Top judges have struck a blow for workers in the so-called gig economy by ruling that a self-employed plumber is entitled to employment rights including sick pay and holidays.
The Supreme Court today declared that Gary Smith could claim “worker status” for his six years at Pimlico Plumbers, despite being described in his contract as a “self-employed operative”.
The landmark ruling is predicted to have “huge ramifications” across a range of industries, as self-employed workers seek the same rights as salaried staff.
Judges found that Mr Smith was obliged to use a Pimlico Plumber van for assignments and was under contract to work a minimum number of hours each week.
The London-based plumbing firm, headed by chief executive Charlie Mullins, fought the case all the way to the Supreme Court, arguing Mr Smith was in a strong position to command high earnings as a self-employed skilled tradesman and should not have the same employment rights as traditional workers.
But delivering the ruling this morning, Lord Wilson said Mr Smith was “an integral part of the operation, subordinate to it, and acting under its direction.
“The contract did provide him with an element of operational and financial independence, but Mr Smith’s services to the company’s customers were marketed through the company”, he said.
“More importantly the terms enabled the company to exercise tight administrative control over him during the period of work for it, to impose fierce conditions when and how much it was paying to him, described at one point as ‘wages’, and to restrict his ability to compete for work following the termination of its relationship.”
The judge added that Pimlico Plumber, under the terms of the contract, obliged Mr Smith to accept work that he was skilled enough to do, and had oversight on “his appearance and the cleanliness of his uniform”.
Mr Mullins had accepted before today’s ruling that the judge’s decision would have “huge ramifications” for businesses in a number of industries that rely on gig economy workers.
It comes on the back of similar court cases for worker rights which have been launched against Deliveroo and Uber.
Mr Smith joined Pimlico Plumbers in 2005 as one of 125 contractors available for call-outs to customers, and was given a company uniform and van which he rented.
He wanted to reduce his hours in 2011 after suffering from a heart attack, but instead lost his job and launched a claim for unfair dismissal.
An employment tribunal made a preliminary finding that he was a “worker”, within the meaning of the 1996 Employment Rights Act – a decision which was backed at the Employment Appeal Tribunal and again by the Court of Appeal in February last year.
Reacting to the ruling, Sean Nesbitt, a partner at international law firm Taylor Wessing, said he “would expect this to impact every manner of organisation, whatever the industry, in how they construct and operate their contracts.”
Jeremy Coy, an associate at law firm Russell-Cooke, added the ruling ensures that workers cannot simply be labelled as ‘self-employed’ for firm’s to take away their rights.
“The nature of the relationship and the degree of bargaining power and obligation between the parties is crucial in determining workers’ rights”, he said.
The Pimlico Plumbers case will now be sent back to the employment tribunal for consideration for Mr Smith’s wrongful dismissal claim