The Supreme Court has rejected the appeal and ruled that one of Pimlico Plumbers’ operatives was in fact a worker rather than being self-employed. This is the first of the recent “gig economy” cases to reach the Supreme Court, and is important in the sense of endorsing the view of previous case law on this issue.
Pimlico Plumbers is a plumbing and maintenance company, which engages ‘operatives’ to carry out plumbing and maintenance work on its behalf. Mr Smith was one of those individuals who sought to bring claims in the Employment Tribunal against Pimlico Plumbers including unfair dismissal, wrongful dismissal and disability discrimination.
His ability to bring these claims depended on whether he could establish that he was an employee or worker of Pimlico Plumbers. Pimlico Plumbers said he was an independent contractor and therefore did not qualify for the relevant rights.
The tests of employment and worker status involve a number of factors, including the nature of any written documents between the parties setting out their relationship, as well as how the relationship operates in practice.
The Supreme Court ruled that the dominant feature of Mr Smith’s contract with Pimlico was an obligation of personal performance. Despite the fact that Mr Smith could appoint a substitute, there were serious limitations to this – the substitute had to be another Pimlico operative.
In ruling that Pimlico was not a client or customer of Mr Smith the Supreme Court agreed with the tribunal that there was an umbrella contract between the two parties i.e. one which cast obligations on Mr Smith even when he was between assignments for Pimlico.
They also took into account how much control Pimlico exercised over Mr Smith, referring to the fact that Mr Smith should “wear the branded Pimlico uniform; drive its branded van, to which Pimlico applied a tracker; carry its identity card; and closely follow the administrative instructions of its control room.”
There is nothing terribly new in this decision, although it does highlight the importance of an appropriately drafted substitution clause and being live to the risks of placing limitations on the ability to provide a substitute. Similarly, the degree of control exercised here was not consistent with a self-employed arrangement.
While we would not recommend any change in approach following this case, it does once again reinforce the importance of getting the label right when it comes to employment status. Despite the attempts by Pimlico to create written terms documenting self-employment, the way the relationship operated was that of a worker, with the requisite mutuality of obligations, control and personal service.
This lack of legal certainty over employment status and the spate of cases on this issue was one of the reasons why the Government commissioned the Taylor Report into Good Work. We are still awaiting the Government’s responses to the four consultations that followed the Taylor Report. While it is not clear whether the definition of a worker will change in primary legislation, it seems realistic that further guidance will be issued to define what a worker is in an attempt to remove the uncertainty over status.