The Supreme Court’s Judgment in Pimlico Plumbers and another v Gary Smith could spell an end to gig-economy ‘jobs loophole’ being used to avoid worker status. The Supreme Court’s dismissal of Pimlico’s recent appeal has confirmed that their workers are in fact just that: not the self-employed contractors that their contracts with Pimlico sought to label them as. This could have significant ramifications for several other high profile cases on the same subject.
Facts of the Pimlico case
Mr Smith had worked exclusively for Pimlico on a self-employed basis. After suffering a heart attack he sought to reduce his hours from 5 to 3 days per week; a request that was denied by Pimlico, ultimately resulting in his dismissal. Mr Smith made several claims to the Employment Tribunal for unfair and wrongful dismissal, entitlement to pay and discrimination. He has been successful at every stage of his claim including in the Employment Appeal Tribunal and Court of Appeal, having been found to be a worker under s230(3)(b) of the Employment Rights Act 1996 and being “in employment” for the purposes of the Equality Act 2010.
The significant factors for the Supreme Court in drawing the distinction between self-employed and worker status lay ultimately in the strict requirements that Pimlico placed upon its workers. All of these factors would indicate that Mr Smith worked for Pimlico, not that he was a supplier to them.
So what does this mean for Mr Smith? As a worker he is entitled to several rights not afforded to him as a self-employed contractor such as: statutory sick pay, protection for whistleblowing, protection from discrimination and statutory paid holiday – rights many people assume come as standard when working for a company.
The decision hinged on Mr Smith’s inability under his contract to reject work, his inability to make decisions on working hours. Ultimately the Supreme Court found Pimlico’s arguments that Mr Smith paid pay his own tax and used his own tools to complete work unconvincing as justification that he was genuinely self-employed. Whilst Mr Smith was required to provide his own tools, the job had to be carried out whilst wearing a branded uniform and driving a branded van, fitted with GPS. Workers are generally required to provide a personal service but Pimlico allowed its plumbers to swap jobs. Pimlico insisted this proved Mr Smith was self-employed, however the ability to swap shifts was only within the pool of plumbers working for Pimlico at any given time. Mr Smith’s ability to reject work and negotiate hours was hampered by a secondary contract requesting he work a minimum of 40 hours per week. Ultimately the control exercised by Pimlico overwhelmed the credibility of its contract which did not reflect the reality of the situation, a common theme in all of these related worker cases.
Consequences for the gig- economy
With the surge in gig-economy related opportunities of late, exploiting technological advancements the law is playing catch up and high profile cases on workers’ rights such as Uber, Addison Lee and CitySprint are starting to close in on this fast growing market. A Supreme Court decision sets a strong precedent in advance of Uber’s upcoming appeal. The gig economy won’t be stopped in its tracks by this decision but the brakes are certainly being applied.