We have previously reported on the decision made by the Court of Appeal in Pimlico Plumbers & Charlie Mullins v Gary Smith in which Mr Smith, a self-employed individual was found to be a “worker” when he brought a claim for unfair dismissal after Pimlico Plumbers refused to cut down his working hours after he suffered from a heart attack.
The decision was appealed again and the Supreme Court has now handed down its landmark judgment, upholding the Court of Appeal’s decision that Mr Smith was entitled to “worker” status and accompanying workers rights. Such rights include the entitlement to national minimum wage, paid holiday and the ability to bring discrimination claims.
The Supreme Court provided that the Employment Tribunal was “entitled to conclude” that Mr Smith did fall within the description of a “worker” under the Employment Rights Act 1996, despite working under a contract which described him as an “independent contractor”, paying tax on a self-employed basis and being VAT-registered.
Considerations of the Supreme Court
Pimlico Plumbers argued that Mr Smith had the freedom of a self-employed individual as he was permitted to substitute his assignments to someone else if he so wished. However, the Supreme Court considered the “the dominant feature of Mr Smith’s contract was that he must do the work himself”. Mr Smith did not have the right to substitute an assignment to just anyone. As found by the Employment Tribunal, he could only substitute a shift with another operative of Pimlico Plumbing, who would also be bound by their “tight administrative control”. The Court therefore found Mr Smith to be a “worker” unless it could be argued that Pimlico Plumbers was a client or customer of Mr Smith.
Further, Mr Smith was required to hire and drive a branded Pimlico Plumbers van, wear a branded uniform, carry an ID badge and to follow the strict instructions of its control room. The terms of Mr Smith’s contract stipulated that Pimlico Plumbers were not obliged to offer him any work and, in turn, Mr Smith was not obliged to accept any work. However, Mr Smith was subject to a separate provision contained in a company manual which stated that he should work a minimum of 40 hours per week.
The Supreme Court found that the above factors strongly mitigated against the notion that Pimlico Plumbers was a client or customer of Mr Smith. It was held that “whilst the contract did provide him with elements of operational and financial independence, Mr Smith’s services to the company’s customers were marketed through the company”. Therefore the Employment Tribunal was entitled to find Mr Smith to be a “worker” under the 1996 Act and subsequently dismissed Pimlico Plumbing’s appeal.
Implications going forward
The Supreme Court ruling means that an employment tribunal can now proceed to examine Mr Smith’s action against Pimlico Plumbers as a worker, including a claim that he was unfairly dismissed.
In a wider sense, the Supreme Court’s decision could have huge implications for many freelance workers. It is also expected that Mr Smith’s claim will be closely followed by companies such as Uber, Deliveroo and City Sprint all of whom operate a “gig” model. However, the Supreme Court has made clear that such cases will continue to turn on their own facts.
Farleys Employment Law & HR team can review and provide recommendations with regards to staffing structures, individual status, existing contractual documentation and/or advice and assistance with regards to employment status and the implications of the above ruling in the “gig” economy.
Contact the Employment team on 0845 287 0939 or submit your enquiry online.