The Supreme Court has ruled in favour of Gary Smith after it agreed that he was a worker entitled to rights such as holiday pay and sick leave.
The case, Pimlico Plumbers Ltd v Smith, centred on the question of employment status. Smith originally brought the case after claiming that he had been unfairly dismissed following a heart attack that meant he was unable to work as many hours as he previously had.
The court had to decided whether the relationship between the two parties was that of an employer/worker or of a self-employed contractor.
Despite the fact that Pimlico’s contractual arrangements with its plumbers required them to use their own tools, take responsibility for their work and provide indemnity insurance, the Supreme Court found that they were in fact workers.
This was down to two main points. First, that the plumbers were restricted to “tight obligations” which were incompatible with Pimlico’s argument that they were a customer of Smith. Second, that Smith was required to undertake the work personally – he could not sub-contract the work to another person of his choice. This meant that the relationship was one of employer and worker.
Although many have hailed this decision as a ‘win’ for gig economy workers, employment law experts have highlighted that the Supreme Court ruling did not set a precedent.
Philip Richardson, Head of Employment Law at Stephensons, said: “While stopping short of setting a precedent, the Supreme Court judgement has nonetheless applied pressure to legislators to ‘sort out’ the growing confusion surrounding the gig economy.
“In my view, given today’s decision and the ongoing Taylor Review into working practices, it is now a matter of ‘when, not if’ legislation is brought in to prevent employers from using these gig economy models.”
Alan Lewis, Partner at Irwin Mitchell, explained that, now the issue of employment status has been resolved, the case will go back to the tribunal to examine Smith’s claims in detail.
“However, it is not a game changer as the [Supreme] Court did not take the opportunity to provide clarity around the difficult concepts of mutuality of service. This means that cases will continue to be argued on their specific facts and, for businesses that rely on self-employed contracts, that means further uncertainty,” added Lewis.
“This decision is not necessarily a win for ‘gig economy’ workers seeking to challenge their employment status.Pimlico’s plumbers do not operate a gig model and the implications for Uber, City Sprint, Deliveroo etc may be limited, although the publicity around this case may encourage other “self-employed” contractors to challenge their legal status,” concluded Lewis.
Commenting on the decision, Charlie Mullins, CEO and founder of Pimlico Plumbers, warned that UK companies using self-employed contractors faced a ‘tsunami of claims’.
Mullins said: “This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get a nasty surprise from a former contractor demanding more money, despite having been paid in full years ago. It can only lead to a tsunami of claims.”
Mullins also criticised the approach taken by the Supreme Court judges who failed to set a precedent and bring the law in line with modern working practices.
“The five judges had the opportunity to drag our outdated employment law into the 21st Century, but instead they bottled the decision, and as a result thousands of companies across the UK, who use contractors in an honest and responsible way, remain exposed to huge potential claims in the future,” he said.
