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Workers and their right to holidays

15 Jun 2018

 

As long ago as 1875 Parliament identified an intermediate category of working people falling between those who worked as employees under a contract of service and those who worked for others as independent contractors. For in that year it passed the Employers and Workmen Act, designed to give the county court an enlarged and flexible jurisdiction in disputes between an employer and a “workman”; and  it defined a “workman” as, in effect, a manual labourer working for an employer under “a contract of service or a contract personally to execute any work or labour”.

 

From 1970 onwards Parliament has taken the view that, while only employees under a contract of service should have full statutory protection against various forms of abuse by employers of their stronger economic position in the relationship, there were self-employed people whose services were so largely encompassed within the business of others that they should also have limited protection, in particular against discrimination but also against certain forms of exploitation on the part of those others.

 

The Supreme Court has recently ruled on the case of Pimlico Plumbers v Smith on the distinction between a 'worker' and somebody who is truly self-employed. The distinction is important because a worker is entitled to holiday pay and to the benefit of discrimination legislation, whereas a truly self-employed person is not. 

 

Mr Smith worked exclusively for Pimlico Plumbers in London under a contract in which he purported to be self-employed. The relationship with Pimlico Plumbers was terminated and Mr Smith brought several claims in the employment tribunal including a claim of unfair dismissal and failure to pay holiday pay. 

 

The unfair dismissal claim was dismissed as he was found not to be an employee however he was found to be a worker and so was entitled to holiday pay, including several years of arrears. Pimlico Plumbers appealed the original decision to the Employment Appeal Tribunal and the Court of Appeal before arriving at the Supreme Court. Each Court has upheld the Tribunal's decisions. Lawyers following this case will not be surprised at the decision and it offers no new guidance on the distinction between workers and the self employed. 

 

However it is a cautionary note to employers who purport to engage their staff on a self employed basis. Regardless of what may be set out in an agreement, there will always be a high probability that a person who provides exclusive services, during set hours and who cannot provide a substitute to undertake their work shall be found to be an employee or a worker. 

 

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