In the latest round of prominent rulings on freelance employment, Gary Smith, who worked for Pimlico Plumbers has won his legal battle for working rights.
The case hinged on whether Mr Smith was a genuine self-employed contractor or a worker for the company. He was VAT-registered, and paying tax on a self-employed basis, but worked solely for Pimlico Plumbers for six years. His contract required him to work 40 hours over 5 days.
Mr. Smith wanted to reduce his hours and claim for disability following a heart attack. The company refused and took away his branded van, which he had hired. Smith claims this amounted to dismissal. Smith’s lawyer had argued that her client was “tightly controlled” by Pimlico Plumbers and unable to work for anyone else. The earlier tribunal had heard that:
- operatives were required to wear Pimlico uniforms,
- to drive vans with the Pimlico logo
- could only be contacted by customers through Pimlico
- contracts and estimates were issued in the name of Pimlico
- payment was made to Pimlico
- Pimlico monitored the movements of operatives through a GPS system on their vans.’
‘Entitled to workers rights’
The earlier tribunal had ruled that the plumbers were not employees – but they were workers and as such entitled to basic workers’ rights. As a worker, Smith would be entitled to claim the national minimum wage, receive paid holiday and the ability to bring discrimination claims.
Charlie Mullins, the founder of London-based Pimlico Plumbers, had argued that plumbers were hired on the basis that they were self-employed, provided their own materials, and did not have workers’ benefits, but were paid significantly more as a result. He said Mr Smith was paid £80,000.
Court of Appeal upholds earlier ruling
Today’s Court of Appeal decision upheld the decision of the earlier tribunal, and the ruling is expected to lead to more claims as many in the UK now work as part of the ‘gig economy’ as freelancers.
After the ruling, Mr Mullins said he had now changed the contracts for his self employed workforce since the case:
“Like our plumbing, now our contracts are watertight,” he said, adding that it was “a shame that we could not continue with Mr. Smith’s services”.
Mullins may appeal
Mr Mullins is considering an appeal to the Supreme Court.
Mr Smith’s solicitor Jacqueline McGuigan said that the decision was “huge” and was a “resounding victory” for her client.
TUC: ‘Growing problem of sham self-employment’
TUC General Secretary Frances O’Grady said:
“This case has exposed once again the growing problem of sham self-employment. Unscrupulous bosses falsely claim their workers are self-employed. This allows them to get out of paying the minimum wage and providing basics like paid holidays and rest breaks.
“The government must crack down on these shady employment practices by beefing up the law. But the best form of protection for working people is to get together with a group of mates and join a union in your workplace.”
ELAS Employment law consultant Emma O’Leary says:
“This further reinforces the line that Tribunals are taking regarding employment status following on from the Uber and CitySprint rulings. In this case Mr Smith was VAT registered and was not on PAYE yet the court still considered him a worker rather than self-employed. This demonstrates that even if both parties initially believe and agree that there is no employment relationship, the Tribunal and HMRC can still imply one.
“This verdict reinforces the need for future clarification and consideration of employment status and means that employers need to ensure that those in their employ who may be classified as workers are entitled to basic employment rights.”