Former Pimlico Plumbers worker not entitled to backdated holiday pay
The Employment Appeal Tribunal (EAT) has upheld the findings of the employment tribunal in Smith v Pimlico Plumbers Ltd. The case focused on whether the claimant was entitled to carry over annual leave entitlements from year to year, and whether his claim to the tribunal was lodged within the time limit.
The claimant was a heating and plumbing engineer who worked for Pimlico Plumbers. Throughout his employment, the employer maintained that he was a self-employed contractor, and so was not entitled to holiday pay under the Working Time Regulations. Therefore, while the claimant did take periods of time off as holiday, those periods were unpaid.
When the claimant’s employment came to an end, he brought claims to the employment tribunal seeking, among other things, compensation for the years for which he had not received holiday pay.
In the interim period, the Supreme Court had decided that the claimant was a worker, not a self-employed contractor – meaning that it would not be a question for the employment tribunal whether the claimant was entitled to holiday pay in principle, but rather, whether holiday pay was in fact owed to him.
The tribunal dismissed the holiday pay claim because it was brought outside the three-month statutory time limit. It also found that the claimant was not entitled to carry over holiday pay entitlements in circumstances where leave had been taken, albeit unpaid. The claimant appealed to the EAT.
The EAT agreed with the reasoning of the employment tribunal, that existing caselaw – namely, the decision of the European Court of Justice in King v Sash Window Workshop (‘King’) – did not permit the claimant to bring a claim in respect of unpaid annual leave when that leave had been taken.
The facts in King were distinguished insofar as that case involved an individual who was deterred from taking annual leave as he feared he was not going to get paid. Whereas, in the present case, it was noted that the claimant could not give one example of a time when he was discouraged from taking time off.
It was established in King that in circumstances where a worker was denied the opportunity to take leave by the employer, the worker is entitled to accumulate, carry over and be paid for such leave upon termination of the employment. As the claimant in the present case had taken his holidays, such circumstances did not apply to him.
This meant that the claimant was required to lodge any holiday claim within the set time limit from when the payment became due, but he had not done so. The EAT also upheld the tribunal’s decision that it was reasonably practicable for the claimant to have complied with the time limit, and so the appeal was dismissed.
This ruling will be of some comfort to employers, particularly those operating in the gig economy, given recent decisions of the courts (such as that of the Supreme Court in the 2021 Uber case) which have held that many people working in such industries actually hold the status of ‘workers,’ and not self-employed contractors – meaning that they are entitled to receive holiday pay in accordance with the Working Time Regulations.
It would seem, following this decision, that potential liability for employers in respect of backdated holiday pay entitlements in similar cases will be limited to where leave has been unpaid but taken.
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