On 10th February 2017 the Court of Appeal rejected the widely publicised appeal by Pimlico Plumbers and found that one of the company's plumbers, Mr Smith, was a "worker".
Employees are workers, but not all workers are employees.
By the time it reached the Court of Appeal, the Pimlico case was all about holiday and sick pay rights. Whilst this decision has importance for businesses in our "gig" economy, it says nothing new about the legal interpretation of an "employee" for the purposes of establishing a claim following an accident at work.
What is not emphasised in all the Pimlico Plumbers publicity is that Mr Smith had tried to argue he was an employee and he in fact failed in that argument.
Whilst the legal distinction between an employee and a self-employed or independent contractor remains the same, the Pimlico case was a useful summary of the current law. The distinction is largely one of fact in each case and the overriding lesson is to take all factors and circumstances into account, rather than assume ticking one or two boxes will get you "home".
In general, it can be said that independent contractors:
- Retain control over their working hours
- Dictate their workload
- Control how they perform their job and whether to delegate the work
- Provide their own tools and equipment
- Cover all expenses related to the work
- Have a financial interest in how the job is done.
In contrast, an employee will, in general:
- Work under the direction and control of another
- Be told what to do and when to do it
- Have tools and equipment supplied to them
- Bear no direct financial risk in carrying the task at hand
- Have some guarantee of a minimum number of hours work.
The Courts will also look at what level of equal bargaining power existed when a worker agreed to the terms of a contract and whether written terms and conditions actually represent what was agreed, rather than what happens in reality.
This ongoing legal "bun fight" on the question of what makes a worker an "employee" is a key concern for businesses - in particular the higher risk agricultural and construction industries where serious and life changing accidents can occur and where the level of liability cannot be measured before you know the answer.