Window Salesman May Become U.K. ‘Gig Economy’ Hero

  • European Union
  • 12/01/2017
  • Bloomberg Law

It may have taken a retiree to help get vacation time for members of the gig economy.

The former English window salesman, Conley King, was behind a ruling from the European Union’s top court Wednesday that forces companies to pay employees for vacation time they were unable to take during the year.

The ruling by the EU Court of Justice in Luxembourg on Wednesday is especially relevant for people who like King are on a commission-only basis or are self-employed members of the burgeoning gig economy. The EU judges put the onus on employers to respect the right to paid annual leave as “a particularly important principle of EU social law.”

“This has huge potential implications for the large number of people who are working in the gig economy and are claiming worker status which then gives them the right to claim holiday pay accumulated over years of supposed self-employment,” said Claire Dawson, national head of employment at law firm Slater and Gordon in London. “Employers could be facing much larger claims.”

Companies like Uber Technologies Inc. and Deliveroo are struggling to comply with court rulings that cut to the core of their business model, which rely on a network of self-employed contractors to service their customers. U.K. courts have ruled that these workers are entitled to holiday pay and other benefits in the same way as traditional employees.

“Workers must be able to carry over and accumulate unexercised rights to paid annual leave when an employer does not put that worker in a position in which he is able to exercise his right to paid annual leave,” the EU court said.

The bill for unused vacation for some workers that were wrongly classified as self-employed for years could be “substantial,” said London employment lawyer James Davies.

The decision “will have major implications for many businesses, particularly those who have wrongly classified members as self-employed contractors,” said Davies, who works at Lewis Silkin in London. “If such individuals in reality have ‘worker’ status, they can potentially claim unpaid holiday pay going back many years.”

King joined the Sash Window Workshop Ltd. in 1999 as a salesman on commission and wasn’t entitled to paid vacation under his contract. When King was dismissed on his 65th birthday in 2012, he sued to seek compensation for all annual leave he should have been entitled to.

“To accept that a worker’s acquired entitlement to paid annual leave could be extinguished, would amount to validating conduct by which an employer was unjustly enriched to the detriment of the purpose” of EU law, the court said.

The court’s decision comes amid intense negotiations between the EU and U.K. on laying the groundwork for Britain’s exit from the current 28-nation bloc. The future role of the bloc’s top court in Luxembourg remains one of the final hurdles both sides need to agree on before talks on the future relationship between a post-Brexit U.K. and its biggest trading partner can start.

It’s not the first dispute over employees’ rights to vacation time to make its way to the EU’s top court. The judges in another case referred to them by a U.K. court said in 2009 that companies can’t reject workers’ vacation requests after an extended period of illness.