In Smith v Pimlico Plumbers employment status was only a preliminary issue, with success in the Supreme Court allowing the substantive issues, including a claim for holiday pay from the date the claimant started with Pimlico in 2005, to proceed before the employment tribunal. In 2019, the Croydon employment tribunal dismissed claims for holiday pay on the basis that they had been lodged too late.
The employment tribunal had found the claim for holiday pay out of time: the different periods claimed for did not form part of a continuing series of deductions for the purpose of an unlawful deduction for wages claim, and the claimant was not entitled to carry forward claims relating to holiday pay from one holiday year to the next. In coming to its judgment, the employment tribunal had considered the decision of the European Court of Justice ("ECJ") in the case of King v The Sash Window Workshop Limited and anor ("King"). That case established that a worker was (1) entitled to carry over, without limit, any annual leave that had not been taken because the employer refused to pay the employee during the period of leave, and (2) claim a payment in lieu of all of accrued holiday pay on termination. However, in this case the claimant had taken the leave albeit it had not been paid. The employment tribunal did not consider King to apply where a worker had actually taken the leave.
The EAT dismissed an appeal agreeing with the employment tribunal that the ECJ judgment in King was not concerned with leave that was taken but unpaid. There was nothing in the ECJ judgment 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) also applied to leave that was, in fact, taken. They also rejected the claimant's argument that it was not reasonably practicable for him to have brought the holiday pay claim within the relevant time limits.
This judgment will come as a relief not only to Pimlico Plumbers, but to many in the gig economy sector facing backdated holiday pay claims. In many cases those making the claims may have taken the holidays despite them not being paid. Unless this judgment is appealed and overturned the potential liabilities for businesses defending such claims will be significantly reduced.
