Hot on the heels of the decision in CitySprint that bicycle couriers were ‘workers’ entitled to holiday pay, and the decision in Uber regarding drivers, the Court of Appeal has affirmed in the case of Pimlico Plumbers Ltd v Mullins v Smith 2017, that Mr Smith was a ‘worker’.

Background

Mr Smith worked as a plumber for Pimlico Plumbers (PP) between 25 August 2005 and 28 April 2011. Following the termination of his contract, he brought claims including for unfair dismissal (relating to which he needed to demonstrate employment status) and for holiday pay (relating to which he needed to demonstrate ‘worker’ status).

The Employment Tribunal held that, whilst Mr Smith was not an ‘employee’ and therefore not entitled to claim unfair dismissal, he was nevertheless a ‘worker’, which entitled him to bring a claim for holiday pay.

The tribunal stated in its judgment that the case, “puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor rather than employer and employee or worker.”

PPs’ operatives were issued with a PP ID card which had to be carried when working for PP and wore complete uniforms with PP logos. So far as the client was concerned, they would be under the impression that the operative worked for PP.

The Employment Tribunal’s reasons (affirmed by the Court of Appeal) that Mr Smith was a ‘worker’ entitled to holiday pay included:

  • Mr Smith was contracted provide work personally for PP (in other words there was no unfettered right for Mr Smith to provide his services to PP through a substitute);
  • Mr Smith’s contract required him to work on the days agreed with PP;
  • PP expected plumbers to agree their working hours with them;
  • PP exercised very tight control over work done and estimates; and
  • The restrictive covenants limiting Mr Smith’s right to work were also inconsistent with Mr Smith being in a business on his own account or ‘self-employed’.

Implications

The case further illustrates the challenges that can come when businesses want to have the best of both worlds: control over their staff and at the same time flexibility and national insurance breaks.

Many workers will not bring claims however, as they will have been benefiting from the flexibility and tax breaks themselves. The doctrine of illegality may get in the way. See our post on illegality.

See also our post on how to tell if your freelancers are in fact workers.

Published in…

Updates: For employers: Contracts and incentives | Holiday and working time | For employees: Holiday |
Tagged with: Employment status |

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