Employment Appeal Tribunal rules on carry over of holiday pay.

The Employment Appeal Tribunal (EAT) has handed down its judgement looking at a workers right to claim holiday pay.

The claimant, Mr. Smith, worked for the respondent, Pimlico Plumbers between 2005 and 2011, and was considered throughout the six year period to be self-employed independent contractor. As such, he had no entitlement to paid annual leave, although he took periods of unpaid leave. In 2011, the claimant alleged that the respondent had fundamentally breached the contract and so terminated the contract, claiming for, amongst other things, holiday pay. The initial hearing considered the claimants status, and, having been held by the Supreme Court to be a worker, the Employment Tribunal was then required to consider his claim regarding the holiday pay on the basis that it had been brought outside the three month time limit. The Tribunal dismissed the holiday pay claim on the basis that following the CJEU’s decision in King v Sash Window Workshop the claim was out of time. The claimant appealed to the EAT.

The decision in King was concerned with leave that had accrued but was not taken because the lack of payment had dissuaded Mr. King from taking his holiday. In that case the CJEU had held that a worker who does not exercise his right to paid leave under the Working Time Directive (“WTD”) because his employer refuses to pay for such leave, must be permitted to carry over and accumulate such leave until termination of his employment relationship whereupon he is entitled to a single payment in respect of all such untaken leave. However, in this case the claimant was seeking payment on termination under the Working Time Regulations 1998 (WTR) in respect of holiday which he had in fact taken.

The EAT dismissed Mr Smith’s appeal, holding that the Tribunal had not erred in its interpretation of the King decision in deciding that that case had not been concerned with leave that was taken but unpaid. The EAT confirmed that the effect of the decision in King, is that Regulation 13(9) WTR is incompatible with Article 7 WTD and needs to be reinterpreted to read that carry-over is permitted where a worker was “unable or unwilling to take some or all of the leave to which the worker was entitled under this regulation because of the employer’s refusal to remunerate the worker in respect of such leave”.

In addition, the tribunal had not erred in determining that it had been reasonably practicable for the claimant to have brought the claim in respect of holiday pay within the relevant time limits. The claimant had been in a position to exercise his right to claim payment for the leave he had taken and so had had an effective remedy.