The Supreme Court has ruled against Pimlico Plumbers in a landmark case on the true employment status of a self-employed contractor.
This decision on 13 June could have substantial ramifications for businesses that use the services of individuals on a self-employed or contracted basis, as Andrew Rowell, head of employment law at Spearing Waite explains.
The Pimlico case has been closely watched by businesses operating in the gig economy, which is estimated to involve well over one million people in the UK working for companies such as Uber, Deliveroo and scores of less high-profile companies.
Gary Smith, who worked for Pimlico Plumbers for six years, had claimed he was a worker and not, as Pimlico claimed, self-employed.
Even though Mr Smith’s contract described him as “self-employed”, he wore the company uniform, leased a Pimlico branded van and had to work a minimum number of hours per week. The Supreme Court also said that Pimlico Plumbers exercised “tight administrative control” over Mr Smith and that he “undertook to do the work personally”.
The Supreme Court agreed with the initial Employment Tribunal ruling that Mr Smith was a worker, and therefore entitled to certain benefits from Pimlico, such as holiday pay.
This is a very important judgment by the most senior court in the land on the definition of ‘worker’, ‘employee’ or ‘self-employed’ status, with implications both for organisations wanting to maintain a flexible workforce and the wider gig economy.
However, it should be noted that the Supreme Court also made it clear that the judgment rested heavily on the unique facts of this case and does not break any new legal ground.
Until new ‘worker status’ legislation is introduced, uncertainty will continue, with each case turning on its own facts and the Courts’ interpretation of the existing legal tests for worker status.
This case highlights the confusion over the categories of employees, workers, and the self-employed and the difficulties that can arise where the situation is not clear-cut, and where contractual documentation is contradictory.
Whilst the Pimlico Plumbers case may not give the total clarity that businesses and freelancers are seeking, it could open the door to a raft of claims by individuals who feel they are entitled to greater employment rights than they have received.
As such, it is essential to understand the employment status of your workers and that you are contracting with them correctly. The employment law experts at Spearing Waite can help to clarify your situation and minimise the risk of a future dispute.
For effective, friendly advice on workers’ rights or any other employment law matter, please contact the Spearing Waite employment law specialists in Leicester.
Andrew Rowell, partner and head of employment
Katherine Cooke, associate solicitor – employment