Employment Status Update

Alert! Supreme Court: Pimlico plumber was a 'worker'

13 June 2018

Worker, employee or independent contractor? The question of where the line is drawn between these staffing categories is currently a hotly contested topic – and the Supreme Court has today published a landmark decision on this issue, finding that a purportedly self-employed plumber was, in fact, a 'worker'.

The case of Pimlico Plumbers Limited v Smith concerned an individual engaged on a conventional basis, but has wider ramifications for 'gig' workers. 

The claimant, Mr Smith, worked for Pimlico Plumbers as a plumber and issued invoices to the company, claimed tax deductions for his work, and had a limited right to send other workers to undertake assignments on his behalf. He was also required to drive a branded Pimlico Plumbers van, wear branded uniform and could only send a substitute 'contractor' in very limited circumstances.

As we reported in February 2017, the Court of Appeal found that Mr Smith was a 'worker' and also an 'employee', under the more limited definition in the Equality Act 2010 (effectively the same definition as a worker).

Pimlico Plumbers appealed that decision, arguing that Mr Smith was engaged on a genuinely self-employed basis, but the Supreme Court (SC) has today rejected that argument, finding that Pimlico engaged Mr Smith as a worker. In doing so, the SC focussed on the two elements of the test for 'worker' status.

1. Whether personal service was required by Mr Smith. The SC found that this was the case, largely because of the repeated focus, in Mr Smith's contractual documentation, on his personal conduct / abilities, e.g. references to "your skills" and "your appearance must be clean and smart." The right to send a substitute operative to undertake work on Mr Smith's behalf was so limited that it did not erase the requirement for personal service.
2. Whether the relationship between Mr Smith and Pimlico Plumbers was not that of a 'client / customer'. The SC found that Pimlico Plumbers was not acting as Mr Smith's client or customer. At paragraph 48 of its judgment, the SC noted the "severe terms" of Mr Smith's contract, which "betrayed a grip on his economy inconsistent with being a truly independent contractor". This included, for example, the suite of restrictive covenants in the contractual documentation and the references to terms such as "wages", "gross misconduct" and "dismissal", none of which were consistent with a client / customer relationship.

In conclusion, the SC found that Mr Smith is entitled to proceed with his claims against Pimlico Plumbers, on the basis that he was engaged as a 'worker' and therefore entitled to bring claims for paid annual leave, unlawful deductions from wages and protection from discrimination.

The full judgment is available to download here.

In related news, it was reported last week that employment tribunal proceedings have been launched against Amazon by its delivery drivers, who will argue that they are entitled to be treated as employees, rather than independent contractors.  The delivery drivers are claiming they are entitled to sick pay, holiday pay and the national minimum wage.

Given the high profile nature of these cases, and the guidance that is now available, it would be prudent to review your current contractual models and surrounding practical arrangements, to ensure that they reflect the up to date position following the Supreme Court's decision. Please do contact me if you require any advice or assistance.