Workers are entitled to paid leave and compensation if they are not allowed to take holidays, according to a member of the European Court of Justice.
EJC advocate general Evgeni Tanchev stated in an opinion that it is incompatible with EU law if a worker has to take leave first before being able to establish whether they are entitled to be paid.
The statement refers to a long-running claim by a UK salesman known as Mr King against his former employer, Sash Window Workshop Ltd.
Mr King was paid entirely on commission on a self-employed contract. He was not paid for any leave taken, and his contract had nothing in it regarding paid holidays.
When he was dismissed aged 65, he brought a claim of more than £27,000 against the company for unreceived holiday pay dating back 13 years.
A subsequent UK employment tribunal ruled that he should have been treated as a full-time worker with the same rights.
Tanchev said: “A worker, like Mr King, may rely on the directive to secure payment in lieu of untaken leave, and when no facility has been made available by the employer for exercise of the right to paid annual leave.
“Upon termination of the employment relationship, a worker is entitled to an allowance in lieu of paid annual leave that has not been taken.”
Opinions given by ECJ advocate generals are usually followed by full court decisions. The ruling could have serious financial consequences for businesses with no firm policy on holidays.
Find out how to manage staff holidays with the free Deminos guide – www.deminos.co.uk/how-do-i-calculate-holidays