Pimlico plumbers on the hook for subbies holiday pay

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Employers and subcontractors have been warned to look very closely at status of self-employed subbies that saw one worker claim back £74,000 in back holiday pay after a supreme court ruling.

Heating engineer Gary Smith was involved in a long-running legal battle with Pimlico after the Supreme Court that had previously ruled separately that he was a worker and not self-employed.

Gary Smith who worked for the company between 2005 and 2011 saw that in the new case at the Supreme Court under appeal which followed on from the employment status ruling that he could claim back the holiday pay.

This saw Smith’s previous claim for backdated holiday claim rejected by an employment appeal tribunal, on the grounds that he had not filed his claim for backdated holiday pay quickly enough.

The tribunal rules state that, Smith should have made his claim for missed pay within three months of each holiday period or year, dating back to 2005.

In the most recent ruling at the Court of Appeal the lower courts judgments have been overturned in a landmark decision this month that will have far-reaching impacts across the industry.

The key stamens from the ruling states that: “A worker can only lose this right if the employer can specifically and transparently show that they 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 year.”

This means that as stated in court “if the employer cannot evidence this, then the right does not lapse at the end of the year, it carries over and accumulates until termination of the contract.”

This has prompted several industry trade bodies to write to its member contractors to warn them of the possible tide of claims

The right to paid annual leave is usually on the basis of a worker being self employed with many trade associations warning members who employ workers to look carefully at their employment status to reduce the risk of claims similar to Gary Smith Vrs Pimlico Plumbers.