Case Update: Alston and Others v The Doctors Laboratory Ltd and Others
Following the Court of Appeal’s significant ruling last year in Smith v Pimlico Plumbers Ltd, in the case of Alston and Others v The Doctors Laboratory Ltd and Others the Employment Appeal Tribunal (EAT) considered the approach to be taken with respect to time limits in holiday pay claims (for paid annual leave) under the Working Time Regulations 1998.
The general time limit to pursue a claim for holiday pay is usually only 3 months (less a day) from the date holiday pay would have been ordinarily been paid following a period of annual leave (subject to any extension granted by correct use of the ACAS Early Conciliation process).
The legal proceedings in Alston were initially stayed pending the Court of Appeal’s ruling in Smith v Pimlico Plumbers Ltd in February 2022, subsequently the stay on the proceedings was lifted and the appeal was heard.
The appeal involved nearly 50 claimants working as couriers delivering various medical products for this clinical laboratory and diagnostics services company, TDL. Their claims were for the 4 weeks’ holiday pay provided to ‘workers’ by the Working Time Regulations 1998, and for some of the workers non-payment of holiday pay dated back several years. From January 2018 TDL began paying holiday pay.
At the EAT the claimants relied on the decision in King v Sash Windows Ltd & Anor and argued that their 4 weeks’ holiday pay entitlement carried over year after year and continued to accumulate (or until the termination date in cases where employment had ended). They also argued that the EU legislation provided a single right to paid annual leave and it was irrelevant whether or not they had taken unpaid leave (i.e. time off with no payment of holiday pay) during a leave year.
The EAT held, as per the ruling in Smith v Pimlico Plumbers Ltd, that the claimants were entitled to carry over any untaken paid annual leave including taken unpaid leave until termination of employment or, if earlier, until the workers had been provided with a facility to exercise the right to paid annual leave. The EAT reiterated the following principles with respect to holiday pay:
- a worker could carry over and accumulate a claim for a payment in lieu on termination if they were prevented from exercising the right to paid annual leave and did not take some or all of the leave entitlement, or took unpaid leave, for reasons beyond their control, because the employer refused to recognise the right to paid annual leave;
- the 3-month time limit for making a claim, which ran from the termination of employment, applied in either case; and
- provided that a claim for payment in respect of the breach of those rights was made within a period of three months; beginning with the date of termination, the claim would be in time.
The above decision serves as an extremely useful present-day reminder for all employees and workers of their rights to accrued holiday pay either whilst they are still employed or upon termination, regardless of whether they had exercised the right to take annual leave or not. Also, we have three other take-aways:
- Where an employer refuses to recognise a worker’s right to paid annual leave the workers can continue to accumulate that leave;
- remember there is still a 3-month time limit which can run from the termination date or from the point where the employer stats paying it correctly, that’s a tight timescale and can easily slip by;
- as these rights originate in EU law, the EU Retained EU Law (Revocation and Reform) bill ‘sunset’ provisions could, unless the government decides otherwise, remove all statutory holiday rights as soon as December 2023.
Author: Omar Ghaffoor, Solicitor, Employment
