UK: The End Of The Road For Pimlico Plumbers?

Last Updated: 15 July 2018
Article by Alison Downie

The short answer is not quite.

The Supreme Court has now given judgment in the long running and important case by plumber Gary Smith against Pimlico Plumbers in which he claimed he was a worker and not a self-employed contractor and so was entitled to certain rights and payments from Pimlico.

Last year the Court of Appeal upheld Gary Smith's claims as a worker but Pimlico decided to challenge that decision by appeal to the Supreme Court on the basis that the Court of Appeal got the facts wrong.

It had taken over six years for this case to reach the highest Court in the UK.

During that time and particularly in the last two years, drivers for Uber; couriers for CitySprint and riders for Deliveroo, amongst many others, have also commenced legal actions asserting their rights as workers and not self-employed contractors, on the same principles as Gary Smith.

These cases have generated widespread publicity and successes for these individuals seeking to establish that regardless of what any written contract might say about them being self-employed, and having precarious work arrangements, they are in fact a worker. A feature of these cases is that the employers appear to be fighting the Court decisions all the way, up to the highest Court, because the impact of the decisions so far in supporting the workers' claims are far reaching and potentially costly for those employers.

To recap, the cases concern an individual's employment status which dictates  specific legal statutory working rights and entitlements for that individual.  As a reminder, there are three main categories of employment status.

  1. Employee – where a contract of employment exists. An employee has the full range of employment rights including protection from unfair dismissal, right to a redundancy payment, holiday leave and pay and sick pay, and is also a worker for any rights so defined.
  2. Worker – where a contract for servers to do work personally exists (or an employment contact as above exists). A worker has a more limited range of working rights then an employee,  including to holiday leave and pay, the national minimum wage, possibly sick pay and no unlawful deductions from wages.
  3. Self-employed contractor – where neither of the above types of contract exist. This attracts a very limited range of working rights, e.g. health and safety, working time and (with qualifications) discrimination protection.

The presumption that because someone pays self-employed tax means that they cannot be a "worker" is wrong.

Facts

Mr Smith had worked for Pimlico Plumbers under an apparent self-employed written contract ,and the Pimlico Manual terms and conditions, for many years.   Under those terms he was required to work a minimum 40 hours per week, limited his right to work for other companies or himself, could only use other Pimlico operatives to do his work if he could not do it, and to use a Pimlico van.

He paid tax on a self-employed basis and VAT.

He had a heart attack, had been away ill and asked to work fewer hours which was refused. Pimlico terminated his contract.  He then claimed unfair dismissal, wrongful dismissal, asserting he was an employee, and also claimed holiday pay and unlawful deductions from wages as a worker under a contract for services.  Although it seems contradictory to claim as an employee and as a worker, all employees are workers in any event and alternative claims can be made in this way.

Finally, he made claims for disability discrimination under The Equality Act under extended definition of an employee, for which he had to show that he was employed under a contract personally to do work.

Decisions

The original Tribunal Judge found that he was not an employee so was not entitled to protection from unfair dismissal.

The Judge also decided that on the wording of the contract and the manual there was a requirement for personal service from Mr Smith. There was no express contract term giving him absolute freedom to substitute another person to do the work for him and no evidence that in reality he could do so either.  He had some autonomy in carrying out the work but Pimlico exercised tight control over him, including on the 40 hours per week minimum.

The Judge decided he was therefore a worker and entitled to holiday leave and pay. He also qualified for discrimination protection as he had a contract to do work personally.

Pimlico appealed to the Court of Appeal. The Judges in that Court last year pored over all the detail again, including the contract terms and work arrangements. They then agreed with the original Tribunal Judge on all points.  Mr Smith was a worker.  Basically the test was of integration into and control by the business.

The Supreme Court decision

Pimlico Plumbers appealed against that Court of Appeal decision too, to the Supreme Court last year, with the main challenge being that the Court of Appeal was mistaken about the facts.

The main challenges were that Mr Smith was not required to provide personal service or that Pimlico was a client of customer of his which would mean he was not a worker.

The Supreme Court examined the evidence and previous judgements and dismissed the appeal on both grounds. It upheld the original Tribunal Judges findings as being reasonable. Mr Smith's claims against Pimlico for holiday pay etc  as worker now go back to the Employment Tribunal to be decided.

Charlie Mullins of Pimlico Plumbers however doesn't seem willing to accept this latest judgement and is reported to have said that he will take their case to the European Court of Justice, an interesting proposition in the context of Brexit proposals.

Government action to simplify?

It would be highly preferable for individuals to know their correct employment status from day one. Whilst the Courts are performing an effective function thus far in developing the law and confirming worker rights, it's clearly unfair that more and more workers must take costly and complex legal cases to enforce their rights.

Last year the Government commissioned Matthew Taylor to review modern working practices which included looking at employment status issues. Taylor's Good Work Review of Modern Working Practices recommended the government should set out the tests for worker status more clearly in law and that control should be more important than personal service. There should be  default worker status from day one for all those in companies which have a self employed workforce over a certain size. Finally "worker" should be re-labelled as dependent contractor.

The Government's response earlier this year was to announce they would take these recommendations forward, mainly by working on the case for legal change and carry out a consultation on the detailed tests to determine a worker ( or dependent contractor). It seems any implementation of such changes may take a very long time, if they take place at all.

The recent cases are frequently seen as a modern phenomena, the result of the rapidly increasing gig economy, the growth in part-time or independent working and a new category of "worker" having been identified and developed by the Courts over the last few years and as such it needs to be refined.

In fact, as the Supreme Court sets out in it's Judgment, over 125 years ago the category of "worker" was created in law and is nothing new at all.

In 1875 Parliament identified an intermediate category of working people, falling between those who worked as employees under contract of service and those who worked for others as independent contractors. Here is the "worker". That year Parliament passed the Employers and Workmen Act, providing a definition of a "workman" as a manual labourer working for an employer under a contract of service or a contract personally to execute any work or labour.

This category and the definition of it has further developed through legislation, particularly in the 1970's with the Equal Pay Act and then the Industrial Relations Act which defined the modern "worker", and  then into s 230 (3) of the Employment Rights Act 1996 definition of worker.

This is the basis on which the Courts are currently examining each case for worker status on its' facts and refining the tests used.

It appears that unless companies such as Pimlico, Uber and Deliveroo, who engage large numbers of individuals to work, cease their practices of imposing self employed status on individuals where it does not truly exist and is not wanted by the individual, then the Courts are likely to be fully engaged  on such cases as Mr Smiths for the foreseeable future.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions