The distinction between workers and the self-employed.

Post by: Chris Randall 02/07/2018 0 comments 205 views

The Case

The Claimant, Mr Gary Smith, was a plumbing and heating engineer. From August 2005 to April 2011 he worked for Pimlico Plumbers Ltd  a well known plumbing business in London which is owned by Mr Charlie Mullins. Gary Smith had worked for the company under two written agreements (the second of which replaced the first in 2009). These agreements were drafted in confusing terms.

In August 2011 Gary Smith issued a number of claims against Pimlico Plumbers before the employment tribunal. The employment tribunal decided that he had not been an employee under a contract of employment, and therefore he was not entitled to complain of unfair dismissal, but that he was a ‘worker’ within the meaning of the Employment Rights Act 1996, (2) was a ‘worker’ within the meaning of the Working Time Regulations 1998, and (3) had been in ‘employment’ for the purposes of the Equality Act 2010. The decision meant that Gary Smith could legitimately proceed with his claims of disability discrimination, unlawful deductions from wages and holiday pay.  Pimlico Plumbers appealed this decision to the Employment Appeal Tribunal and then to the Court of Appeal, but were unsuccessful. Pimlico Plumbers unsuccessfully appealed this decision to the Supreme Court [2018] UKSC 29.

The decision

Gary Smith filed tax returns on the basis that he was self-employed, was VAT registered, was entitled to reject work and was able to take outside work, it was held that he was a ‘worker’. Significant factors in its decision included:

  • The contract made reference to ‘wages’, ‘gross misconduct’ and ‘dismissal’, and included a list of restrictive covenants concerning his working activities after termination.
  • Gary Smith was required to wear a company branded uniform and to use a company branded van.
  • While Gary Smith was able to substitute his work to other plumbers already engaged by the company, this was similar to swapping shifts between workers rather than providing a third party to substitute work to.
  • Gary Smith had to carry a company identity card and follow the administrative instructions of its control room.

What happens next?

This is one in a long line of recent cases concerning the gig economy.  Pimlico Plumbers have reached the end of the road of the appeal process and Gary Smith’s claims for wages, holiday pay and disability discrimination will be finally listed to be heard by an employment tribunal.

The Business, Energy and Industrial Strategy Committee published a draft gig economy Bill last November but it has not yet confirmed  how it will implement the recommendations made in Matthew Taylor’s Review of Modern Working Practices.

Advice

If you would like advice regarding contractual status, please contact the Employment Team at Ringrose Law. You can reach us by contacting 01522 561020

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