The Supreme Court has held in Pimlico Plumbers v Smith that despite the fact that the claimant was described as "self-employed", he had worker status entitling him to bring claims for discrimination, holiday pay and unauthorised deductions from wages. The decision reinforces the difficulties that determining employment status can pose, and shows that an employer will not be able to avoid conferring worker status on an individual just because they have been labelled as an independent contractor.
Mr Smith's contract with Pimlico Plumbers (PP) stated that he was an independent contractor in business on his own account. He was subject to restrictive covenants and had to drive a PP branded van and wear a PP uniform. In addition to providing his own materials and tools he bore a significant proportion of the commercial risk. If a customer failed to make a payment he was not paid, and he was responsible for sorting out his own liability insurance.The Court noted that in order to qualify as a worker Mr Smith needed to have undertaken to personally perform his work or services for PP. Despite a finding that Mr Smith had some ability to substitute another operative in his place, the dominant feature of Mr Smith's contract was still an obligation of personal service. As a result he could not be said to be genuinely self-employed.
Employment Partner Rebecca McGuirk at Trowers & Hamlins LLP said:
"This decision is not unexpected. It echoes other recent decisions which have found against Uber, CitySprint and Addison Lee among others, and proves that organisations operating within the gig economy have a problem on their hands that is clearly not going away.
Following the Taylor Review of Modern Working Practices, the government accepted that there needs to be greater clarity and certainty surrounding employment status. It launched a consultation earlier this year asking whether the existing employment status tests are still relevant to the modern workplace and how greater certainty can be achieved. It will be interesting to see whether this will result in changes to the law on employment status, although any changes are unlikely to happen any time soon."
