In this article, Employment Partner Paul Burton looks at the reversal of a recent case.
The case has important takeaways for employers, regarding paid & unpaid holiday and the carrying over of such annual leave.
Smith v Pimlico Plumbers
This case report follows on from my colleague Chris Dobbs’ report on an EAT decision in Smith v Pimlico Plumbers (June 2021).
In that article Chris looked at the EAT’s decision in answering the question ‘no’ and also the fact they held the decision in Bear Scotland, a period of more than three months between holidays broke the chain in a series of deductions, was good law.
Please read that article first, to gain context regarding the below decision.
Decision reversal
Mr Smith appealed to the Court of Appeal (CA) and they have now reversed the EAT’s decision.
Lady Justice Simler cited article 7(1) of the Working Time Directive and article 31 of the Charter of Fundamental Rights of the EU, which states that the single protected right is the right for ‘paid annual leave’.
With this in mind, she came to the decision that just because the worker took unpaid leave when the employer refused to pay it didn’t mean that the worker was exercising the right to lose this leave.
What did the Court of Appeal decide?
Essentially, Lady Justice Simler decided that, in this scenario, the worker must’ve actually had the opportunity to exercise the right conferred by the Working Time Directive.
And, the employer must be able to confirm that they:
- 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 worker is not made aware, then their right does not disappear but carries over and accumulates until termination of the contract.
At that point, the worker is entitled to a payment in respect of the untaken leave.
Click here to read the full article.