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On Wednesday 13 June, the Supreme Court gave its judgement in Pimlico Plumbers v Smith.
In what is being described as a landmark decision, the Supreme Court confirmed that an apparently self-employed plumber was, in fact, a worker and entitled to all the accompanying employment rights.
Unlike employees, workers do not benefit from all available employment rights and protections, but they are entitled to basic rights like holiday pay and minimum wage. In contrast, self-employed individuals have very few legal rights and are not able to bring claims in the Employment Tribunal.
The boundaries between the three types of employment status - employees, workers and self-employed - have become blurred in recent years. High-profile cases, modern technology, changing employment practices and the rise of the “gig economy” have all muddied the distinction between ‘worker’ and ‘self-employed’.
In the middle of this confusion stood Gary Smith, who was a plumber for Pimlico Plumbers Ltd between August 2005 and April 2011. Mr Smith worked for Pimlico Plumbers under a written agreement and a handbook. This agreement was drafted in quite confusing terms and governed the relationship until Mr Smith was dismissed in May 2011 following a serious illness.
Mr Smith was required to work a minimum number of hours across a five-day week and wear a branded uniform and drive a branded van. He could swap shifts with other operatives, but could not select an external substitute without permission from Pimlico. Provided Mr Smith worked his weekly hours, he could choose when he worked and which jobs to reject.
Mr Smith claimed against Pimlico for holiday pay, unlawful deductions from wages, and disability discrimination. To be able to bring these claims, he had to establish that he was a ‘worker’ under the relevant legislation. Mr Smith succeeded at the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal. The company appealed further to the Supreme Court.
The Supreme Court found that Mr Smith did provide a personal service, largely because of his limited ability to appoint a substitute. Mr Smith could only substitute another Pimlico worker, which the court decided was the equivalent to swapping shifts with a colleague.
The Supreme Court also held that Mr Smith was not self-employed or operating his own business, as Pimlico Plumbers was not a client. In deciding this, it noted the tight control that Pimlico had over Mr Smith in relation to branded uniform and van, the administrative aspects of the job, when and how he was paid, and the post-termination restrictions on his capacity to compete.
Therefore, Mr Smith was held to be a worker and is now free to bring his claims to the Employment Tribunal.
It is important to remember that each case will turn on its own facts. These situations will continue to be decided on issues such the right of substitution and the degree of control exercised over the staff.