Pimlico Plumbers – Supreme Court upholds Tribunal decision in Employment Status Case
The decision of the Supreme Court to reject Pimlico Plumbers’ appeal against the Employment Tribunal’s decision that one of its operatives should be recognised as a worker, will be significant for freelance workers and firms in the “gig” economy.
The case involved a plumber, Gary Smith, who had worked for Pimlico Plumbers for six years. Although he was VAT registered, and paid self-employed tax, he sought to establish that he was a worker rather than self-employed. This was as a result of Pimlico Plumbers taking away Mr Smith’s branded van, which he had hired, following their refusal to reduce Mr Smith’s working hours after he suffered a heart attack.
Mr Smith claimed he was dismissed and sought to bring Employment Tribunal proceedings for unfair dismissal, which he would not be entitled to do as a self-employed contractor. The Supreme Court ruled that the tribunal was correct to conclude that Mr Smith was a worker.
‘Workers’ have certain employment rights including holiday pay, sick pay, minimum wage and the ability to bring discrimination claims. The genuinely self-employed have no employment rights at all although they have protection for health and safety and, in some cases, discrimination. The Supreme Court’s decision means that Mr Smith can now proceed with his unfair dismissal claim against Pimlico Plumbers as a worker.
Although the ruling will create publicity which may mean that more contractors will be encouraged to challenge their legal status, the decision in this case does not necessarily mean that they will succeed.
One of the key issues in determining employment status is the degree of control employers have over those engaged by them. In the case of Pimlico Plumbers, operatives were required to work exclusively for Pimlico Plumbers, to wear uniforms, comply with personal conduct guidelines and liaise with the company regarding time off work. They were not free to decide when to work, which is one of the indicators of self-employed status. Therefore future claims will still be decided upon specific facts and the business model of the employer.
The combination of this decision and last year’s Taylor Review into the gig economy may increase pressure upon gig economy employers to provide a greater balance between flexibility and job security to avoid potential tribunal proceedings and ensure insecure workers are not taken advantage of.
Businesses should take note of the fact it will not be possible to exercise the degree of control over self-employed workers that employment contracts provide for without those workers being entitled to certain rights that the genuinely self-employed are not afforded. It is therefore important to ensure that any contracts or service agreements are carefully drafted to ensure confusion does not arise.
Elaine Howard is an Associate Director with the practice.
For advice concerning employment matters generally please contact Elaine at our offices on 0121 314 0000 or firstname.lastname@example.org