Smith v Pimlico Plumbers Ltd  EWCA Civ 70
Appeal against decisions that the Claimant was not denied his right to "paid annual leave" under regulation 13 WTR and that he had not made a claim for holiday pay for leave that was not actually taken. Appeal allowed in part.
The Claimant won his claim that he was a worker within the meaning of section 230(3) of the Employment Rights Act 1996 ("the ERA") and regulation 2(1) of the Working Time Regulations 1998 ("the WTR") which meant he was entitled to paid leave. The Claimant had taken unpaid leave throughout his time with the Respondent and made claims of unpaid holiday pay to the ET. The ET found that the only pleaded holiday pay claim advanced by the Claimant was for non-payment of wages for leave actually taken in each year of the engagement. The ET rejected his arguments that he had also pleaded claims for pay for holiday accrued but not taken in the final leave year, and for holiday accrued but not taken over the whole of the engagement. The Claimant appealed.
The Court of Appeal allowed the appeal in part. The language of article 7(1), article 31 of the Charter, and King v Sash Window Workshop, establishes that the single composite right which is protected is the right to "paid annual leave", for the reasons given above. If a worker takes unpaid leave when the employer disputes the right and refuses to pay for the leave, the worker is not exercising the right. Although domestic legislation can provide for the loss of the right at the end of each leave year, to lose it, the worker must actually have had the opportunity to exercise the right conferred by the WTD. A worker can only lose the right to take leave at the end of the leave year (in a case where the right is disputed and the employer refuses to remunerate it) when the employer can meet the burden of showing it specifically and transparently gave the worker the opportunity to take paid annual leave, encouraged the worker to take paid annual leave and informed the worker that the right would be lost at the end of the leave year. If the employer cannot meet that burden, the right does not lapse but carries over and accumulates until termination of the contract, at which point the worker is entitled to a payment in respect of the untaken leave. However, the ET did not err in holding that the Claimant did not plead a claim, either for payment in respect of the paid leave to which he was entitled during his employment but which he did not take, or for a remedy under regulation 14 of the WTR on termination.
Published: 07/02/2022 11:42