In the case of Pimlico Plumbers and Charlie Mullins v. Gary Smith, the Supreme Court has upheld a 2017 decision by the Court of Appeal that a self-employed plumber can, for employment purposes, be categorised as a ‘worker’. This term has specific meaning under the Employment Rights Act 1996. A ‘worker’ is an individual working under an employment contract for one who is party to that contract but cannot be considered a customer. In this case, therefore, Mr. Gary Smith was working for Pimlico Plumbers, but Pimlico is not his customer since his customers are the people requiring his plumbing services. Workers are an important category of working people that falls between conventional employees and fully independent contractors. As a result of this ruling Mr. Smith has acquired important employment rights.
The origins of the matter are in Mr. Smith’s attempts to reduce his working hours following a heart attack in 2011. Rather than agreeing to this Pimlico Plumbers terminated his contract, believing that it could do so without risk as Mr. Smith was an independent contractor. Mr. Smith brought the matter to the Employment Tribunal, arguing that he had been unfairly dismissed on the grounds of disability.
Mr. Smith, who for tax purposes is self-employed, worked as a plumber for Pimlico for six years between 2005 and 2011. Although documentation described him as an independent contractor he was required to wear a Pimlico uniform, drive a van bearing Pimlico’s logo and fitted with a GPS tracker to monitor his movements, carry a Pimlico identity card, and could only be reached by customers via Pimlico. His contract clearly implied an expectation that he would do any work personally and imposed significant restrictions on who could substitute for him, allowing only people contracted to Pimlico under the same terms or otherwise approved by them. The contract also required him to notify Pimlico of the days when he was unavailable to work, required him to work a minimum number of hours each week and contained post-termination restrictive covenants.
Whilst all of those factors sound like an employer/employee arrangement Mr. Smith was paid by Pimlico only on receipt of an invoice, was required to use his own tools and materials, took personal liability for his work, was required to have his own professional indemnity insurance, was taxed as self-employed, was VAT registered, was not obliged to accept jobs offered through Pimlico and could, in theory, decide on his own working hours.
The original Tribunal decision, now upheld by the Employment Appeal Tribunal, the Court of Appeal and the Supreme Court, was that Mr. Smith was not an employee so was not protected against unfair dismissal, but was a worker and thereby entitled to holiday pay and protection against discrimination. The Supreme Court ruling clarified that had Mr. Smith been genuinely self-employed in the work he carried out for Pimlico Plumbers there would have been no requirement for personal service and there would have been a right of substitution. Because he was expected to perform work personally and because Pimlico, by virtue of the control it exerted during the period of the contract, was not a client or customer, he was a worker with worker’s rights.
There are clear implications in this matter for any employers contracting out work to self-employed subcontractors. It is now highly advisable for all such agreements to be checked carefully in order to ensure against unexpected liabilities.
