Employee? Worker? Self-employed? Who knows.

The Supreme Court rules in the case of Pimlico Plumbers Ltd and another v Smith [2018] UKSC 29

There have been numerous cases over recent months regarding the gig economy and worker status, with a string of decisions confirming that, among others, Uber, Addison Lee and CitySprint all employ ‘workers’ as opposed to self-employed contractors. Yesterday, the Supreme Court handed down its much-awaited decision in the case of Pimlico Plumbers, confirming that a plumber was a worker for the purposes of employment law, despite his being VAT-registered and paying self-employed tax.

Gary Smith worked for Pimlico Plumbers under an agreement which clearly stated him to be an independent contractor, operating in business on his own account. Mr Smith was, however, required to wear a company uniform, drive a branded van with a tracker, work a 40-hour week, follow instructions from the central control room and was subject to non-compete restrictions following the termination of his engagement. The Employment Tribunal, Employment Appeal Tribunal and Court of Appeal all considered Mr Smith to satisfy the definition of a worker, such that he was entitled to bring claims for discrimination, holiday pay and an unlawful deduction of wages.

Pimlico Plumbers again sought to appeal the decision, however the Supreme Court has unanimously upheld the previous decisions. In making this decision, the Supreme Court considered the 2 key factors to be that (i) Mr Smith was required to perform the services personally (the right of substitution included in the contact was limited only to other Pimlico workers and was not therefore unfettered); and (ii) the level of control operated by Pimlico over Mr Smith was not considered to be consistent with the contention that Mr Smith was self-employed.

The Supreme Court’s decision has unfortunately not introduced any new principles or law, nor clarified the existing law on employment status – something which is now desperately needed. In early 2018, the Government published its response to the Taylor Review of Modern Working Practices which, among other things, had recommended codifying the test for employment status and proposing an online tool to determine employment status. Whilst the Government clams to be in agreement with the Taylor recommendations, it has yet to make any firm commitments in relation to the same.

It is clear that current employment legislation is struggling to keep pace with the evolving nature of the workplace and employment status; without any further guidance from the Supreme Court – and in the absence of Government intervention – we cannot help but agree with the founder of Pimlico Plumbers, Charlie Mullins, when he states that this will lead to a ‘tsunami of claims’.

Should you have any questions in relation to this article please contact Nathalie Ingles.

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