Smith v Pimlico Plumbers Ltd is a long running saga. The case kicked off on the issue of whether Mr Smith, a plumber, was truly self-employed, as Pimlico contended. The Supreme Court determined that he was not self-employed, but that he was a worker engaged by Pimlico. That finding triggered an entitlement to paid holidays for Mr Smith.
While working for Pimlico, Mr Smith was able to take time off for holidays like Christmas etc. However, when he took the time off, he was not paid. He subsequently brought a claim seeking payment for the statutory holidays for which he had not been paid over the years he had worked for Pimlico.
Last year, Mr Smith argued that he should be able to rely on a series of successive years where he had not been paid for holidays. This was using the logic of another case, King v Sash Windows, which determined that a worker who had not been allowed to take holidays was entitled to carry those untaken holidays forward on a rolling basis for the purposes of a subsequent claim. However, the EAT decided against Mr Smith and found that his situation was different from the Sash Windows case. Specifically, Mr Smith had been allowed to take holidays (just that he hadn’t been paid for them) whereas the right to carry forward applied to untaken holidays. The EAT ruled that there was no right for Mr Smith to carry forward holidays that he had been permitted to take (albeit unpaid). That outcome stopped his claim in its tracks, because the effect of that decision was that his claim was time barred (having been lodged too late after the last unpaid holiday).
Not satisfied with the outcome, Mr Smith appealed to the Court of Appeal. He was successful. The Court of Appeal reviewed the case law and relevant legislation, including the European Directive from which the right to paid holidays originates. It was determined that the legal right for a worker is to paid annual leave. Where a worker, such as Mr Smith, takes leave but is not paid for it, that worker is not actually exercising their statutory right (because the pay is an essential component of the right). Therefore, it cannot be said that Mr Smith had lost his right to carry forward the statutory right to paid leave.
On the question of holiday pay being claimed as a series of deductions, in the context of an unlawful deduction from wages claim, although not a point for determination in the Smith case, the Court of Appeal did give a provisional view that previous case law was wrong. Specifically, Bear Scotland Ltd v Fulton and ors which determined that any employee who has a gap of three months or more between holidays cannot claim further back than that three-month gap.
If you require any advice about matters relating to holiday pay entitlement, please contact a member of the Blackadders Employment Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.
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