Pimlico Plumbers are ‘Workers’

In the latest of a long line of cases on employment status, the Supreme Court has held in Pimlico Plumbers Ltd and another v Smith [2018] that plumbers classified as self-employed are in fact workers for the purposes of employment law. Workers have a more limited set of rights than employees but are entitled to the national minimum wage and holiday pay. Uber, Citysprint and Addison Lee have all found themselves at the wrong end of decisions on worker status.

Gary Smith worked exclusively for Pimlico Plumbers. The signed agreement stated that he was “an independent contractor of the Company, in business on your own account”. The agreement stated that there was no obligation to provide or accept work, however, the company manual referred to a 40-hour working week. The contract imposed various requirements on him, including that he should drive a branded van with a tracker, wear a branded uniform, carry a Pimlico ID card, and follow administrative instructions from the control room. There was no express right of substitution in the contractual documentation but Pimlico’s plumbers could swap assignments between themselves.

The Supreme Court focussed on two main tests in deciding that the tribunal was entitled to find that Mr Smith was a worker and also that he was entitled to protection from discrimination under the Equality Act:

1. Personal Service – although there was a right to provide a substitute this was limited to another Pimlico operative.
2. Whether Pimlico was a client or customer of a business operated by Smith – on the facts, there was a finding that Pimlico was obliged to offer work if it was available, and Mr Smith was obliged to keep himself available to work up to 40 hours a week. The court noted the tight control that Pimlico had over Mr Smith, including the requirements about branding, the van tracker, ID card and following instructions. In addition, there were “severe” terms about when and how much Pimlico were obliged to pay him, as well as contractual references to terms such as “wages”, “gross misconduct” and “dismissal” and a suite of restrictive covenants regarding his working activities following termination.

The finding meant that Mr Smith could pursue claims for disability discrimination, holiday pay and arrears of pay.

As with many employment status cases, the outcome in this case turned on the reality of how the working relationship between the parties operated in practice, making it hard to draw general conclusions. Some features of the judgment provide guidance for future cases, however. The suggestion is that only a right of substitution that is both genuine and unfettered is likely to count towards self-employment. It is also a reminder for companies to set out clear and coherent written terms. Further, the Court confirmed that the tests for a “worker” and for “employment” under the Equality Act are the same, even though the actual wording of the legislation in question is different.