Gary Smith v Pimlico Plumbers Ltd
| Jurisdiction | England & Wales |
| Judge | Lady Justice Simler,Lady Justice Elisabeth Laing,Lady Justice King |
| Judgment Date | 01 February 2022 |
| Neutral Citation | [2022] EWCA Civ 70 |
| Docket Number | Case No: A2/2021/1097 |
| Year | 2022 |
| Court | Court of Appeal (Civil Division) |
[2022] EWCA Civ 70
Lady Justice King
Lady Justice Simler
and
Lady Justice Elisabeth Laing
Case No: A2/2021/1097
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
Mr Justice Choudhury (President)
UKEAT/0211/19/DA
Royal Courts of Justice
Strand, London, WC2A 2LL
Michael Ford QC, Caspar Glyn QC and David Stephenson (instructed by TMP Solicitors LLP) for the Appellant
Christopher Jeans QC and Andrew Smith (instructed by Mishcon De Reya LLP) for the Respondent
Hearing dates: 7 and 8 December 2021
Approved Judgment
This judgment was handed down remotely at 10.30am on Tuesday 1 February 2022 by circulation to the parties or their representatives by email and by release to BAILII and the National Archives
Introduction
This case concerns the enforcement by a “worker” of the right to paid annual leave guaranteed by articles 7 of the EU Working Time Directive 2003/88/EC of 4 November 2003 (“the WTD”) and 31 of the Charter of Fundamental Rights of the European Union (“the Charter”). Pimlico Plumbers Limited, the respondent, disputed the appellant's entitlement to paid leave, and did not pay him for it. The appellant nevertheless took unpaid leave for which he ought to have been paid. He took no steps to invoke the right to payment until after his contract was terminated by the respondent. The respondent now accepts that the appellant was entitled to paid annual leave but argues that the appellant acted too late to enforce his rights. That argument succeeded in the employment tribunal and in the Employment Appeal Tribunal.
The appellant is Gary Smith. He worked for the respondent, Pimlico Plumbers Limited, from 25 August 2005 until May 2011. At the beginning of the engagement there was an agreement between the parties, described as a contract of employment, which described Mr Smith as an employee. Later, and for the rest of the engagement, the respondent maintained, instead, that Mr Smith was a self-employed independent contractor who had no entitlement to paid annual leave. Mr Smith nevertheless took periods of leave from time to time, but these were always unpaid. On 3 May 2011, the respondent suspended Mr Smith and required him to return equipment and a van. Mr Smith regarded this as a fundamental breach of his contract. He brought proceedings in the employment tribunal on 1 August 2011, alleging, among other things, that he was, at least, a worker who was entitled to paid annual leave throughout the engagement, and seeking to recover compensation for unpaid leave.
The question of his status was addressed as a preliminary issue by the tribunal and finally resolved in Pimlico Plumbers Limited and another v Smith [2018] UKSC 29, [2018] ICR 1511. The Supreme Court held that Mr Smith undertook to “perform [his services] personally”. Accordingly 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”). That meant he was entitled in principle (subject to the issues considered below) to 5.6 weeks' paid annual leave. This appeal only concerns his entitlement to four weeks' paid leave each year under regulation 13 (deriving from the WTD) and not the additional domestic leave entitlement provided for in regulation 13A of the WTR.
His case returned to the employment tribunal. After a hearing on 18 and 19 March 2019, the holiday pay claim was rejected by Employment Judge Morton on jurisdictional grounds, in a judgment with reasons sent to the parties on 1 July 2019. In short, the tribunal found that the only pleaded holiday pay claim advanced by Mr Smith was for non-payment of wages for leave actually taken in each year of the engagement. The tribunal rejected Mr Smith's arguments that he had also pleaded claims for pay for holiday accrued but not taken in the final leave year to 3 May 2011, and for holiday accrued but not taken over the whole of the engagement, from August 2005.
The tribunal held that the pleaded claim was presented out of time because Mr Smith's last period of (unpaid) leave ended on 4 January 2011; the respondent ought to have paid him for that period of leave on 5 February 2011 when Mr Smith received his payslip for that month; and he was therefore obliged to present a claim by 4 May 2011 at the latest, but did not present his claim until 1 August 2011, nearly three months after the expiry of the relevant deadline. The tribunal held that it was reasonably practicable for the claim to have been presented in time (this decision is not now challenged) and in any event, the claim was not presented within a reasonable period following the expiry of the primary time limit. The tribunal rejected Mr Smith's argument that the decision in King v Sash Window Workshop (C-214/16) [2018] 2 CMLR 10, [2018] ICR 693 (“ King”) entitled him to bring, on the termination of his engagement, a claim in respect of all unpaid annual leave accrued throughout his engagement with the respondent, both taken and untaken. In a further judgment sent to the parties on 19 December 2019, Employment Judge Morton refused an application for reconsideration.
