The Supreme Court has dismissed an appeal by Pimlico Plumbers over the employment status of a plumbing and heating engineer in what has been called a landmark ruling for workers in the gig economy.
The judgement upholds decisions by the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal, which found plumber Gary Smith was engaged by the London firm as a “worker”, despite being described in his contract as an “independent contractor”.
This means he is entitled to employment rights including sick pay, holidays and protection from discrimination.
Charlie Mullins, founder of Pimlico Plumbers, argued that Smith was self-employed because he was free to substitute someone else to carry out his work and accept outside jobs, though not if they were offered by one of Pimlico’s clients.
Substitution was a key issue addressed in the case. The court considered whether Smith had to carry out his work personally, which would imply that he was a worker and not self-employed, or whether he could send someone else.
The contract stated Smith could arrange for the work to be done by another “Pimlico operative” if, for example, he was offered a higher-paid job.
However, the court ruled that the employment tribunal was “entitled to conclude” that Smith was a worker because “the dominant feature of [his] contract was that he must do the work himself” and his right to ask someone else was limited.
Judge Lord Wilson of Culworth said: “To the extent that his facility to appoint a substitute was the product of a contractual right, the limitation of it was significant: the substitute had to come from the ranks of Pimlico operatives, in other words from those bound to Pimlico by an identical suite of heavy obligations.”
Under his agreement with Pimlico Plumbers, Smith was also required to wear a company-branded uniform, rent a van displaying the firm’s logo and work at least 40 hours in a five-day week.
Lord Wilson said: “In his judgment in the appeal tribunal Judge Serota QC concluded that, on the one hand, Pimlico wanted to present their operatives to the public as part of its workforce but that, on the other, it wanted to render them self-employed in business on their own account; and that the contractual documents had been ‘carefully choreographed’ to serve these inconsistent objectives.”
He said the company “exerted a substantial measure of control over its operatives”, adding: “There were features of the contract which strongly militated against recognition of Pimlico as a client or customer of Mr Smith. Its tight control over him was reflected in its requirements that he should wear the branded Pimlico uniform; drive its branded van, to which Pimlico applied a tracker; carry its identity card; and closely follow the administrative instructions of its control room.
“The severe terms as to when and how much it was obliged to pay him, on which it relied, betrayed a grip on his economy inconsistent with his being a truly independent contractor. The contract made references to ‘wages’, ‘gross misconduct’ and ‘dismissal’. Were these terms ill-considered lapses which shed light on its true nature? And then there was a suite of covenants restrictive of his working activities following termination.”