April/May 2019

Case law update: Pimlico Plumbers

Some of you keen gig economy followers may recall the case of Smith v Pimlico Plumbers which has been running through the courts for some years. On 20 March 2019 an employment tribunal decided that Mr Smith is not entitled to claim unpaid holiday pay to the tune of £74,000.

To recap the background to this case; Mr Smith was engaged as a ‘self employed’ plumber at Pimlico Plumbers for a number of years, before the engagement was terminated by Pimlico. Mr Smith brought a claim that he was a ‘worker’ and not self employed and accordingly he should be entitled to backdated holiday pay under the Working Time Regulations. Significant time and money has been spent over a 7 year period in various courts to determine the issue of ‘worker’ status. Finally, in June 2018 the Supreme Court upheld the lower courts’ decision that Mr Smith was a worker and remitted the case back to Croydon Employment Tribunal to consider what amount of holiday pay was due to Mr Smith. At the time of writing, the written judgment has not been issued but the press releases suggest that Mr Smith’s claim for backdated holiday was considered to have been brought out of time.

Under the Working Time Regulations, a claim for unpaid holiday pay has to brought within 3 months from the date when the payment (for the holiday) should have been made. Mr Smith brought his claim more than 3 months from the date of when he should have been paid for the leave taken. There have been a number of European cases relating to the rights of workers to claim historical unpaid holiday pay at the end of the engagement.

We are of the view that this case will now go through a further number of appeals to consider the ‘out of time’ arguments. Watch this space!

Important employment law changes in April
There are a number of key legislative changes happening this month which employers need to be aware of:

Itemised payslips
From 6 April 2019 itemised payslips need to be provided for both employees but also workers. The payslip should detail the number of hours worked for those whose pay varies according to the amount of hours worked. The Department for Business, Innovation and Skills (BIS) has produced some information on this which includes some useful guidance to whether someone you engage is a ‘worker’ or not. If an employer fails to comply with this, the worker can bring a claim in the employment tribunal for any unpaid hours.

National minimum wage increase
From 1 April 2019 the rate for workers aged 25 or over increases to £8.21.  There are also increases for workers aged 21 to 25 which is up to £7.70, £6.15 for those aged 18 to 20 and £4.20 for those under 18 who are no longer of compulsory school age.

Family leave pay
From 7 April 2019 the weekly pay for family related leave (maternity, paternity, parental or adoption) rises to £148.68 per week.

Sick pay
From 6 April 2019 statutory sick pay increases to £94.25 per week.

Pension contributions
From April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Currently, employers contribute a minimum of 2% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 3% themselves. The new requirements mean that employers and employees will now have to contribute a minimum of 3% and 5% respectively.

Gender pay gap reporting
This was introduced last year for private organisations with 250 or more employees. These companies will again be required to publish their gender pay gap figures on the 4th April 2019. This year is widely considered to be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted last year have been successful.

Maximum award for redundancy and unfair dismissals
A statutory redundancy payment is calculated by multiplying the employee’s length of service by a week’s pay, which is subject to a maximum cap. From 6 April 2019 the cap increases to £525. The same cap on a week’s pay applies to the Basic Award in Unfair Dismissal claims, and the maximum award for loss of earnings in an ‘ordinary’ unfair dismissal claim rises to £86,444 or, if lower, 52 weeks’ pay.

Chloë Leyland, Enhanced HR Solutions