The Court of Appeal’s decision in the case of Smith v Pimlico Plumbers Ltd allows a worker to carry over a right to payment for annual leave from one leave year to the next if the worker has been permitted to take annual leave but has not been paid for it.
Mr Smith worked for Pimlico Plumbers as a plumbing and heating engineer for almost 6 years. Throughout that time, Pimlico Plumbers maintained that he was self-employed and therefore had no entitlement to paid annual leave.
Mr Smith subsequently brought claims in the Employment Tribunal and the Supreme Court confirmed that he had ‘worker’ status during his engagement by Pimlico and therefore he was entitled to paid annual leave.
Having succeeded in his worker status claim, Mr Smith sought repayment for all unpaid holiday (both taken and untaken) which had accrued throughout the period of his engagement with Pimlico. The Employment Tribunal found that his claim was out of time and his appeal to the Employment Appeal Tribunal was dismissed. However, the Court of Appeal upheld Mr Smith’s appeal and decided that as a worker he could carry over leave that had been taken, but not paid, entitling him to over £74,000 of holiday pay accrued over his six years’ service.
This judgment is of importance to all businesses with workers who were previously classified as self-employed and demonstrates that the financial cost of missed holiday pay can be significant.
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