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
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
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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The seminar will take place on 31 March 2017. It aims to provide German companies with an overview of the latest developments in relation to insurance coverage, banking transactions and legal aspects of doing business with Iran.
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In SSE Generation Limited v Hochtief Solutions AG and another decided on 21st December 2016, the Court of Session in Scotland considered a contractor's potential design liability under the NEC Form of Contract.
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