Employment Law Speed Read – 18/06/18

Pimlico Plumbers Ltd and another v Mr Gary Smith

In Pimlico Plumbers Ltd and another v Mr Gary Smith, the Supreme Court held that Mr Smith was a worker and not a self-employed contractor.

Background 

Mr Smith was a plumber who carried out work for Pimlico Plumbers Ltd (“Pimlico”) between August 2005 and April 2011.

In August 2011, Mr Smith issued Employment Tribunal proceedings against Pimlico. His claims included unfair dismissal and claims for unlawful deduction of wages and holiday pay.

Pimlico argued that Mr Smith was a self-employed contractor. Although the ET found that Mr Smith was not an employee (and could therefore not bring an unfair dismissal claim). They found that he was not self-employed and instead had the status of worker. Therefore, his claims for unlawful deduction of wages and holiday pay could proceed.

Pimlico unsuccessfully appealed this decision to the Employment Appeal Tribunal and the Court of Appeal, with both courts upholding that Mr Smith was a worker. Pimlico subsequently appealed to the Supreme Court.

Supreme Court 

In order to determine whether Mr Smith was a “worker” the Supreme Court dealt with two issues:

• whether Mr Smith was under an obligation to personally perform the work or services for Pimlico; and
• whether Pimlico should be regarded as a client or customer of Mr Smith.

Pimlico argued that Mr Smith had no personal obligation to perform the work as he had the right to substitute his work to others. The Court dismissed this argument, noting that Mr Smith only had a very limited right to substitute work, as the substitute had to be another Pimlico operative. Consequently, the Supreme Court held that the Tribunal was correct in finding that Mr Smith was under an obligation to personally perform the work for Pimlico.

When determining whether Pimlico was just a client or customer of Mr Smith, the Court placed emphasis on the amount of control that Pimlico had in the working relationship.

The Supreme Court noted that Pimlico’s “tight control over him was reflected in its requirements that he should wear the branded Pimlico uniform; drive its branded van, to which Pimlico applied a tracker; carry its identity card; and closely follow the administration of its control room”.

Consequently, the Supreme Court found that these factors demonstrated that Pimlico was not a client or customer of Mr Smith.

Therefore, the Supreme Court held that the Tribunal was entitled to find that Mr Smith was a worker and not a self-employed contractor carrying out work for Pimlico.

Comment 

Although this case does not decide anything new, it is a warning to businesses that heavily rely on self-employed contractors to perform their work.

The publicity surrounding this case, and the further challenges being brought against ‘gig-economy’ businesses like Uber and Deliveroo, could mean that challenges from those categorised as self-employed will become more frequent.

Businesses should be aware, that if they do not provide self-employed contractors with the ability to appoint a substitute and assert a high level of control over these contractors, they could be classed as “workers”.

If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.