The Supreme Court has handed down its eagerly anticipated decision in Pimlico Plumbers Ltd and Mullins v Smith, finding that an Employment Tribunal had been entitled to conclude that Mr Smith was a “worker” for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998, and in employment for the purposes of the Equality Act 2010.
Mr Smith carried out work solely for Pimlico Plumbers from August 2005. In May 2011, Pimlico Plumbers terminated their arrangement and Mr Smith subsequently issued proceedings in the Employment Tribunal claiming holiday pay, unlawful deductions from wages and disability discrimination.
At the outset the tribunal were required to determine Mr Smith’s employment status. His contract stated that Mr Smith was an independent contractor, in business on his own account, and provided no obligations on Pimlico Plumbers to accept work or for Mr Smith to accept it when offered. However, a separate company manual stated that Mr Smith was required to complete 40 hours per week, wear a uniform, drive a branded van on assignments and abide by the restrictive covenants in place covering the Greater London area for 3 months after the termination of the agreement.
The Employment Tribunal found that Mr Smith was a “worker” deciding that he was obliged to carry out the work personally and did not have an unfettered right to give away his work to someone else to do. Comparing the contract with what happened in practice, the tribunal decided that Mr Smith was not in business on his own account. On appeal, the Employment Appeal Tribunal and the Court of Appeal both agreed with the tribunal’s decision.
The case went to the Supreme Court which has now also dismissed Pimlico Plumbers’ appeal. When considering whether Mr Smith was able to give away his work or appoint someone else to do it, the Supreme Court found that Mr Smith could only pass his work to another Pimlico Plumber’s operative (who would also be bound by the same set of obligations). The tribunal was therefore entitled to conclude that this limited right of substitution was not inconsistent with an obligation to provide personal service.
When considering whether Pimlico Plumbers was a client or customer of Mr Smith, the Supreme Court held that the tribunal had been entitled to have regard to the number of factors which pointed away from Pimlico Plumbers being a client of customer of Mr Smith, including the requirement to wear a branded uniform, drive a branded van and closely follow the instructions of the control room. Furthermore, there were contractual references to “wages”, “gross misconduct” and “dismissal”. The tribunal had therefore been entitled to conclude that Mr Smith was a “worker”.
Charlie Mullins OBE (the founder of Pimlico Plumbers) has made no secret of the fact that he is disappointed with the Supreme Court’s decision and believes that it could have massive ramifications for thousands of companies.
Whether the decision will open the floodgates to further claims, or whether it will affect the legal challenges already being brought against companies such as Uber, remains to be seen. In reality, the judgement adds little to the existing case law surrounding the meaning of a “worker” and shows that each case concerning employment status will need to be considered on the facts. In the meantime, all eyes will be on the Government to review and update employment law in response to modern working practices.