The Supreme Court has this week ruled that freelance Plumber, Mr Gary Smith, was a ‘worker’ and is entitled to basic employment rights.
Between August 2005 and April 2011, Mr Smith exclusively worked as a Plumbing and Heating Engineer for Pimlico Plumbers Ltd in London. Mr Smith suffered a heart attack in January 2011 and sought to work three days per week instead of five. Pimlico Plumbers refused to grant Mr Smith’s request and terminated his contract on 3rd May 2011.
Mr Smith proceeded to issue proceedings in the Employment Tribunal alleging that he had been unfairly dismissed, that an unlawful deduction had been made from his wages, that he had not be paid for a period of statutory annual leave and that he had been discriminated against by virtue of his disability.
The Legal Issues
A preliminary issue arose in respect of Mr Smith’s status and whether or not he had the right to bring the above claims.
The Tribunal considered the following in their assessment of Mr Smith’s status: –
- The contractual documentation expressly stated that he was an independent contractor and under no obligation to accept any work or assignment from the Company.
- The Company was not obligated to offer him any work or assignment.
- The Company manual stated that he should complete a minimum of 40 hours work a week.
- Mr Smith had to hire and drive a branded Company van and wear its uniform. He was provided with a Company mobile phone, although he provided his own materials and tools.
- He was VAT registered and submitted invoices to the Company
- The contractual agreement gave no right to substitute work but Mr Smith could be substituted by another person.
- Mr Smith was entitled to sub-contract to others in relation to specialist work if he had not the necessary skills; however, this was with the consent of the Company.
- A restrictive clause within the contract prevented Mr Smith from working as a plumber within the Greater London area for three months following termination.
It was held that Mr Smith did not qualify as an ‘Employee’ and he was unable to advance his claim for unfair dismissal.
The Tribunal held that Mr Smith did qualify as a ‘worker’ as the contract exercised tight administrative control over him during his periods of work. Mr Smith was therefore entitled to bring claims for unauthorised deduction from wages, statutory holiday pay and disability discrimination.
Pimlico Plumbers appealed the decision of the Tribunal to the Employment Appeal Tribunal (EAT). They were unsuccessful in their appeal. They then appealed the decision to the Court of Appeal and in February 2017, the Court of Appeal upheld the Employment Tribunal and the EAT’s findings that Mr Smith was a ‘worker’ and therefore entitled to basic employment rights, including holiday pay and the national minimum wage.
An appeal was subsequently lodged with the Supreme Court and the matter was heard in February 2018 before Lady Hale, Lords Wilson, Hughes and Lloyd-Jones and Lady Black. The Supreme Court in their decision unanimously dismissed the appeal finding that Mr Smith does qualify as a ‘worker’ under the employment legislation. Mr Smith’s case will now return to the Employment Tribunal to be heard.
The decision has boosted the employment rights of workers. Some elements of Mr Smith’s contract resembled self-employment however others exercised tight administrative control. Where Companies depend on contractors and self-employed individuals, tt is important that all contracts / agreements are carefully worded to ensure clarity in respect of legal status.