Take it or leave it?

February 27, 2022

Claims for unpaid leave likely to have more takers after the decision of Smith v Pimlico Plumbers says Abigail Holt

A new area of potential employment dispute litigation has opened up following the recent Court of Appeal decision of Smith v Pimlico Plumbers [2022] EWCA Civ 70 which analyses whether and in what circumstances “workers” are entitled to paid leave.

Employers and employees have long moulded the duties, responsibilities and obligations of occupational relationships to suit them best, but under the influence of ideas of equality and rights for individuals, the law has attempted to police the boundaries of the employment relationships so that neither side of the worker/payer-of-wages association is exploited. Issues relating to who is entitled to take paid holidays has been a thorny issue on the frontier of who- is-genuinely-a-worker-with-rights-to-paid-holidays, and who is essentially self-employed, in the Wild West of flexible working arrangements. Ken Loach’s film “Sorry We Missed You” graphically illustrates some of the challenges of the so-loosely-called “gig economy” from the perspective of a delivery driver trying to juggle his work and family relationships whilst his wife is similarly engaged as a domiciliary carer and failing to meet the needs of her teenage children.

Smith is likely to open the door to a batch of new potential claims for a large group of individuals who might be loosely referred to as “gig” workers and who are likely to claim that, like Mr Smith, they have been deprived of pay during annual leave, perhaps because they have been wrongly characterised and treated as “self-employed independent contractors” or otherwise unlawfully treated as ineligible for paid leave.

The result of Mr Smith’s case means that he can recover compensation for all the unpaid leave that he took during his employment. This decision is over and above a line of legal authorities and European jurisprudence in previous court decisions that have confirmed that certain types of employment arrangement have created the status of “worker”, even for “gig”-type workers who can now claim monetary compensation for leave that they failed to take because they did not think that they were entitled to it at the time.

Whilst the over-arching principle, that workers are entitled to four weeks of paid leave a year, is all very well, the question of who is a “worker” is a legal can of worms. And no crystal ball is required to see that many bitter disagreements will arise where the parties are unable to agree the legal characteristics of the work-related arrangement they reached; such disputes potentially inflamed by falling out over other employment-related disagreements.

As things stand, employment claims and disputes can be resolved by the Employment Tribunal by specialist Judges, but generally (there are important exceptions where employment continues) only once an employment relationship has ended. However, many months of delay is baked into the system, (with case backlogs exacerbated by the closing of hearing centres during the COVID pandemic, a slew of employment disputes generated by changes in working practices during the pandemic and disputes generated by mandatory vaccination for certain occupations). The Employment Tribunal does have the option of providing judicial mediation, but this is only offered on the more complex cases listed for three days or more.

Therefore, an increasingly attractive solution, particularly where speed and privacy in resolution are required, and with built-in costs-saving, is mediation; particularly when parties can agree within the mediation to certain terms of resolution that an Employment Tribunal Judge cannot order, such as an apology or a reference.

Mediation can be used to avoid or resolve disputes at several stages as follows: mediation is a very attractive “prophylactic” procedure in the context of an employment dispute where the parties want to continue their professional relationship; mediation can be attempted by parties where a potential claimant is on the ball, well-organised and who wants to keep Tribunal proceedings as the last resort if they cannot resolve their employment dispute within 3 months of their employment ending; and finally, mediation can still be engaged in once Employment Tribunal proceedings have been commenced but before the case is listed for a final hearing.

Whilst parties to a private mediation have to bear the costs of the mediation and preparing for it themselves, particularly if they are prepared to confront occupational issues quickly and nip the employment-related dispute “in the bud”, then there is a good chance that they will save considerable upset, time and money in the long term, meaning that they can dedicate themselves to more rewarding activities than worrying about their work-related dispute; activities like watching films!

1949 Ealing comedy “Passport to Pimlico” is more fun than Ken Loach’s “Sorry We Missed You” but there are some loose themes that resonate with recent developments in employment law. The film communicates a hankering after a continental lifestyle in austere post-war London. Meanwhile Pimlico Plumbers discusses and upholds European legal values which still pertain in the UK post-Brexit!

Garden Court Mediation

Garden Court Mediation