In the modern era the business mode operated by many companies has vastly developed since the Employment Rights Act 1996 was introduced. It is now common for workers to work on zero hours contracts or services to be engaged on a self-employed basis; otherwise referred to as ‘gig economy workers’. Companies often have worldwide franchises without ‘employing’ any staff, most modern companies engage the services of staff on a self – employed basis. It appears that the legislation is outdated and does not offer protection to a huge proportion of the workforce.
The Judgment handed down by United Kingdom’s highest court; The Supreme Court, in the landmark case of Pimlico Plumbers Ltd v Smith [2018] UKSC 29, on appeal from: [2017] EWCA Civ 51, could potentially have widespread implications for many who fall within the category of ‘gig economy workers’ or ‘self-employed workers’ and afford them the same worker’s rights and protections as a person who is classed as an employee.
The brief facts of the case are that Mr Gary Smith had undertaken plumbing work for Pimlico Plumbers Ltd between 2005 – 2011. Mr Smith had signed an agreement with Pimlico Plumbers and was also subject to numerous conditions imposed upon him via a manual that was issued by Pimlico Plumbers.
The agreement and manual imposed upon Mr Smith certain conditions that he had to uphold, such as wearing the branded company uniform and carrying a valid company ID card, to name but a few. Mr Smith agreed that was liable for his own tax and VAT payments and had to ensure that he held public liability insurance.
In January 2011 Mr Smith suffered a heart attack. Due to his health condition Mr Smith submitted a request to Pimlico Plumbers requesting that his working week be reduced from 5 days to 3. Pimlico Plumbers refused to grant Mr Smith’s request. The branded company van that Mr Smith had leased from Pimlico Plumbers was removed from him.
Mr Smith lodged a claim for unfair dismissal with an Employment Tribunal in 2012. Pimlico Plumbers maintained that Mr Smith was employed on a self-employed basis and defended the claim on the basis that self–employed individuals do not have the rights or benefits of employees.
The original Employment Tribunal held that Mr Smith was not an ‘employee’ of Pimlico Plumbers but he was a ‘worker’ and that he had been in the ‘employment’ of Pimlico Plumbers.
Pimlico Plumbers appealed the matter through the Employment Tribunal Appeal process, The Court of Appeal and The Supreme Court, on the basis that Mr Smith was not entitled to the same benefits, protections and rights as an employee, as the dominant feature of Mr Smith’s agreement with Pimlico Plumbers was for his personal performance and he could appoint a substitute to perform any job that had been given to him by Pimlico Plumbers.
Mr Smith argued that whilst he agreed that he was entitled to appoint a ‘substitute’ in relation to any jobs that were allocated to him by Pimlico Plumbers, the substitute had to be appointed from Pimlico Plumbers bank of plumbers.
Due to the agreement and manual Mr Smith was also subject to extensive covenants that would restrict his future employment options following the termination of his agreement with Pimlico Plumbers.
The Supreme Court upheld the decision of the lower courts, in so far that, they dismissed the appeal of Pimlico Plumbers Ltd and upheld the finding of the original Employment Tribunal. Mr Smith’s matter will now revert to The Employment Tribunal to be heard.
Based on the Judgment of the Supreme Court the floodgates could now be open for claims in relation to employee rights, benefits and protections by workers who were previously denied such benefits.
Whilst the Judgment of The Supreme Court did not go as far as to redefine what legally constitutes a worker, the way could now be paved for similar actions to be taken by workers who have previously been denied the same protections and rights as employees.
If you require legal advice in relation to Employment Rights, then contact our team of specialist solicitors who will be able to fully assess your matter and provide you with legal advice. Each case will of course be assessed on a case by case basis and will be subject to its own merits.
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