Pimlico Plumbers Wins ‘Gary Smith’ Employment Tribunal Ruling on Holiday Pay
You may recall in 2018, The Supreme Court delivered its ruling on the landmark Pimlico Plumbers case, upholding previous decisions that a ‘self-employed’ plumber, Gary Smith, was classified as a ‘worker’ with valuable employment rights under UK law (including discrimination protection and holiday pay amounting to £74,000).
However, in March 2021, the Employment Appeals Tribunal (EAT) subsequently found in favour of Pimlico Plumbers, ruling that the firm did not discriminate against Gary Smith and Mr Smith is not entitled to any holiday pay.
This case has been of particular interest to businesses and organisations who engage people on a self-employed basis – where the employee has total responsibility for their own PAYE/IR35 tax payments – as the impact on a company’s payroll could be significant.
So, what has happened in this latest tribunal case?
The EAT’s Holiday Pay ruling
In the recent case Smith -v- Pimlico Plumbers Limited the Employment Appeals Tribunal (EAT) distinguished the European Court of Justice ruling in the case of King -v- Sash Window Workshop on the basis that King established that a worker is entitled to carry over annual leave which is untaken because the employer refused to renumerate for it. This did not apply when the leave was actually taken.
In the case of Smith -v- Pimlico Plumbers Limited, the EAT found that when a worker had been allowed to take annual leave but had not been paid for it, they were not permitted to carry over the right of payment for the holiday to future years. This means that Gary Smith wasn’t entitled to holiday pay in subsequent years as he wasn’t permitted to carry it forward. The basis of the EAT’s new ruling centres on the exact contract wording used by Pimlico Plumbers and it is this that has protected them in this case.
This case is likely to be welcomed by employers as there is a range of claims that may be made by workers under King to those for leave that was untaken, rather than to claim for leave that was taken but that were unpaid. This decision may well be appealed as the matter was determined on a very subtle difference between the entitlement to take annual leave and the entitlement to be paid for such leave. This is a very complex area of law and as an employer you must ensure that you obtain legal advice in each particular case.
Should you require any further information in respect of holiday pay issues or if you feel that you have not been paid your holiday pay correctly, then please contact Vaishali Thakerar, Director, Employment team at Lawson-West Solicitors vthakerar@lawson-west.co.uk
Employers might like to take this opportunity to review their self-employed and employed contract wording to ensure they have holiday pay clarity and are protected from future claims of this type.
Vaishali Thakerar, Director & Head of Employment, Lawson-West Solicitors, Leicester
