YORK's Hethertons Solicitors, is calling on businesses to review their long-standing relationships with self-employed contractors following a landmark case at the European Court of Justice (ECJ).

The ECJ ruled that workers are entitled to compensation in respect of all the annual leave they had been prevented from taking holiday throughout their engagement even if the business did not know they were entitled to it.

Its decision was delivered in the case involving The Sash Window Workshop Limited and one of its salesmen, Conley King.

Mr King had been engaged with by Sash Window from 1999 until 2013, was paid on a commission basis and was described in his contract as ‘self-employed’.

Mr King brought a claim against his employers for payment of untaken annual leave.

At an Employment Tribunal, he was found to have been a worker and not self-employed. He submitted a claim for unpaid holiday pay for £27,000 in total.

The ECJ ruled that European law does not put any time limit on his claim and Mr King will, therefore, be able to claim for the entire period. It stated: “an employer that does not allow a worker to exercise his right to annual leave must bear the consequences.”

David Scott, a Senior Associate at Hethertons Solicitors, has said that businesses, especially those operating in the so-called “gig economy”, need to take heed of this latest decision as it will bind UK employment tribunals.

“Brexit or not, the current rulings of the ECJ will bind UK businesses to this new standard, which means that they need to review contracts, holiday pay arrangements and assess the risk of a claim from those who are no longer engaged by the business to ensure they aren’t caught out,” said David.

“The gig economy – and the recent rulings regarding it – continues to create an additional layer of complexity to UK employment law, with costly consequences for those who get it wrong.”

He said the historic element to this latest case, and the significant costs that could be involved, made it all the more important for firms to act quickly.