In Pimlico Plumbers Ltd v Smith, Smith (S) carried out plumbing and maintenance work solely for Pimlico Plumbing (PP). He claims that, following a heart attack, he was unfairly or wrongfully dismissed. Having examined the terms of his working arrangements (paragraphs 6 to 45 of the judgment), an ET found that S was not an employee, but was a worker for the purposes of the Employment Rights Act 1996 (ERA) and the Working Time Regulations 1998 (WTR) and in employment under the Equality Act 2010 (EqA) (para 54). In summary:

• The agreement, and its main purpose, was for S personally to provide work for PP.
• The Manual obliged S to work a normal week of 40 hours.
• Although there was flexibility, engineers were expected to discuss and agree their working hours with PP.
• There was not an unfettered right to substitute at will.
• Although S controlled estimates and work done, PP exercised very tight control in most other respects.
• PP was not a client or customer of S’s business but should be regarded as a principal. S was an integral part of PP’s operations and subordinate to PP. He was not in business on his own account.

PP appealed to the EAT who rejected the appeal, and then to the Court of Appeal. The Court held that on the basis of the evidence and the relevant case law, the ET was correct to find that, on the proper interpretation of the working arrangements, S was a worker within the meaning of the ERA and the WTR, and his working situation fell within the definition of “employment” in the EqA during the period that he worked for PP.

The ruling means that there is no jurisdiction to consider S’s claims for unfair dismissal, wrongful dismissal, entitlement to pay during the period of a medical suspension and failure to provide particulars of employment. But there is jurisdiction to consider his complaints of direct disability discrimination, discrimination because of a failure to make reasonable adjustments, and in respect of holiday pay and unauthorised deductions from wages.

In a reference to the ‘gig’ economy, the CA commented 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.

The Equality and Human Rights Commission (EHRC) funded S’s case. The EHRC commented that the judgment will help protect the rights of workers employed in the ‘gig economy’ who are incorrectly described as contractors by the companies they work for. The TUC commented that ruling exposes once again the growing problem of sham self-employment.

This update provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Click on the links to access full details. If no link is provided, contact us for more information.  Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, SM&B cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.