Court of Appeal clarifies the scope of the right to “paid annual leave” under Art. 7(1) WTD

In a landmark decision, Smith v Pimlico Plumbers (No 2), the Court of Appeal clarified the scope of King and Art. 7(1), holding that the single composite right in EU law is to take annual leave and to have the benefit of the remuneration that goes with it when the leave is taken. The CJEU’s reasoning in King covers the worker who takes unpaid leave because the employer refuses to recognise their right to paid leave and pay them, which means that the worker is prevented from exercising the single right afforded by Art. 7(1) WTD. The employer must bear the consequences of the refusal to recognise and reimburse the right; is under a duty to establish the correct position; cannot be allowed to benefit from not paying for annual leave to the detriment of the worker’s health.

The C/A also resolved the conflicting authorities of Bear Scotland (EAT) and Agnew (NICA) in favour of the latter. Per LJ Simler held (obiter): “My strong provisional view is that Agnew is correct on this point. With respect to the EAT, the reasoning in Bear Scotland drives no support from the express words used in section 23(3) ERA 1996…. There is nothing to suggest that the three-month time limit was intended to restrict or qualify the meaning of a “series of deductions”… the word series is an ordinary English word connoting a number of things of a similar or related kind coming one after another. It is a question of fact and degree, based on the evidence, whether deductions are sufficiently similar or related over time to constitute a ‘series’”

This is a mammoth victory for workers’ rights and employers will pay a heavy price if they mischaracterise the employee status of their workers as self-employed.

David Stephenson of Doughty Street Chambers has acted for Garry Smith throughout his protracted fight for justice instructed by Jacqueline McGuigan, TMP Solicitors LLP.

CA Judgment can be found here.