The Pimlico Plumbers case – making it harder for employers to justify ‘self-employed’ status

The Supreme Court today found in favour of plumber Gary Smith in his claim that he was entitled to sick pay and holiday pay, despite his employer Pimlico Plumbers claiming he was self–employed.

Although he provided his own tools and could choose when he worked, Mr Smith worked solely for Pimlico, was required to wear their uniform and to work a minimum number of hours each week – all factors which contributed to the court reaching their verdict.

While the Supreme Court’s judgment is based on the facts specific to this case, it is likely to have implications for other cases currently progressing through the employment courts. This is another major challenge to the gig economy, after the recent judgement in the Uber case and is the first worker status case to reach the conclusion of the legal process.

So, what is the difference between a genuine self-employed contractor and a ‘worker’? Under the Employment Rights Act 1996, a ‘worker’ is defined as someone who delivers work or services personally to an individual or entity, where that individual or entity is not a customer of the ‘worker’. The key word in the definition is ‘personally’ – if someone can (and does) provide a substitute to do the work on occasions, they are more likely to be classed as self-employed.

The reason people are challenging their employment status in the gig economy is that workers are entitled to certain rights not available to the genuinely self-employed. The rights include:

• entitlement to the National Minimum Wage
• protection against unlawful deductions from wages
• the statutory minimum level of paid holiday
• the statutory minimum length of rest breaks under the Working Time Regulations; to not work more than 48 hours on average per week or to opt out of this right if they choose
• protection against unlawful discrimination
• protection for whistleblowing
• to not be treated less favourably if working part-time.

If you are an employer with concerns for how this judgement may affect your business, contact us for a review of your self-employed contractors.