Pimlico Plumbers and Charlie Mullins v Gary Smith is the latest in a line of highly publicised cases that have gone against businesses seeking to treat operatives as independent contractors rather than workers. Particularly in light of a general desire for increasingly flexible working practices, some businesses are based on a model of self-employment for their workforce. The Court of Appeal in this case reminds us that it is the reality of the situation that is key, rather than any labels in the contractual documentation, and that models denying employment rights may be subject to heavy scrutiny.
Determining the employment status of an individual for legal purposes requires a careful analysis of the facts. Here, despite a number of factors indicating self-employment (including Mr Smith’s own belief as to the nature of the relationship), he was held to be a worker. Essentially, this was because of the obligation on him to provide his services personally. The right of substitution (ie the operative being given the freedom to choose someone else to provide the service) was considered in a lot of detail and the court thought that only if there is a genuinely unfettered right to provide a substitute will it have an impact on worker status. A conditional right to substitute may or may not be consistent with worker status, depending on the conditionality. For example, if substitution is only possible with the consent of another who has absolute discretion to refuse, this is still likely to amount to a personal performance requirement on the individual.
This judgment is consistent with the current trend but will certainly not be the last word on the matter – there is too much at stake for these cases not to be appealed to the full.