Important ECJ decision opens up the possibility of valuable retrospective holiday claims

I have written in this blog on many occasions about the importance of getting it right if you are going to treat all or part of your workforce as self-employed, rather than as fully fledged workers or employees. As you may recall, the Pimlico Plumbers case earlier this year ruled in favour of the claimants, finding that they were workers rather than being “fully” self-employed and therefore entitled to holiday pay and other benefits. The issue has been a hot topic throughout 2017 with the Uber and Addison Lee cases for example showing a willingness on the part of the courts to find that there was an employment relationship where, previously, there was assumed not to be.

But what basis should be applied for calculating losses if an entitlement to retrospective holiday pay or other benefits is established. The normal cut off point for calculations is six years, since this is the time limit for claims based on breach of contract. However, the entitlement to paid holidays arises under the EU Working Time Directive and this has a statutory footing.

This issue was recently considered by the Court of Justice of the European Union (CJEU/ECJ) and judgment was delivered in the case of King v The Sash Window Workshop Limited and Dollar on 29 November. Mr King had started working for Sash Window Workshop (“the Company”) in June 1999 on a “self-employed commission only contract”. He continued to work for the Company until his retirement in 2012. He took numerous holidays during the 13 years that he worked for the Company, but was not paid for them. Following his retirement he asked to be paid all his holiday pay for the entire period of his engagement. Unsurprisingly, the Company refused.

Mr King took his claim to an employment tribunal which held that there were in effect three types of holiday claims: (i) holiday pay for 2012-13 accrued but untaken when he left, (ii) holiday pay for leave actually taken but in respect of which no payment was made and (iii) pay in lieu covering accrued but untaken leave (amounting to a further 24.15 weeks). The tribunal found that Mr King was a worker (within the meaning of the statutory definition – see the Pimlico case) and therefore ruled in his favour in respect of all three.

The Company appealed to the Employment Appeal Tribunal.

The end of “fit to work” notes and referrals

Back in March 2010 I reported about the proposed introduction of fit notes, noting that the Government expected savings to the economy of £240 million over 10 years, by aiding the recovery to work of sick workers. Well, it didn’t turn out that way. By July 2010 there were teething problems. Bogus fit notes were widely available on the internet and offered for £9.99 with an introductory “buy one get one free” offer. A further and entirely predictable problem was that employers receiving the fit notes were unable to decipher GPs’ illegible handwriting and therefore overlooked key elements of the process such as, for example, arranging a structured return to work.

In 2015 the Engineering Employers Federation (EEF) reported that the scheme wasn’t working. By September 2014 only 5000 GPs from a pool of 40,854 had received training and 43% of employers said that the fit note had not helped employees to return to work. The EEF’s head of health and safety noted that the quality of advice being given by GPs to help people back to work was deteriorating and that, in order to work, the scheme needed greater resources.

Late in November 2017 it was quietly announced that the scheme is to be scrapped.