Pimlico Plumbers loses employment rights case

15 June 2018

The recent decision in the case of Pimlico Plumbers Ltd & another v Smith 2018 is expected to have major ramifications for freelance workers and those who work in what is known as the “gig” economy.  The gig economy is best described as a market relating to short-term contracts/freelance work as opposed to permanent jobs.

The case itself concerned Mr Smith who for 6 years until 2011, worked solely for Pimlico Plumbers (“Pimlico”). Following a heart attack in 2011, Mr Smith claims that his request for a 3 day working week was rejected and he was unfairly dismissed. The tribunal made a preliminary finding that he was a worker within the meaning of the Employment Rights Act. Pimlico disputed this and argued that the previous rulings were wrong to conclude Mr Smith was a worker.

The Supreme Court determined that despite Mr Smith being VAT registered and paying on tax a self-employed basis, that he had been a “worker” which fell within the meaning of section 230(3) of the Employment Rights Act.  As a result of the Courts decision, Mr Smith would be entitled to employment rights such as holiday and sick pay.

There are various factors which the Court took into consideration when making their decision. One of the main points in this case was that the Court identified that the contract entered into between the parties allowed Pimlico to “exert a substantial measure of control over its operatives”. The “tight administrative control” was reflected in the requirements that Mr Smith should work a minimum number of hours per week, wear the branded Pimlico uniform, drive its branded van to which Pimlico applied a tracker, carry its identify card and closely follow the administrative instructions of its control room. The contract also made references to “wages”, “gross misconduct” and “dismissal”. Restrictive covenants on working activities were also imposed on Mr Smith following termination.

As a result of the decision, Mr Smith will now be able to go ahead with his employment tribunal claim against Pimlico.

It is an important decision for all business. This case highlight`s the importance of reviewing contracts and manuals etc and ensuring whether they have contracted self employed, workers or employees. Otherwise staff could bring employment tribunal claim for considerable damages if you don’t apply the correct principles. If you would like any assistance in reviewing your contracts or manuals etc then please give us a call on 01455 852028 or contact us.

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