Is it a bird, is it a plane, is he self-employed…?

Posted on Jun 29, 2018

The uproar over the gig economy workers rolls on following the finding that Mr Smith was in fact a worker engaged by Pimlico Plumbers following a lengthy battle through the courts.

You will probably remember that in this case Mr Smith contracted with Pimlico Plumbers as a plumber under the title of an independent contractor. However, Pimlico terminated its contract after poor Mr Smith suffered a heart attack. Mr Smith then went on to bring several claims against the company: unfair dismissal, unlawful deduction from wages, unpaid statutory annual leave and disability discrimination.

The case first went to the Employment Tribunal where it was held Mr Smith was not an employee, so he couldn’t claim unfair dismissal, but he was a worker which meant he had standing to bring the other claims.

The case eventually reached the Supreme Court where it was decided the Employment Tribunal ruling was correct, Mr Smith was indeed a worker.

Several factors were taken into consideration to determine his employment status; the first being that in the original contract Smith was described as a ‘subcontracted employee’ and stated that the terms of agreement were detailed in the company manual. Smith was also issued with a company identity card which all workers are issued with, he wore Pimlico’s uniform which included the company’s logo and drove a van with their logo on it. In addition, he worked solely for Pimlico and had a limited right to a substitute, he was required to complete a minimum of 40 hours work and Pimlico had no obligation to provide Smith with work on any day if there was none for him. Taking all these factors into account it was held he was a worker which meant he had certain rights.

As a result of this decision, the case will go back to the Employment Tribunal for the remainder of Mr Smith’s claims to be decided.

What does this mean?

Whilst this decision hasn’t had any major constitutional impacts regarding how to determine employment status, it may have huge impacts in the future. In response to this case, the Taylor Review of Modern Working Practices recommended putting greater emphasis on whether the employer exercises control and less focus on if there is an obligation of personal service to decide if someone is a worker.

In response to the Taylor reviews, the Government has consulted on greater clarity on employment status can be achieved. The result of this is awaited and whether it will mean that in the future there is a simpler method to determine employment status, the answer is “who know”!

Remember though:  you may be able to take from this case (and others) some hints and tips to assess your liability, but such cases are very fact sensitive and each scenario can be different.

So what can you do?

To employers out there reading this, and we have said it before, so apologies for the repeated message: Check your workforce, if you have long-term self-employed staff check their contracts and if you think that there’s a risk that they are more like workers, then they probably are.  Consider carefully whether you really need to run the risk when taking on new workers – would it better to employ them and manage them appropriately?  Challenge the business if they want to engage independent contractors as the potential liability in the long-run can far outweigh the employment responsibilities.