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Employment Appeal Tribunal rules worker not entitled to holiday pay

13 Apr 2021

A former Pimlico plumber has lost his case after the EAT has ruled he is not entitled to backdated holiday payments.

Employment law grants a wide variety of rights to those in work, ranging from protection against dismissal, to in-work rights such as maternity leave and paid holidays. As anyone who has had any contact with it will know, however, this area of the law is enormously complex.

A recent case of Smith v Pimlico Plumbers illustrates these complications very well, although the story is a developing one as there is a different case awaiting decision in the Supreme Court that could shed further light on certain aspects.

Last month, the Employment Appeal Tribunal upheld a Croydon employment tribunal’s ruling that Mr Gary Smith had not filed his claim for backdated holiday pay within the specified time limit of three months.

Under tribunal rules, Mr Smith should have filed a claim against his former employer, Pimlico Plumbers, for missed pay within three months of each holiday period, dating back to 2005.

What was the Smith v Pimlico Plumbers case?

The case brought by Mr Smith was more than unusually complicated. Smith is a plumbing and heating engineer, who worked for Pimlico Plumbing from August 2005 to May 2011.

The employers maintained that Smith was self-employed, and thus had no entitlement to paid annual leave. Smith did take several periods of unpaid leave during the course of his employment.

Mr Smith’s contract was terminated in May 2011. In August 2011 Mr Smith issued proceedings before the employment tribunal alleging that he had been unfairly dismissed, that an unlawful deduction had been made from his wages, that he had not been paid for a period of statutory annual leave, and that he had been discriminated against by virtue of a disability.

The tribunal decided that Mr Smith had not been an employee under a contract of employment, and, therefore, that he was not entitled to complain of unfair dismissal. Crucially, however, they found that he was a ‘worker’, which meant he could proceed with his other complaints.

In respect to the other complaints, Mr Smith was seeking £74,000 in compensation for holiday pay relating to his time working for the plumbing firm, between 2005 and 2011. Although Mr Smith had been allowed to take annual leave and had routinely done so at Christmas time, during the summer holidays and on bank holidays, he had never been paid for it.

Lawyers for Mr Smith were arguing that the tribunal had not correctly applied the case law in this area and had incorrectly concluded that he had not shown it was feasible for him to bring the claim within the three-month time limit.

Mr Smith’s argument was centred around how the tribunal applied the legal precedent set in the case of King v Sash Window Workshop. Mr King’s case was another complex legal dispute involving the Working Time Directive, and he too had not received paid annual leave because his employer wrongly characterised him as self-employed.

Mr King eventually won his case, and he was allowed to claim arrears of holiday pay.

What was the ruling?

There was, however, a distinct difference between Mr King and Mr Smith’s cases. Mr King had not taken the leave, whereas Mr Smith had done so, even if it was unpaid.

The Employment Appeal Tribunal agreed with the tribunal that Pimlico Plumbers did not discriminate against Mr Smith and that he is not entitled to backdated holiday pay.

The backdated holiday claim, in particular, was down to Mr Smith not bringing his claim within the relevant time limits of three months.

Where the worker has taken leave and is seeking payment under the Working Time Directive on termination of his employment, he is not entitled to claim a single payment that has accrued over the years. Each claim for holiday pay must be considered individually and the three-month time limit runs from each instance in which holiday was taken but not paid for.

The judgement says:

The CJEU’s decision in King was not concerned with leave that was taken but unpaid, and there was nothing in it to suggest that the carry-over rights in respect of annual leave that is not taken (because of the employer’s failure to remunerate such leave) applied to leave that was in fact taken.

The tribunal had also not erred in determining that it had been reasonably practicable for the claimant to have brought his claim in respect of holiday pay within the relevant time limits.

Pimlico Plumbers chairman Charlie Mullins commented:

This has been a long-running case and one that has attracted a huge amount of media attention, so I am extremely pleased that Pimlico has been completely vindicated by the EAT, and I hope that after almost a decade in the courts this case has finally been put to rest.

How Percy Hughes & Roberts can help

This complex case demonstrates how receiving expert employment law advice is crucial. Whether you an employee or an employer, this area of law requires extensive knowledge to avoid any legal pitfalls and ensure you are adequately protected.

At Percy Hughes & Roberts, we have a team of employment lawyers who boast years of experience and promise a confidential, friendly, and honest approach to all issues within the employment law field.

If you have any questions regarding holiday pay or any issue surrounding this area, you can get in touch with our team for expert advice. Get in touch with one of our Wirral Employment Lawyers today by calling 0151 666 9090 or by completing the “Get in touch” form on this site.