The highest court in the UK has handed down a significant decision on the ever-present question of worker status. The Supreme Court yesterday upheld the Court of Appeal’s decision that Mr Smith – a plumber who worked for Pimlico Plumbers – was not, as the company claimed, a self-employed contractor but a worker entitled to certain employment law rights. The distinction between the different types of status has been the subject of many recent cases involving businesses including Uber and Deliveroo, and it’s likely that Mr Smith’s victory on this point will boost the confidence of other individuals arguing for greater protections and entitlements at work.
Mr Smith carried out work for Pimlico Plumbers for six years. His contract said that he was a self-employed operative, in business on his own account. He was VAT registered and took care of his own accounts as a self-employed person. Other relevant status-related aspects included:- Pimlico didn’t have to provide him with work, and he was only paid for work that he did.- He could choose to accept or reject certain jobs.- He could negotiate with customers on price.- He determined his working hours.- His work was unsupervised.- He provided his own tools.- He could swap jobs with other plumbers. (All of which might have suggested self-employed status.) But some other factors pointed towards worker status. These included:- He worked only for Pimlico.- He was required to work at least 40 hours per week.- He wore a Pimlico Plumbers uniform.- He drove a branded Pimlico Plumbers van, complete with a GPS tracker.
Why status is important
Mr Smith had brought various claims against Pimlico, and his entitlement to pursue those depended on whether he was classed in law as an employee, a worker, or self-employed. Employees enjoy the greatest protections including, for example, unfair dismissal rights, the right to statutory redundancy pay, and rights on the transfer of their employer’s business under TUPE. Workers (and employees) benefit from, among other things, holiday pay, the National Minimum Wage, and whistleblowing protection. The position for self-employed contractors is markedly different; they have no statutory employment law rights.
The Court of Appeal
The employment tribunal and Employment Appeal Tribunal had decided that Mr Smith was a worker, entitled to employment law protections that flowed from that. The Court of Appeal rejected Pimlico’s appeal, and upheld the decision of the earlier courts. Some important aspects of the Court of Appeal’s decision that went on to be examined by the Supreme Court were the conclusions that, consistent with worker status as opposed to self-employed status: – Mr Smith had had to provide personal service. Although in practice he swapped jobs with other plumbers, there wasn’t an express right to do so. It was more like swapping shifts than substituting services. – Pimlico exercised a level of control over him that was, again, inconsistent with self-employed status. He was integrated into the company. He wasn’t running his own business with Pimlico as the client or customer. Mr Smith was subordinate to Pimlico in a way that a self-employed contractor would not be.
The Supreme Court
The Supreme Court upheld the decision reached by the Court of Appeal. Mr Smith was a worker. The requirement to provide personal service, and the type and level of control exercised over him by Pimlico, proved decisive.
What this means for employers
The case doesn’t change the legal position on worker status, or add any new law. But it highlights that when it comes to categorising individuals as employees, workers or self-employed contractors, the particular facts of each situation are all-important. One of the big lessons to take away is that the wording of a contract won’t be determinative. It’s the reality of the situation that counts. In this case, various courts carefully considered the fine details of Mr Smith’s role. And, while some factors pointed towards self-employed status, they were outweighed by those pointing towards worker status. If yours is a business that engages contractors and other casual workers (employers in the ‘gig economy’ are especially at risk), this decision should prompt you to review your relationships with them. The reality is that some people who work for you could well be entitled to a better deal and greater protections than they are currently getting. If you have any queries about the issue of employment status, contact Meredith Hurst on 020 7426 4903, or by emailing email@example.com.