The recent Court of Appeal case of Pimlico Plumbers Ltd and Mullins v Smith has been widely reported in the press over the past few weeks but has anything changed regarding employment status?

Not really, but the Court has provided useful guidance as to what to look for when assessing this type of work which will help to determine whether an individual should be properly regarded as a ‘worker’ rather than self-employed.   

Mr Smith  worked exclusively for Pimlico Plumbers (PP), having signed an agreement which referred to him as an “independent contractor” of the Company and in business on his own account. There was also a company manual which referred to a 40-hour working week, although the agreement itself stated that there was no obligation to provide or accept work. Mr Smith hired a branded van from the company and was registered as self-employed.  Mr Smith had been working for PP for over five years when he suffered a heart attack and requested to reduce his hours.  PP terminated the engagement.  Mr Smith brought claims for unfair dismissal, wrongful dismissal, entitlement to pay during medical suspension, holiday pay, unlawful deductions from wages and disability discrimination

This case looked at:

a)     Whether Mr Smith provided his services personally, and;

b)     Whether PP was a customer of a business operated by Mr Smith

Whilst the contract did point to personal service, it was accepted that in reality, the plumbers could swap jobs between themselves.  PP stated that this meant Mr Smith was not a worker as he was not required to personally provide the services.  The Court did not accept this as they could not find any example of an external plumber ever being used for any particular job.  The plumbers may have swapped jobs/shifts but this did not mean that they were not usually required to provide their services personally.

Turning to the second point – whether PP was a customer of Mr Smith, the Court looked at the requirement for Mr Smith to work 40 hours per week and it found that this was inconsistent with being self-employed.  Although it was stated that he did not have to accept work, in reality this was unlikely. This also meant that his status was more one of worker rather than self-employed as he was not working on his own account, rather he had to commit to a number of hours per week.  PP could therefore not be properly described as a customer of Mr Smith’s.

PP has stated that it is considering appealing to the Supreme Court.  Unless any appeal is successful, the case will return to the employment tribunal to consider whether Mr Smith suffered disability discrimination and whether PP failed to pay holiday pay and made unauthorised deductions from wages. Because Mr Smith failed to establish that he worked under a contract of employment, he is not eligible to pursue his other claims.

Whilst this case does not change the position when looking at employment status, it serves as a reminder that these issues are not going away.  In the so called ‘gig economy’ it is likely we are going to see more and more of these cases.  By their very nature, these cases will be fact specific.  It is important that businesses look at who is providing services to it, and what potential implications that may bring.

If you would like to discuss the implications for your business, please contact a member of the Employment team.