Self-employed contractors urged to think twice before attempting to challenge their legal status, in the wake of the Supreme Court’s decision to reject Pimlico Plumbers’ appeal against an employment tribunal decision. Contributor Elaine Howard, Associate Director – Emms Gilmore Liberson (EGL),
Independent contractors are advised to proceed with caution, as employers brace themselves for an anticipated avalanche of litigation around employment status. Pimlico Plumbers was defeated in its attempt to appeal an employment tribunal’s decision in favour of one of its former self-employed operatives, paving the way for an unfair dismissal claim.
Gary Smith had worked solely for the plumbing firm for six years before being dismissed. Although he was VAT registered and paid self-employed tax, Mr. Smith successfully argued that he was entitled to workers’ rights, including national minimum wage, sick pay and protection from discrimination.
Elaine Howard, said: “Whilst the Pimlico ruling is potentially significant for freelance workers and firms in the “gig” economy, it does not necessarily mean that all contractors will succeed in gaining legal recognition as a worker.
“One of the key issues in determining employment status is the degree of control employers have over those engaged by them. In the case of Pimlico Plumbers, operatives were required to work exclusively for Pimlico, to wear uniforms, comply with personal conduct guidelines and liaise with the company regarding time off work.
“Pimlico contractors were not free to decide when to work, which is one of the indicators of self-employed status. Therefore future claims will still be decided upon specific facts and the business model of the employer.”
The combination of the Supreme Court decision and last year’s Taylor Review into the so-called gig economy may increase pressure upon employers to provide a greater balance between flexibility and job security to avoid potential tribunal proceedings.
Many businesses will now be awaiting new government legislation on how to categorise their workforce, as existing employment law – dating back to 1996 – is rendered increasingly unfit for purpose.
Elaine said: “Businesses should take note of the fact it will not be possible to exercise the degree of tight administrative control over self-employed workers that employment contracts provide for, without those workers being entitled to certain rights that the genuinely self-employed are not afforded. It is therefore important to ensure that any contracts or service agreements are carefully drafted to ensure confusion does not arise.”