Pimlico Plumbers holiday pay ruling could trigger wave of claims

Aaron Morby 5 months ago
Share

Contractors are being warned to clarify the status of self-employed subbies following a landmark supreme court ruling that saw a Pimlico Plumbers worker win a claim for £74,000 in holiday back pay.

In a long-running legal battle, heating engineer Gary Smith, who worked for the company between 2005 and 2011, claimed he was owed holiday pay by Pimlico after the Supreme Court had previously ruled separately that he was a worker and not self-employed.

In his subsequent case that followed on from the employment status ruling, Smith’s claim for backdated holiday pay was at first rejected by an employment appeal tribunal on the grounds that he had not filed his claim quickly enough.

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

But the Court of Appeal has now overturned the lower courts’ judgments in a landmark decision this month that will have far-reaching impacts across the industry.

It held 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 ‘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.’

The ruling has prompted several industry trade bodies to write to its member contractors.

The Electrical Contractors Association warned members the ruling was important to all employers who deny workers the right to paid annual leave, usually on the basis that they are ‘self-employed.’

It reminded firms of the importance of correctly determining employment status and implementing the applicable rights that status confers.

The industry’s largest payer of subcontractors, Hudson Contract, said the ruling upped the ante but added it all hinged on ensuring the correct employment status.

Ian Anfield, managing director of Hudson Contract, said that it was important to remember that not all subbies are automatically ‘workers’.

He said: “The key fact in the Smith v Pimlico Plumbers case was that very early on an Employment Tribunal found Smith was a ‘worker’ – without that ruling the latest simply would not have happened.

“However, the bigger picture is that many users of subbies will be at risk.

“We have seen an explosion of so-called commercial contractors and employment agencies setting up CIS payroll companies to generate cash.

“The vast majority cut corners and wouldn’t have the funds or the knowledge to deal with complex cases.

“This places their clients at huge risk so there could be thousands of subbies out there eyeing Pimlico-type claims. If the economy turns and things tighten up we can expect to see lots of these cases go to court.

“During the last recession, before most of our competitors even existed, we fended off a number of spurious worker claims and our experience goes back even further than that.

“The question for contractors going forward is whether their current arrangements are watertight and can stand up to scrutiny.

“There’s no doubt this ruling by the Court of Appeal has upped the ante by increasing financial liabilities if a status case is lost, so it must be time to re-examine and scrutinise the credibility of what payroll companies claim they bring to the table.”

 

Latest news

Osborne makes £45m construction loss

Sale of infrastructure business balances books as contractor looks for zero-carbon wins
9 hours ago

John F Hunt forecasts record revenue and profits this year

Demolition contractor back on strong financial footing after previously setting aside £5.6m for bid rigging probe
8 hours ago

Notting Hill Genesis names £2.8bn framework winners

26 firms land places on main contractor deal: Full list
8 hours ago

Green light for dual hotel scheme at Nine Elms

Two new hotel towers will share common basement
8 hours ago

Trials start on cement-free pre-cast piles

Aarsleff is hopeful a product will come to the market shortly
9 hours ago

Ex-Telford Homes boss to run green house builder

Jon Di-Stefano takes helm at M&G backed Greencore Construction
9 hours ago

Subcontractors told to stop work on Brymor sites

£80m revenue southern contractor files letter of intent to enter administration
1 day ago

House builder Chartway sold to private equity firm

Cabot Square Capital signs another major construction deal
1 day ago

Murphy Group appoints new chairman

Capita chairman and investment banker John Cresswell to start in November
1 day ago

Tolent seals £40m Newcastle ‘future-living’ housing job

135-home Vaux scheme will be first of four neighbourhoods totalling 1,000 homes
1 day ago

Cruden takes first job at £1.3bn Edinburgh Waterfront scheme

Preferred bidder named for first 750 net zero homes at new Granton Waterfront coastal town
1 day ago

Trio of student towers to be built at Brent Cross Town

Ground works under way with main contractor due to be appointed next month
1 day ago

Keltbray gets start date for £50m motorway upgrade

Contractor hails "significant step forward" for highways business
2 days ago

Site workers settle for 5% pay increase

Contractors and unions agree one-year deal following months of talks
3 days ago

Rising wages and skills gap to overshadow materials issues

Materials and product Inflation tops 20% so far this year, but labour set to be next big headache
2 days ago

Erith pays £2.8m bonus to staff after ownership switch

Around 450 staff have on average received over £6,000 since move to employee ownership five years ago
2 days ago

Algeco lands £19.2m Leeds modular school scheme

Offsite specialist will supply and install 192 steel frame modules
2 days ago

Eight firms placed on £750m Midlands and Eastern framework

Next generation framework for jobs up to £7.5m employs a parallel plotting structure
2 days ago

Aston Villa unveil plans for £100m stadium expansion

Construction set to start next year on first phase of Villa Park upgrade
2 days ago

Skanska bans ‘swing-up’ lorry loaders after site death

Banned vehicles are used mainly to deliver bulky items like cabins and welfare units
3 days ago

HS2 agrees £78m variation on Euston tunnels cost

Skanska Costain Strabag seals extra payment for agreed changes to the scope of work
3 days ago

B&K breaks ground at £150m Newcastle HMRC job

Work gets underway on city's largest ever office project
3 days ago

New building safety laws come into force today

Leaseholders protected and new regulator for construction product manufacturers in wake of Grenfell
3 days ago

Peel submits plan for £150m cannabis production plant

Isle of Man seeks to become a leader in the emerging medicinal cannabis sector.
3 days ago

Tarmac buys first electric concrete mixer truck

Country's first battery powered mixer truck will start site deliveries this Autumn
3 days ago

Tilbury Douglas wins Dorset hospital upgrade

Construction could start in 2024 after Dorset County Hospital secures £77.3m of funding
4 days ago

McGee in £2.4m provision for bid-rigging probe

Demolition contractor says provision will cover the expected fine over cover pricing ring
4 days ago

First designs for £275m HS2 Midlands nerve centre

Contractor due to be named in Autumn next year for Washwood Heath hub
4 days ago

London Bankside Yards next project switches from resi to offices

Revised plan submitted for 18-storey office next to Blackfriars Bridge
4 days ago

Plans in for Cambridge North major mixed-use scheme

Over 400 homes and nearly 600,000 sq ft of office and shops planned for railway sidings site
4 days ago

Contractor services