UK: The gig economy and employment status

Mr Smith worked solely for Pimlico Plumbers for six years under a contract which described him as an ‘independent contractor’ in business on his own account. His contract was ended after he suffered a heart attack and he brought a number of claims against Pimlico Plumbers, including unfair dismissal, unlawful deductions from wages, holiday pay and discrimination. Before his claims could be heard, the court had to decide which claims he was allowed to bring – this depended on whether he was an employee, a worker or self-employed.

The Supreme Court (the UK’s highest court) said that despite being registered for VAT and paying self-employed tax, Mr Smith was entitled to basic workers’ rights. Key factors in the decision that Mr Smith was a worker were:

• the dominant feature of his contract was that he was required to perform the work himself – if he provided a substitute, this had to be another Pimlico Plumber on similar terms
• his subordinate position in the relationship with Pimlico Plumbers

As Mr Smith is a worker, he can continue with his claims against Pimlico Plumbers for holiday pay, unlawful deductions from wages and discrimination, which he would not have been entitled to bring if he were self-employed.

Comment:
If a business seeks to exercise a significant amount of control over how and by whom the work is done, and the individual is integrated into the business, which dictates terms that put the individual in a subordinate position, they are likely to be found to be a worker (if not an employee).

Pimlico Plumbers Ltd and another v Smith  https://www.supremecourt.uk/cases/docs/uksc-2017-0053-judgment.pdf

For our detailed update on this decision, see Gig-economy update – Supreme Court confirms Pimlico Plumber was a ‘worker’.  https://www.clydeco.com/blog/the-hive/article/gig-economy-update-supreme-court-confirms-pimlico-plumber-was-a-worker