You may have seen the mainstream media cover the recent ruling by the court of appeal against Pimlico Plumbers and in favour of a former plumber after a long-standing dispute with the company over holiday pay.
He successfully argued he was owed holiday pay for his work for the company between 2005 and 2011, despite being employed as a contractor. The ruling not only means that any worker has an entitlement to paid annual leave, but that the employer needs to make their employees aware of this.
Commenting on the court’s decision, Claire Clifford, Director of People, Culture and Skills at EIC said: “While it is too early to see the full implications of this legal judgment, it could potentially lead to many companies dealing with similar claims from former or existing contractors. We’d recommend all businesses take steps now to ensure they have – at the very least – a clear view of the status of their workforce.”
What can your company do?
- Ensure you have a clear view of the status of your workforce, for example are your contractors truly classified as self-employed? What is the level of risk given your current situation with regard to historical holiday pay entitlement?
- Encourage all employees to make use of and provide paid annual leave for workers.
- Ensure your people know that at the end of the holiday year annual leave isn’t carried over.
- Consider clarifying contracts making clear that employees will use up their ‘EU entitlement’ four weeks holiday pay first – this leave isn’t covered by this ruling, thus limiting liabilities.
- Don’t forget to consider potential holiday pay liabilities in the context of business acquisitions and bringing on new staff who might have completely different arrangements to what you have worked with.
- Ensure you take appropriate external legal support to ensure your approach is effective and tailored to your circumstances.
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