Pimlico plumber loses £74,000 holiday pay claim

The Employment Appeal Tribunal has rejected a claim for holiday pay brought by former Pimlico plumber, Mr Smith. It agreed with the employment tribunal that Mr Smith had not brought his claim in time.  

Dispute about employment status

Mr Smith was engaged by Pimlico Plumbers as a plumber on a self-employed basis between 2005 and 2011. Throughout his engagement he took periods of holiday, as permitted by his contract, but he was not paid for holiday taken. When his engagement terminated, he argued that he was a worker, not self-employed, and brought claims for disability discrimination and holiday pay. Pimlico Plumbers disputed he was a worker, maintaining that he was self-employed. The employment tribunal ruled that Mr Smith was a worker and Pimlico’s appeals all the way to the Supreme Court on this point failed.

Holiday pay claim 

In his holiday pay claim, Mr Smith sought to be paid for the holiday he had taken throughout his engagement. He relied on the decision of the European Court of Justice in Sash Windows v King. In that case, the ECJ ruled that where a worker does not take their holiday because they have been told they will not be paid for it, they can carry over the untaken holiday into subsequent holiday years and claim a payment in lieu of all the accrued but untaken holiday on termination. Mr Smith argued that this applied equally to his situation. Where he had taken holiday but not been paid for it, he could carry over the right to payment into subsequent holiday years and be paid for it all on termination.

What did the tribunals decide?

The employment tribunal disagreed, deciding that the ruling in Sash Windows v King only applies where a worker does not take their holiday because they will not be paid for it. It does not apply where the worker does take their holiday. Where a worker has taken holiday but not been paid for it, they must bring a claim for payment within three months of when the holiday pay should have been paid.  Mr Smith had not done so, and his claim was therefore out of time.

Mr Smith appealed to the Employment Appeal Tribunal. The Employment Appeal Tribunal carried out a detailed analysis of the ECJ’s decision in Sash Windows. It agreed with the tribunal’s conclusion that it did not give Mr Smith the right to carry over payment for annual leave from year to year.  He could not therefore bring a claim on termination for pay for holiday taken in previous years. 

What does this mean?

Many people engaged on a self-employed basis have been found to be workers entitled to worker rights and protections, including the right to the National Minimum Wage and holiday pay. This is common for those working in the gig economy, with the Supreme Court recently ruling that Uber drivers are workers entitled to those rights.

Workers are entitled to 5.6 weeks’ paid holiday each year under the Working Time Regulations 1998.

Workers who take that holiday but are not paid for it will have to bring a claim for holiday pay promptly at the time when holiday is taken. The claim normally needs to be brought within three months from when the payment should have been made.

However, workers who do not take their holiday because their employer has told them they will not be paid for it are entitled to carry it over into subsequent leave years. They can then claim a payment in lieu for all their accrued but untaken entitlement on termination. Again, they will have three months to bring the claim.

Employers who engage their workforce on a self-employed basis and so do not offer paid holiday should keep records of all holiday taken. 

Mr Smith has said he intends to appeal the decision.

Smith v Pimlico Plumbers Ltd