Pimlico Plumbers have unsuccessfully appealed to the Supreme Court to overturn the decision that Mr Smith, a plumber, had worker status (rather than being self-employed).
Mr Smith had been working with Pimlico Plumbers for around 6 years. He suffered a heart attack in January 2011, and asked Pimlico whether he could reduce his hours to work 3 days instead of 5 days a week. Pimlico in response refused his request, took away his van and dismissed him. He took Pimlico to the Employment Tribunal (ET), claiming he was (1) unfairly dismissed, (2) discriminated against on the grounds of his disability; and (3) that he was entitled to holiday pay (among other claims).
One of the key issues the ET had to consider was whether Mr Smith was an employee or a worker. The truly self-employed can’t bring discrimination claims.
Mr Smith’s contractual documentation stated that:
- He was an ‘independent contractor’;
- He was not obliged to accept work;
- He should complete a minimum of 40 hours a week;
- He must provide his own materials and tools; and
- He must drive a branded van, wear a uniform and carry an ID card.
In addition, Mr Smith was VAT registered, submitted invoices to Pimlico and filed his own tax returns.
The courts have constructed a number of tests to help them decided whether or not someone is an employee. There are 4 elements:
– An individual must have a contract (express or implied)
-An individual must carry out the work personally
-There has to be a ‘mutuality of obligation’ between the two parties
-The employer must have control over the work that the individual does.
The ET decided that Mr Smith wasn’t an employee, but he did have worker status (a kind of intermediate category between employee and self-employed).
Pimlico appealed to the Employment Appeal Tribunal, and the Court of Appeal, however both appeals were unsuccessful. Pimlico then appealed to the Supreme Court.
The Supreme Court rejected Pimlico’s appeal because of its findings:
- There was personal service – Mr Smith’s contract clearly required him to perform the services personally to Pimlico; and
- Pimlico was not a client or customer of Mr Smith – Pimlico had an obligation to offer Mr Smith work when it was available, and he was contractually obliged to keep himself available to work up to 40 hours on five days each week for Pimlico’s assignments.
- Mr Smith’s contract stated that he could not accept work from customers or potential customers without their approval first – he was not in control.
This means that Mr Smith is entitled to holiday pay, to pursue his claim for disability discrimination in relation to his heart attack and areas of pay.
This area of employment status has been in legal flux for a long time, and this case doesn’t provide any further clarity. However it provides the latest warning to employers to fully evaluate the relationship between them and their staff when deciding whether staff are employees, self-employed or workers.
By Aneesha Ali-Khan
Image used under CC courtesy of Eli Duke