Court rules against Plimlico Plumbers in 'Worker' status employment case

There has been yet another important Employment Law development following the recent Court decision (this time by the Court of Appeal) regarding the very topical question of “worker status”. This most recent Court decision follows on from similar high profile cases involving Uber and CitySprint which covered this same grey area within Employment Law.

The case of Gary Smith v Pimlico Plumbers Ltd has not changed the law, but is a further, important reminder of the legal and factual Employment Law minefield facing both employers and employees alike.

Employment Law currently recognises three main employment relationships, namely:

1. Employee;
   
2. Worker;
   
3. Self Employed Contractor.

What the “Pimlico Plumbing” case reminds us is that regardless of the terms of any written contract (or indeed the assumptions of the parties entering into a working relationship) the Courts will undertake a full analysis of the relationship in order to determine the true legal status of the employee or worker.

In Mr Smith’s case (the plumber) he had signed a contract in 2009 which stated that he was an independent contractor and “in business on his own account”, in other words that he was a self employed individual. Mr Smith worked with Pimlico Plumbing for over 5 years before suffering a heart attack; he subsequently attempted to negotiate a reduction in his working week from 5 to 3 days. Pimlico Plumbing refused and Mr Smith issued Employment Tribunal proceedings.

It was eventually accepted by Mr Smith that he was not a full “Employee”, but the Tribunal (and subsequently the Court of Appeal) was asked to rule on the question of whether he was a “Worker” and therefore entitled to certain basic employment rights, such as entitlement to paid leave, protection from unlawful deductions from wages and protection from discrimination.

The three main issues determining Worker status are:

1. There must be a contract (whether oral or in writing);
   
2. There must be a requirement for “personal service” by the Worker (that they must perform the work themselves);
   
3. The extent of control exercised by the employer over the Worker; the greater the control, the more likely it is that Worker status will be established.

Despite:

1. Mr Smith agreeing in evidence that he had considered himself an independent contractor;
   
2. That he accepted he could reject work offered by Pimlico Plumbing;
   
3. The existence of a written contract expressly describing Mr Smith as an independent contractor,

The Courts nevertheless ruled that on the facts of this particular case Mr Smith’s proper status was that of “Worker” with all the rights and protections this afforded.

Along with the Uber and other cases this decision again highlights the challenges facing employment law in a rapidly changing world. You can read a previous article on the Uber Employment Law Court ruling here.

Get Employment Law advice

If you are an employer that has contracts with self-employed individuals and/or “Workers”, it would be wise to seek up to date Employment Law advice on whether the contracts you have in place are a true reflection of the legal relationship you have with the individual/s and therefore actually offers you the protection from claims that you think these contracts do.