Pimlico Plumbers engaged Mr Smith as a plumber for around five and a half years. Four months after he suffered a heart attack, Pimlico brought the engagement to an end. Mr Smith issued proceedings in the employment tribunal for unfair dismissal, wrongful dismissal, entitlement to pay during medical suspension, holiday pay, unlawful deductions from wages and disability discrimination. The tribunal listed the case for a preliminary hearing to decide whether Mr Smith was an employee and/or a worker. Mr Smith would require this status to continue the various claims.
In terms of contractual documentation between the parties, there was an agreement and a company manual. These provided that Mr Smith was an independent contractor and was under no obligation to accept work from Pimlico, and Pimlico was not obliged to offer him any work. Mr Smith was subject to restrictive covenants, had to drive a Pimlico branded van and had to wear a Pimlico uniform. Further, he had to provide his own materials and tools. He also bore a significant proportion of the commercial risk – if a customer didn't pay, Mr Smith would not be paid. Mr Smith was registered for VAT and submitted invoices to Pimlico and filed tax returns as a self-employed contractor. While there was no express right of substitution in the contractual documentation, Mr Smith could swap assignments with his colleagues.
At the preliminary hearing, the tribunal held that Mr Smith did not have employment status but did have worker status. Both parties applied to the Employment Appeal Tribunal (EAT). The EAT rejected both appeals. Only Pimlico raised a further appeal to the Court of Appeal to dispute that Mr Smith was a worker.
The Court of Appeal dismissed the appeal and found Mr Smith was a worker. The judges provided a useful analysis of the situation. They considered the issue of personal service. They found the ability to swap assignments represented only an informal concession to the requirement to provide personal service. A limited ability to provide a substitute is not usually inconsistent with an alleged requirement to provide personal service. They then looked at whether Pimlico was a client or customer of Mr Smith. The court held the tribunal had been entitled to find that the degree of control exercised by Pimlico (alongside a minimum hours preference) was inconsistent with Pimlico being a client or customer of a business run by Mr Smith. The fact that the contractual documentation contained restrictive covenants also pointed to this finding.
The case follows hot on the heels of the Uber and CitySprint cases, and will no doubt add to the Taylor review into modern working practices. While the Pimlico case is again a fact-sensitive case, the judgment helps in giving a further practical application of the worker status statutory definition. The case will now return to the employment tribunal to decide Mr Smith's claims that hinged on his status of worker, i.e. disability discrimination, failure to pay holiday pay, and unlawful deductions from wages. Should Pimlico appeal the decision to the Supreme Court, we will update you on our blog.
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