Court of Justice (ECJ) has ordered a window company to pay 13 years’ worth of back holiday pay to a salesman who had wrongly been described as self-employed.

 

The Sash Window Company had engaged the salesman between 1999 and 2012 on a self-employed basis. He was therefore not paid for any holidays he took (as self-employed contractors are not entitled to paid holiday under the Working Time Regulations, unlike employees and workers). He brought a claim against the company and it was found that he should be classed as a worker of the company, rather than as self-employed. This meant that he should be reimbursed for the pay he should have received over the 13 years of his service to the company. Previously, UK regulations had dictated that back holiday pay must be limited to two years in such cases.

 

This could have huge financial implications for employers in the UK who use contractors in the “gig economy”, as more and more of these individuals are successfully claiming in the Employment Tribunals that they should be classed as workers or employees rather than self-employed or freelance.

 

In another important example of this, the Employment Appeals Tribunal has confirmed a controversial decision of an Employment Tribunal judge that drivers for taxi app business Uber are workers of the company. Uber is now appealing to the Court of Appeal, but it is likely that any appeal hearing will not take place until next year and that following that hearing, the case will then be taken to the Supreme Court for a final decision.

 

As things stand, there is not much prospect of clarity on the gig economy in the near future and the Government has been urged to act by making the law clearer, rather than relying on the courts to decide each case on its own facts.

 

If you would like more information on this or a related topic, please contact the Employment and HR team.

 

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