The Court of Appeal has confirmed in an important Judgment in the case of Smith v Pimlico Plumbers Ltd [2022] EWCA Civ 70, that a worker will be entitled to carry forward into subsequent leave years, all holiday which is untaken (or taken but unpaid) and that the worker’s claim for the entire amount will crystallise upon termination.
In this case, Mr Smith had worked for Pimlico Plumbers as a plumbing and heating engineer between August 2005 and May 2011. Pimlico Plumbers considered Mr Smith to be a self employed contactor, with no entitlement to annual leave. Mr Smith therefore took periods of unpaid leave throughout his time at Pimlico Plumbers.
As a preliminary issue, Mr Smith was held to be a worker for the purposes of the Working Time Regulations 1998 and the Employment Rights Act 1996. He brought a claim for holiday pay spanning over the whole period of his engagement with Pimlico Plumbers.
After careful consideration of the cases and legislation governing this area, the Court of Appeal held that because Mr Smith had been denied the right to paid leave throughout his engagement, his rights to holiday under the Working Time Directive, accumulated from year to year, and crystallized on termination.
It was also not for Mr Smith to prove that he had been denied his annual leave, it was for Pimlico Plumbers to show that it exercised all due diligence in order to enable Mr Smith to actually to take the paid annual leave to which he was entitled.
The importance of this decision is that, if a worker has been denied the right to take paid holiday from year to year, this liability will add up, year on year, and crystallise to a potentially large financial amount due to the worker on termination. This is particularly relevant for companies who work with self-employed people and/or who operate within the gig economy.
We strongly recommend therefore that companies review their arrangements with their workers and self-employed staff.
Should you require any assistance with any of the topics mentioned above, we would be delighted to help you.
Feel free to contact us on 02038379914 / info@joneschase.com
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Jones Chase is a specialist employment law firm based in the centre of London with an excellent track record of looking after those that we assist.
We fundamentally believe in helping both businesses and people with all their employment law needs.
Feel free to contact us should you require further information or need any assistance with any of the matters described in this bulletin. We are always happy to speak to people and point them in the right direction. Tel:- 0203 837 9914 / Email:- info@joneschase.com