In 2018, the Supreme Court upheld that Mr Smith was a worker in terms of the Employment Rights Act 1996 and our article about that can be accessed here - “Independent contractor” wins worker status claim | MacRoberts.
The case was subsequently appealed in relation to holiday pay deductions and the English Court of Appeal will consider a number of important points at the beginning of December 2021.
Recap of facts
Mr Smith, a plumbing and heating engineer, was employed by Pimlico Plumbers Limited from August 2005 until May 2011 as a ‘self-employed’ worker. During this time, Mr Smith wore Pimlico uniform, drove Pimlico branded vehicles and payment for his services were made to Pimlico. During this time, Mr Smith took several periods of unpaid holiday, as permitted by his contract. Upon the termination of his employment, Mr Smith argued that he was in fact a worker as opposed to ‘self-employed’ as described in his contract and brought claims on the grounds of disability discrimination and holiday pay.
Pimlico plumbers argued that he was in fact self-employed and therefore not entitled to holiday pay.
Before the Tribunal could look at whether Mr Smith was entitled to be paid when on holiday, it was necessary to establish if he was a worker in the first instance and so entitled to make such a claim, or self-employed as argued by Pimlico Plumbers.
The Supreme Court upheld that Mr Smith was a worker.
Holiday pay - Employment Tribunal
With Mr. Smith’s ‘worker’ status confirmed, Mr Smith’s case returned to the employment tribunal in an attempt to determine his entitlement to holiday pay. The Tribunal dismissed his holiday pay claim on the preliminary jurisdictional point that his claim for holiday pay was brought outside the statutory three-month time limit, and therefore the time in which he could bring his holiday pay claim had expired.
Mr Smith appealed the decision to the Employment Appeal Tribunal, relying on the case of King v Sash Window Workshop in which the European Court of Justice allowed leave to be carried over indefinitely where a worker is deterred from taking leave because it will not be paid for by the employer.
The Employment Appeal Tribunal (EAT)
The Claimant argued that the Tribunal had not correctly applied the case law in this area and had erroneously concluded that he had not shown that it was not reasonably practicably for him to bring the claim within the three-month time limit which is the basis on which a Tribunal can extend the three-month time limit for claims for unlawful deductions of earnings. The question before the Employment Appeal Tribunal was whether Sash Windows applied to situations where the annual leave is taken, but is unpaid. The EAT refused Mr Smith’s appeal on the grounds that his case was fundamentally different to those covered by Sash Windows as Mr Smith was not dissuaded from taking annual leave. The annual leave was taken by Mr Smith, albeit unpaid. The EAT agreed with the Tribunal that there was no reason to extend time as it had been reasonably practicable for the Claimant to have brought his holiday pay claim within the set time limit.
The case has now been appealed to the English Court of Appeal and is due to be heard in early December. The issues we understand are to be addressed by the Court of Appeal are:
- The ambit of Sash Windows and the other principles of law as to carry over and exercise of the right to paid annual leave; and
- In relation to time limits for holiday pay claims, whether an ongoing series of deductions is broken by a period of three months of no deductions so making a claim time barred
We will provide further updates on this long-running case. The outcome of this case and of any subsequent appeal to the Supreme Court, if made will affect the significant number of ongoing holiday cases which are currently on hold pending a definitive decision about time limits for holiday pay claims.
Watch this space!