Matthew Smith: What does the Pimlico Plumbers case mean for employers?

Matthew Smith

After almost seven years of litigation, the Supreme Court has upheld the decisions of the Employment Tribunal, Employment Appeal Tribunal and Court of Appeal that Gary Smith was a ‘worker’ and not ‘self-employed’ in the high-profile case Pimlico Plumbers Ltd v Smith.

The Supreme Court found that the ‘dominant feature’ of Smith’s contracts was an obligation of personal performance. Although there was a limited right of substitution, which is the right to ask someone else to do the job, the substitute also had to be from Pimlico Plumbers. Further, Pimlico Plumbers was not Smith’s client or customer. He wore the branded uniform, drove the branded van and was subject to restrictive covenants. There were strict conditions about when and how much he was paid, and the contractual documents contained references to ‘wages‘, ‘gross misconduct’ and ‘dismissal’.

So, what does the decision mean for employers?

The case was decided on its own particular facts, with reference to specific contractual documentation and, arguably, does not provide much guidance to other organisations in the gig economy.

However, as a Supreme Court decision, the case is a leading authority on how to determine employment status and will be considered in other gig economy and employment status cases. One of the first is likely to be Uber’s Court of Appeal case in October.

The Supreme Court decision may encourage other individuals to commence proceedings, especially now Employment Tribunal fees have been abolished, to determine their employment status and to establish what employment rights, if any, they have. The decision may also have significant cost implications for organisations in a number of sectors where people have been treated as self-employed contractors rather than workers.

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In the longer term, the Supreme Court decision is likely to be relevant to the current consultation on employment status. This is because the government will take into account any significant case law, which will inevitably include the Supreme Court’s decision in Pimlico Plumbers.

Matthew Smith is a partner in the employment law team at Blake Morgan