June 13, 2018
The Claimant, Gary Smith, in the widely-reported case of Pimlico Plumbers v Smith ( UKSC 29)was engaged by Pimlico as a heating engineer for six years between 2005 and 2011. During this period he worked a 40-hour week, wore Pimlico’s branded uniform and drove its vans, was subject to the company’s rules and policies, and had all of his work booked in by the company. However, the contract under which he was working classed him as an independent contractor, with the company described as his client rather than his employer. He was therefore not paid holiday pay or statutory sick pay.
In 2011, after suffering a heart attack and asking to be moved down to a 3-day week, Mr Smith was told that his contract was to be terminated. He subsequently brought a number of claims in the Employment Tribunal. The bitterly-fought case has subsequently made its way through the Tribunals and appeals courts over the last seven years, and was finally heard in the Supreme Court in February this year.
The Supreme Court has now released a judgment which found that Mr Smith was personally obliged to turn up to work for Pimlico for up to 40 hours per week. He did not have the right to send a substitute in his place (other than occasionally being allowed to swap shifts with other Pimlico engineers). It was therefore not correct to class him as self-employed. In addition, the Court confirmed that it was also not appropriate to describe Pimlico as Mr Smith’s client – it was his employer, and he was therefore entitled to a number of important employment rights.
Although it does not set down any new legal test, the case is important for employers who operate in the gig economy because it confirms the courts’ recent willingness to closely scrutinise businesses’ agreements with self-employed contractors or consultants. The Tribunals are now much more likely to look past written contracts and look at the day-to-day reality of individuals’ working conditions. We have recently seen the same happen in cases against Uber, and similar claims have been lodged against Amazon and CitySprint, which is facing a group claim for £200,000 worth of holiday pay.
The Government is also currently running a number of consultations in relation to the gig economy under the Taylor Review – a 2017 report which found that workers’ rights were not adequate in this area, and that employers and workers both need more certainty on the definitions of self-employment and worker status. We are therefore likely to see further developments in the next few months.
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