The Supreme Court has this week granted Pimlico Plumbers permission to appeal the Court of Appeal’s decision which found former plumber, Gary Smith, was a worker rather than self- employed.
Unlike employees, workers do not benefit from the full range of employment rights but they are entitled to basic rights such as the minimum wage and holiday pay. The genuinely self-employed on the other hand have few legal rights and do not have jurisdiction to bring claims in the Employment Tribunal. Defining the differences between an employee, a worker and the genuinely self-employed is a complex area and, as demonstrated by the recent high-profile cases involving Uber, Deliveroo and most recently Addison Lee, is becoming an increasingly disputed matter in the current gig economy.
Mr Smith worked for Pimlico Plumbers from 2005 to 2011 under a contract which defined his position as a ‘self-employed operative’. Mr Smith provided his own tools, was VAT registered and responsible for handling his own tax and insurance. However, the contract also required him to wear a Pimlico Plumbers uniform, drive a branded van leased from Pimlico (fitted with a tracking device) and could only be contacted by customers through the company. He could swap shifts with other operatives but could not send a substitute of his own choosing without written permission from Pimlico Plumbers. Provided Mr Smith worked a minimum number of hours a week he could choose when he worked and which jobs he wished to accept.
Following the termination of Mr Smith’s contract he brought numerous claims in the Employment Tribunal. Some of those claims, such as Unfair Dismissal, would only be available to employees and therefore the Tribunal had to determine his employment status.
The Tribunal decided Mr Smith was not an employee for a number of reasons including the fact that he personally bore a substantial financial risk. However, whilst he lacked employee status and therefore could not bring an Unfair Dismissal claim, he was held to be a worker therefore his wage and holiday claims could proceed. The key factor in determining Mr Smith’s worker status was that he was expected to provide the services personally and did not have the absolute right to send a substitute of his choice in his place. The Tribunal’s decision was upheld by the Employment Appeal Tribunal which was appealed by Pimlico Plumbers. However, in February 2017 the Court of Appeal agreed with the previous Tribunals’ decisions ruling that Mr Smith was a worker because he provided work personally for Pimlico Plumbers, was obliged to work a fixed number of hours a week and was restricted from working for competitors.
The judgements in these cases have far reaching implications for businesses and those individuals who provide services to them. The judgments to date in this case, and the decisions in the Uber, Deliveroo and Addison Lee matters, indicate that the courts have a leaning towards finding worker status where possible and therefore can grant basic statutory rights to those engaged under purported ‘freelance’ contracts. However, the Supreme Court has been known to make unexpected decisions in the past and the outcome of Pimlico Plumbers’ appeal is likely to be a defining case for the gig economy cases.
Determining the difference between an employee, worker and someone who is self-employed can be tough and each case turns on its own facts. For further information get in touch with our experts who can advise individuals and companies of their rights and obligations.
Written by Tess Barrett