Mr Smith appealed both judgments (and another judgment dismissing his unlawful disability discrimination claim) to the Employment Appeal Tribunal (Choudhury J, President) (“the EAT”) contending (among other things) that the employment tribunal had erred in its identification of the claims he was pursuing, erred in its interpretation of King and erred in concluding that his pleaded claim was out of time. By a judgment dated 17 March 2021 the appeal was dismissed: [2021] UKEAT 0211-19-1703, [2021] ICR 1194. In short, the EAT held that the tribunal made no error of law in relation to King. King was not concerned with leave that was taken but unpaid. It concerned the right to carry over, until termination, annual leave that is not taken because of an employer's failure to remunerate such leave. It did not suggest that there is a right to carry over leave that was in fact taken, in spite of the employer's failure to remunerate such leave. Nor did the employment tribunal err in its analysis that the pleaded case was limited to a claim for pay for annual leave that was taken, or in deciding that the pleaded claim was presented outside the relevant time limits.
This appeal is a further challenge to those conclusions. There are four grounds of appeal:
i) The employment tribunal misconstrued the CJEU's judgment in King and/or misdirected itself in law in finding that the appellant was not denied his right to annual leave under regulation 13 WTR with the result that any claim he made under regulation 30(1)(a) WTR failed (Ground A).
ii) The employment tribunal erred in law in finding that the appellant had not brought a pleaded claim for the accrued entitlement to paid or unpaid annual leave on termination which was due under regulation 14 WTR, or in respect of any entitlement to paid or unpaid leave which carried over in accordance with King and/or failed to give effect to the principle of effectiveness (Ground B).
iii) The employment tribunal erred in holding that, on the facts, the appellant had made no claim for untaken leave and was only claiming payment for leave he had taken. Further, the employment tribunal erred in holding that it was necessary for the appellant to show that he was in fact dissuaded from taking leave (Ground C).
iv) The employment tribunal erred in holding that a claim in respect of a “series of deductions” brought under section 23(3) ERA was broken by a gap of more than three months between underpayments or deductions. It should have preferred the judgment of the Northern Ireland Court of Appeal (“NICA”) in Chief Constable of Police v Agnew [2019] NICA 32 [2019] IRLR 792 (“ Agnew”) to the EAT's judgment in Bear Scotland Ltd v Fulton [2015] ICR 221 (“ Bear Scotland”) (Ground D).
Mr Smith was represented by Mr Michael Ford QC, Mr Caspar Glyn QC and Mr David Stephenson, and the respondent by Mr Christopher Jeans QC and Mr Andrew Smith. Both junior counsel appeared in the employment tribunal below but their leaders did not. I am grateful to all counsel for the helpful way in which the appeal was prepared and presented on both sides.
The parties' respective cases and the issues to be addressed
On behalf of Gary Smith, Mr Glyn QC made submissions about the scope and effect of the decision in King (and subsequent CJEU authorities), while Mr Ford QC made the running in relation to the remaining grounds. In summary they contended:
i) Both tribunals below misdirected themselves in law and misconstrued the decision in King in concluding that the appellant was not denied his right to “paid annual leave” under regulation 13 WTR. King is not limited to circumstances where the employee has not taken annual leave, but applies equally where annual leave has been taken but is unpaid because the employer refused to remunerate it: see the language of article 7(1), article 31 of the Charter, and King, where the single right protected is the right to “paid annual leave”. That right is protected because anything less is liable to deter workers from taking annual leave and benefitting from the rest and relaxation required. The worker need not demonstrate that he was in fact dissuaded from taking annual leave. Member states may provide for the loss of the right at the end of each leave year. But to lose that right the worker must “actually have had the opportunity to exercise the right conferred on him by the Directive”: see Stringer v Revenue and Customs Commissioners and Schultz-Hoff v Deutsche Rentenversicherung Bund (Joined Cases C-520/06 and C-350/06) [2009] ICR 932; [2009] ECR I-179 (“ Stringer”) at [44] and Kreuziger v...
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