If, like our Employment team, you’ve been following the case of Mr Gary Smith v Pimlico Plumbers, you’ll no doubt have seen that on 13th June 2018 the Supreme Court handed down its highly anticipated judgment.
The Court confirmed that Mr Smith’s status was that of a worker – and not self-employed, as Pimlico had argued. While ‘workers’ don’t enjoy the same protections as employees, they do benefit from some rights: including national minimum wage, and holiday leave and pay.
In its judgment, the Supreme Court essentially found that the original Tribunal was entitled to make the findings it did. It found that:
- Although Mr Smith had a right of substitution (a key criteria for self-employed status), it was very limited. He could only substitute himself with another individual who was contracted to Pimlico
- There was an overarching contract between Mr Smith and Pimlico
- Pimlico was not Mr Smith’s client or customer. He was subject to its control: required to wear branded clothes, lease a branded van, and work a minimum number of hours. Pimlico also set Mr Smith’s terms of payment, and his contract made several references to wages, dismissal, and gross misconduct – which is inconsistent with Pimlico’s claim that they had a supplier/ client relationship.
The Court was clear that its judgment was fact specific. But, thousands of workers in similar positions may now seek the additional benefits that worker status brings. Without formal guidance on how businesses should classify workers, each case will need to be decided on its facts. This will inevitably impact gig economy businesses, as well as the tribunal system – which is already struggling to cope with the growing number of claims.
It’s likely that some businesses will attempt to reach an agreement with their self-employed contractors to avoid litigation. Some may also seek to change how they operate, to lower the risk of individuals claiming worker status. This will work out better for some individuals, and worse for others.
The gig economy will continue to evolve – and the current employment legislation will become less effective. Given that Brexit is monopolising the government’s time, we may not see any meaningful response from them for some time yet.
A plumber has won a legal battle for working rights in a Supreme Court ruling expected to have huge ramifications for freelance workers. Gary Smith had worked solely for Pimlico Plumbers for six years. Despite being VAT-registered and paying self-employed tax, he was entitled to workers' rights, the court ruled. The ruling will be closely read by others with similar disputes, many of whom work for firms in the so-called gig economy. An employment tribunal was "entitled to conclude" that Mr Smith was a worker, the court ruled. As a worker Mr Smith would be entitled to employment rights, such as holiday and sick pay.