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Time limits apply to claims for backdated holiday pay

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Mr G Smith v Pimlico Plumbers Ltd

To what extent would someone who had been engaged on a self-employed basis be able to claim back pay if later found to be a worker and entitled to statutory paid holiday? A decision of the European Court of Justice had suggested that the entitlement to holiday pay would be carried forward each year to when the contract ended at which point the accumulated sum could be claimed. However the recent case of Mr G Smith v Pimlico Plumbers Ltd has held that the right to pay carries forward only for leave not taken.

Mr Smith was fired after requesting a reduction in hours

Mr Smith had been engaged by Pimlico Plumbers from 2005 to 2011 on a ‘self-employed’ basis. This was despite the fact he worked solely for Pimlico, was required to wear the company uniform, rented the van with their company logo, and was required to work a minimum number of weekly hours. After having a heart attack Mr Smith asked to reduce his hours in May 2011. He was told to return the van and other equipment and was not given any further work. On 1 August 2011 he issued proceedings. 

Despite being found to be a worker, it was found his claim for backdated holiday pay had been lodged too late

Whilst it was decided that he had been a worker and had a right to statutory paid leave, his claim for backdated holiday pay had been lodged too late. A claim for unlawful deductions from wages had to be brought within three months of the date the monies had been due. That meant he should have brought claims after each unpaid holiday he had taken. The rights to carry over the entitlement to pay would only apply in respect of the holiday he had not taken. 

Key takeaway points

Whilst this would appear to limit to an extent the claims that could be brought for backdated holiday pay, it does not mean that all claims will necessarily fail in the same way. Where the claim is that no holidays were taken, due to paid leave not being available, the right to full pay will still carry forward. Unless it has been clearly communicated that a ‘self-employed’ person is unavailable because they are on holiday, it may in practice be difficult to establish that they have in fact taken leave.

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