14 June 2018

Gary Smith, a plumber who worked solely for Pimlico Plumbers for six years, was misclassified by the company as an independent contractor and was in fact a worker with employment rights, the Supreme Court has confirmed.

Mr Smith normally worked five days a week for the firm but, after suffering a heart attack, he requested to cut his hours to three days. The firm refused and removed from him his branded van, which he had been paying to hire. He claims he was dismissed.

Mr Smith was VAT-registered and paying self-employed tax, but does not in itself mean that he was legally independent of Pimlico and the reality of the situation was that the firm took managerial control of him, the court confirmed in a unanimous decision by all five judges.

" Although the contract did provide him with elements of operational and financial independence, Mr Smith’s services to the company’s customers were marketed through the company," Lord Wilson explained.

"More importantly, their terms enabled the company to exercise tight administrative control over him, impose fierce conditions on when and how much they paid to him and restrict his ability to compete with them for plumbing work following any termination of their relationship."

As a worker, Mr Smith is entitled to the minimum wage, holiday pay and sick pay and the case will now be referred back to an employment tribunal to consider whether he was unfairly dismissed.

Pimlico Plumbers had appealed to the Supreme Court after both an employment tribunal and an Employment Appeals Tribunal also found in favour of the claimant. Following the decision, Chief Executive of the firm Charlie Mullins said he would now consider appealing to a European Court.

"This case has exposed how widely sham self-employment has spread," Frances O'Grady, TUC General Secretary, said.

"It’s time to end the Wild West in the gig economy."

The TUC called for the burden of proof to be reversed when it comes to employment status so that employers would have to be able to demonstrate that a contractor was genuinely self employed rather than individuals having to prove they are workers.

This is one of the recommendations of the Institute of Employment Rights' Manifesto for Labour Law, where our experts also propose that the three-tier employment status system is replaced with a universal status of worker for all people in employment. This would provide the same statutory rights from day one to everyone but the self employed.

Click here to read more about the Manifesto for Labour Law