A plumber who carried out jobs on behalf of a plumbing company should be classed as a “worker” under the Employment Rights Act, not a self-employed contractor.
That was the decision of the Court of Appeal in a high profile case involving Pimlico Plumbers and one of its operatives, Gary Smith.
Mr Smith carried out plumbing work for the company between August 2005 and April 2011. He complained that, following a heart attack, he was unfairly or wrongfully dismissed and claimed entitlement to pay during medical suspension, holiday pay and pay arrears.
The company said that the original contractual agreement between them, signed in 2005, described Mr Smith as a “sub-contracted employee”. He was an independent contractor, he was VAT registered and filed his accounts as a self-employed person.
The court also heard that every operative was issued with a company identity card, which had to be carried when working. They also had to wear a uniform marked with the company’s logo and were issued with a mobile phone.
Mr Smith worked only for Pimlico Plumbers. He could reject particular jobs, decide his own hours and work unsupervised, exercising his own discretion as to the work needed for a particular customer and whether to negotiate on price.
The contract provided for normal working hours consisting of five days a week in which he was required to complete a minimum of 40 hours. However, the company had no obligation to provide him with work on any particular day, and if there was no work for him he was not paid.
Mr Smith only worked on average about 20 hours each week in the last weeks of his relationship with the company. The Employment Appeal Tribunal found that Mr Smith was a worker within the meaning of the Employment Rights Act 1996 and entitled to the benefits that brought.
The Court of Appeal has upheld that decision. It held that evidence before the tribunal was clear and consistent that the relationship between Pimlico Plumbers and its operatives would only work if the operative was given and undertook a minimum number of hours’ work.
Mr Smith like the other operatives, was required to use the van with the company logo on it for work assignments and was issued with a company mobile phone. He had to earn enough from work assignments to be able to pay the van and telephone expenses, and provide an income. His case was that it would have to be a minimum of 36 hours a week.
The case has attracted a lot of public attention because of the rise of the so called gig economy in which operatives are paid on a task by task basis rather than receive a regular weekly wage. However, the court warned against reading too much into this one decision.
Lord Justice Underhill said: “Although employment lawyers will inevitably be interested in this case – the question of when a relationship is genuinely casual being a very live one at present – they should be careful about trying to draw any very general conclusions from it.”
The government is currently carrying out a review of workers’ rights following similar high profile cases involving companies like Uber and City Sprint.
A spokesman for the Department for Business, Energy and Industrial Strategy said: “We are determined to make sure our employment rules keep up to date to reflect new ways of working, and that is why the government asked Matthew Taylor to conduct an independent review into modern working practices.”
We shall keep clients informed of developments.
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