Worker not entitled to carry over right to payment for annual leave previously taken


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The Employment Appeal Tribunal (EAT) has held in Smith v Pimlico Plumbers Ltd that, in accordance with the European Court of Justice's (ECJ's) decision in King v Sash Window Workshop Ltd, a worker is not allowed to carry over a right to payment for annual leave in circumstances where the worker has been permitted to take annual leave but has not been paid for it. 

Although the ECJ's decision in King v Sash Window Workshop Ltd established that a worker is entitled to carry over, without limit, any annual leave untaken because the employer refuses to remunerate it, it did not apply to leave that was in fact taken.

Mr Smith worked as a plumbing and heating engineer from August 2005 until May 2011. He presented employment tribunal claims for, amongst other things, unpaid holiday pay accrued throughout his employment. He argued that, although he had been allowed to take annual leave and had routinely done so, he had never been paid for it. Pimlico Plumbers challenged Mr Smith's employment status and, when the Supreme Court ruled that Mr Smith was a "worker", his holiday pay claim returned to the tribunal.

The tribunal held that the claim was out of time (the latest occasion on which Mr Smith had not been paid for holiday was in February 2011, more than 3 months before the presentation of his claim), but also that the decision in King did not apply to a case where a worker has taken leave and not been paid for it. On appeal the EAT upheld the tribunal's decision, agreeing that the ECJ's decision in King did not give Mr Smith the right to carry over payment for annual leave from year to year when the leave had already been taken. 

Take note:  Following Smith it is clear that a worker does not have a right to carry over payment for leave that they have been permitted to take but which they have not been paid for. In coming to its decision the EAT proposed that additional wording should be inserted into the Working Time Regulations 1998 to enable a worker to carry over untaken leave where they have been prevented from taking holiday due to their employer's refusal to pay them for it in line with the decision in King.
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