In the latest of a long line of cases relating to the calculation of holiday pay, the Court of Appeal has given a very significant decision that will impact all employers who engage independent contractors.
In a claim thought to be worth around 100,000, a worker who had taken unpaid leave for which he should have been paid, but who had not invoked his right to payment until after his employer terminated his contract, was entitled to bring a claim in respect of all unpaid annual leave accrued throughout his engagement, both taken and untaken, on the termination of his engagement.
Gary Smith was a plumbing and heating engineer who worked for Pimlico Plumbers between August 2005 and May 2011. Pimlico Plumbers maintained that Mr. Smith was engaged on a self-employed basis with no entitlement to paid annual leave. In the United Kingdom, an individual performing work will be either employed, self-employed, or a “worker,” which is a hybrid category created by statute. Employees and workers are entitled to paid holiday, while genuinely self-employed independent contractors are not.
On 1 August 2011, Mr. Smith presented an Employment Tribunal claim, which included claims for unpaid leave taken during his engagement, and a claim for compensation on grounds that he had been prevented from taking holiday. The tribunal ruled as a preliminary issue that Mr. Smith was misclassified as an independent contractor and that he was instead a “worker” - a decision that was eventually...
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