A plumber has won a legal battle for working rights in the latest significant court ruling over freelance operations in the modern workplace.
Gary Smith was engaged as a plumber by Pimlico Plumbers (the Company) from August 2005 to April 2011. The written agreements between him and the Company gave the impression that he was in business on his own account, the most recent agreement referring to him as a “self-employed operative”. The contract terms dictated that he had to wear Pimlico’s uniform, drive a van leased from Pimlico (which was fixed with a GPS tracker and labelled with the Company’s logo) and could only be contacted by customers through the Company. On the other hand, Mr Smith was required to provide his own tools, equipment and materials. He handled his own tax and was VAT registered. He also maintained his own insurance and had to correct any errors in his plumbing work free of charge. Mr Smith was required to work a minimum number of hours every week but could choose when he worked and which jobs he took. Any contracts or estimates issued for plumbing work were in the name of the Company and payments were made to the Company, which was under no obligation to provide work for Mr Smith if none was available. The Company didn’t have to pay him in certain circumstances either, for example, where the client took longer than six months to pay or Mr Smith had to correct any mistakes.
The arrangement came to a head when Mr Smith wanted to reduce his working days at the Company following a heart attack; he subsequently sued the Company after he was dismissed. He said his status was more akin to an employee than contractor and that he should have received benefits such as sick pay.
The original tribunal had to determine whether he was an employee, worker or self-employed in order to decide whether it had jurisdiction to hear his claims. The tribunal decided he was not an employee because there was no legal obligation on the Company to provide him with work, and the intentions and actions of the parties to the contract made it clear they considered he was self-employed. He also bore a substantial financial risk, including not being entitled to payment in some situations and the risk involved in quoting too low for a job. However, the tribunal decided that he was a worker because there was an obligation to provide his services personally.
The case has subsequently been heard before the Employment Appeals Tribunal and most recently the Court of Appeal. The Court of Appeal has ruled that because Mr Smith worked a minimum of 40 hours a week, had to wear a company uniform, and drive Pimlico Plumber’s vehicles he was a worker. He paid taxes as a self-employed person but only worked for the one company for six years. As such he is entitled to basic workers’ rights.
This decision is the latest in a long line of cases regarding employment status. No doubt the decision will be appealed by Pimlico; however the decision will be utilised by others with similar complaints and is another victory for the ‘workers’ of the gig economy.