In Pimlico Plumbers & Charlie Mullins v Gary Smith, the Court of Appeal has upheld the EAT’s decision that a plumber engaged by Pimlico Plumbers on a self-employed contract was, in fact, a worker.
In a detailed judgment running to 33 pages, the Court considered the contractual documentation that Mr Smith worked under at Pimlico, and the reality of the working situation. Mr Smith was VAT-registered, and paying tax on a self-employed basis, but worked solely for Pimlico Plumbers for six years. The agreement between the company and Mr Smith described him as a ‘self-employed operative’. There was no express term in the agreement allowing Mr Smith to send someone else to do the work. However, there was evidence that plumbers could swap jobs, described by the Court as ‘more akin to swapping a shift between workers’ than substitution.
The Court found that Mr Smith undertook to do his work personally and this was a key factor in concluding that he was a worker.
Employment status and the ‘gig economy’ are hot-topics in the media at the moment. Alongside the recent decisions involving taxi provider Uber and courier service CitySprint, this decision is a further warning to employers that tribunals and courts will look at the true nature of a working relationship rather than the label attached to it.
As a worker rather than self-employed, Mr Smith was entitled to a number of additional protections and benefits including the right to receive the National Minimum Wage. Of particular concern to Pimlico will be the significant costs involved in having to provide holiday pay to the plumbers who will now be considered workers.
As this is a Court of Appeal decision it is likely to be a leading case on employment status in the future.
Any organisation which uses self-employed contractors to carry out regular work should carefully review their working practices and contractual documentation to ensure that the employment status given to those individuals reflects the reality of the situation.