In the recent case of Pimlico Plumbers v Smith, the Court of Appeal upheld the Employment Appeal Tribunal’s decision that one of Pimlico Plumbers’ operatives was a worker rather than a self-employed contractor.
Mr Smith began working as a plumber for Pimlico Plumbers in May 2005 on what was described and documented as a self-employed contractor basis. In January 2011 he suffered a heart attack and subsequently requested a reduction in his working hours. This request was refused and Pimlico later terminated its arrangement with him. Mr Smith brought various claims against Pimlico including unfair dismissal, disability discrimination, holiday pay and unauthorised deductions from wages.
The employment tribunal decided he did not have employment status and so his claim for unfair dismissal failed, but it decided he did have worker status and so could pursue the claims of disability discrimination, holiday pay and unauthorised deduction from wages. The employment appeal tribunal agreed and the matter was appealed to the Court of Appeal.
The Court of Appeal considered various factors. Although there were a number of features to point towards Mr Smith being a self-employed contractor (not a worker), such as the terms in his written agreement, his personal tax and national insurance arrangements and the need for him to provide his own tools, there were other factors which suggested that he was not actually in business on his own account:
- apart from informal ‘job swaps’ between other Pimlico plumbers he had to provide personal service as his contract did not allow him to provide a substitute to do his work;
- he was obliged to work a minimum number of hours per week, rather than hours being “casual”; and
- his contract contained covenants restricting his business activities after termination.
These factors led the court to decide that Pimlico exercised a high level of control over Mr Smith which was inconsistent with self-employment and they agreed that he had worker status.
Whilst a highly fact sensitive case, this follows the recent decisions in the Uber and CitySprint cases which have been decided in favour of workers’ rights. Employers should expect further cases testing employment status in this highly fluid area of employment law, particularly in light of the forthcoming Matthew Taylor report on modern employment practices.