Pimlico Plumbers have today lost their Supreme Court challenge to an Employment Tribunal’s decision that Gary Smith was a worker. Mr Smith ‘worked’ for Pimlico, and was VAT registered and paid tax as a self-employed contractor.
Pimlico terminated their agreement with Mr Smith in May 2011 (yes, 2011!) and he raised claims in an employment tribunal for holiday pay, unlawful deductions from wages and disability discrimination, The Tribunal determined that Mr Smith was a worker under section 230 of the Employment Rights Act 1996 as he was required to provide ‘personal service’ to Pimlico, which they felt was a key element of the test for a worker.
The decision was upheld by the Employment Appeal Tribunal and Court of Appeal and notwithstanding this, Pimlico decided to appeal to the Supreme Court.
The Supreme Court has dismissed Pimlico’s appeal and found that the Employment Tribunal was entitled to hold that Mr Smith was a worker. They held that in particular the Tribunal was correct to have regard to the factors that indicated Pimlico were not a ‘client’ or a ‘customer’ of Mr Smith, namely:
- he was required to wear a Pimlico branded uniform, drive a Pimlico branded van, carry an identity card stating that he was associated with Pimlico and closely follow instructions given out by the control room;
- the strict terms as to when and how much Pimlico had to pay him;
- contractual references to ‘dismissal’, ‘gross misconduct’ and ‘wages’;
- the lengthy and detailed restrictive covenants regarding what work Mr Smith could, and more importantly could not do following his termination.
The Supreme Court’s finding means that Mr Smith is also deemed to be a worker for the purposes of his claims raised under the Working Time Regulations 1998 and Equality Act 2010.
The matter will now be remitted (no, it is not over yet!) to an Employment Tribunal to determine if Mr Smith’s claims will succeed.
Pimlico Chief Executive Charlie Mullins was highly critical of the ruling, suggesting that a “tsunami of claims” could follow, potentially affecting thousands of companies.
The union’s, perhaps unsurprisingly, have lauded the decision with the TUC’ Frances O’Grady noting that the judgment should “end the Wild West in the gig economy” exposing the “sham self-employment” utilised by many employers.
If you are an employer, a self-employed contractor or an employee who has a concern over their employment status , the Jackson Boyd employment team have extensive experience of dealing with these issues, so please get in touch by clicking here or speak to a member of our specialist team on 0333 122 6238.