Pimlico Plumbers loses employment rights case in landmark legal battle
- by Xavier Trudeau
- in Financer
- — Juin 14, 2018
Britain's Supreme Court ruled on Wednesday that a plumber hired on a self-employed basis was entitled to workers' rights, in a case that could increase pressure on firms in the gig economy to change their business models.
"Gary Smith knew he was a subcontractor and he had been very happy for six years and all of a sudden due to his illness he wanted to claim workers' rights - basically wanted to have his cake and eat it".
Pimlico Plumbers CEO Charlie Mullins warned that other companies using self-employed contractors may face a "tsumani of claims" as a result of this ruling.
Britain's top judges were hearing the case of Gary Smith who worked for Pimlico Plumbers between 2005 and 2011 and first took his case to an employment tribunal almost seven years ago.
The judge added: "More importantly, its terms enabled the company to exercise tight administrative control over him during his periods of work it; to impose fierce conditions on when and how much it paid to him, which were described at one point as his wages; and to restrict his ability to compete with it for plumbing work following any termination of their relationship".
The Supreme Court judgement said: "The dominant feature of Mr Smith's contracts with Pimlico was an obligation of personal performance".
Some commentators have said the ruling is expected to have a major impact on what is often called the gig economy.
The ruling is likely to have a major impact on the sort of flexible working arrangements which have been on the increase in recent years and could affect a number of other cases now progressing through the courts.
Susannah Kintish, of Mishcon de Reya, said: "This judgment does not lay down any new principles of law around worker status".
"All eyes will be on the government as businesses await legislation on how to categorize their workforce - something which could still be a matter of years away", she said.
Wilson said Smith should be considered as a "limb (b) worker" and therefore entitled to certain rights.
"In the meantime, the gig economy continues to evolve and existing employment law is rendered increasingly unfit for goal".
During his time at Pimlico Plumbers, Smith paid tax on a self-employed basis though he worked exclusively for Pimlico, was required to wear the company uniform, rented a branded van and was required to work a minimum number of weekly hours.
He claimed that, after suffering a heart attack in 2011 and trying to reduce his hours, he was unfairly dismissed and the tribunal made a preliminary finding that he was a "worker" within the meaning of the 1996 Employment Rights Act.
A tribunal made a preliminary finding that he was a "worker" within the meaning of the 1996 Employment Rights Act - a decision that was upheld by the Employment Appeal Tribunal and again by the Court of Appeal in January past year.
Those categorized as workers receive the minimum wage, holiday pay and rest breaks, prompting unions to take legal action to end what they say are exploitative practices in the gig economy, where people tend to work for several firms without fixed contracts.
