A recent ruling in the Supreme Court has held that a self-employed plumber was, in fact, a worker in a landmark case Pimlico Plumbers Ltd and another v Smith [2018] UKSC 29.
The History of the Case
Mr Smith was a self-employed plumber and heating engineer and worked for Pimlico Plumbers Ltd (‘Pimlico’) between 2005 and 2011. In April 2011, Mr Smith was dismissed by Pimlico following health issues and in August 2011, Mr Smith issued proceedings against the company.
The claims brought by Mr Smith’s claim were that;
1. he had been an ‘employee’ of Pimlico and that he had been dismissed unfairly;
2. he had been a ‘worker’ for Pimlico, and that Pimlico had made an unlawful deduction from his wages in not paying sick pay;
3. he had been a ‘worker’ for Pimlico, and that Pimlico had failed to pay him holiday pay; and
4. that having been in the employment of Pimlico within the meaning of section 83(2)(a) of the Equality Act 2010, Pimlico had discriminated against him by reference to his disability and that they had failed to make reasonable adjustments.
It was held by the Employment Tribunal on the 16th April 2012 that Mr Smith was not an employee of Pimlico and whilst this decision was appealed by Mr Smith, it was dismissed by the Employment Appeal Tribunal on the 21st November 2014, accordingly Mr Smith could not have been unfairly dismissed and the first limb of his claim could not be pursued.
It was, however, held on the 16th of April 2012 that Mr Smith had been a worker for Pimlico and that he had been in Pimlico’s employment within the meaning of the Equality Act 2010. These decisions were appealed by Pimlico however, each was dismissed by the Employment Appeal Tribunal on the 21st November 2014. This meant that the employment tribunal could then proceed to examine the second, third and fourth elements of the claim brought by Mr Smith.
On the 13th of June 2018, the Supreme Court heard Pimlico’s further appeal, which challenged the decision by the Employment Appeal Tribunal. It was held that the Employment Tribunal was correct in holding that Mr Smith was a worker, and the appeal was dismissed.
Supreme Court Decision
In explaining the Supreme Court’s decision, Lord Wilson stated inter alia that:
If someone engages the services of another under a contact of employment then there are legal rights against that person which are implied through various legislation beyond that which is stated within the contract. Alternatively, where someone provides a service as a one-off piece of work, then these same legal rights are not implied beyond that which is provided for within the contract.
There is, however, a middle category of working people, being ‘Workers’. The definition of a worker is defined in section 230(3) of the Employment Rights Act 1996 as being someone who has entered into or works under;
“any other contract … whereby the individual undertakes to … perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual …”
In order for someone to be a ‘worker’, there is a requirement that they undertake the work personally and that they cannot send someone else to carry out the work in their place. The Supreme Court held that whilst Mr Smith’s contract did, on the face of it, allow for Mr Smith to send someone in his place, there were qualifications to this in that the substitute would, too, need to be under contract with Pimlico. Furthermore, Lord Wilson stated that ‘the dominant feature of Mr Smith’s contract was that he should do the work himself’. Accordingly, it was held that Mr Smith undertook to perform the work personally.
The second point which was addressed by Lord Wilson is giving the judgement was whether Pimlico was a client or customer of Mr Smith. The court considered whether Mr Smith was marketing his services independent of the company or whether, alternatively, he was an integral part of its operation and was subordinate to Pimlico. Whilst the Supreme Court recognised that there was evidence of financial and operational independence for Mr Smith, it noted that the services of Mr Smith were marketed through Pimlico, and there were provisions for administrative control over Mr Smith within his contract with Pimlico. Accordingly, the Supreme Court held that Pimlico could not have been regarded as being a client or customer of Mr Smith.
The tribunal may now continue to hear Mr Smith’s case as him being a ‘worker’.
The boundaries between employees, workers and those who are self-employed have attracted much debate in recent years, bringing with it the branding of a ‘gig economy’. This case highlights the issues with those blurred boundaries but will possibly see workers similar to Mr Smith being afforded extra security and benefits.
Should you require any advice on any Employment Law matter, then please contact us at 01457 761 320 or email Suzzanne Gardener at suzzanne@odonnellsolicitors.co.uk
