- Solicitors For Business
- Solicitors For You
- About Us
- News & Events
Pimlico Plumbers - worker status confirmed22nd June 2018 Employment
Until a few years ago, Pimlico Plumbers was just another domestic maintenance service in London that many may have recognised due to their personalised number plates using words such as: 'WE F1X' and 'DRA1N' and reportedly providing services to some of the rich and famous within London postcodes. Now, it has become embroiled as one of the key cases alongside the likes of Uber and Deliveroo on 'worker' status within what has become known as the 'Gig Economy, which we will all be familiar with.
Under English law, employment status is split into three categories: employee, worker and self-employed. Status acts as a sliding scale, with those who enjoy full employment status gaining the most legal protection and rights and those who are classed as self-employed with little, if any, protection.
Worker status was introduced to reflect the view that whilst some individuals may not be full-blown employees, they should still receive legal protection. A worker is defined under section 230(3) Employment Rights Act 1996 (ERA) as:
'An individual who entered into or works under:
(a) Contract of employment; or
(b) Any other contract [..] whereby the individual undertakes to do or perform personally any work or services [..] whose status is not by virtue of the contract that of a client or customer [..]'.
A worker is entitled to a number of employment law rights, for example: the right to be paid the National Minimum Wage, paid annual leave, the right to pension contributions and protection under the Working Time Regulations.
The definition set out in section 230(3) ERA is not particularly prescriptive and there have been a number of cases in the past few years that have attempted to clarify worker status and the impact of how people now prefer to work in the modern world seeks to blur the picture further.
How did we get here?
In 2011, Mr Smith who was a heating and plumbing engineer for Pimlico Plumbers was dismissed from his position having suffered a heart attack. He issued several claims in the Employment Tribunal against Pimlico including disability discrimination. The determination of employment status was an immediate issue as whether Mr Smith could bring his claims, was dependent on what his status was. The Tribunal held that Mr Smith was a worker, but Pimlico appealed this decision. Both the Employment Appeal Tribunal and Court of Appeal dismissed Pimlico's appeal and agreed with the Tribunal's conclusion that Mr Smith was a worker.Pimlico further appealed to the Supreme Court and it is this decision that has now been handed down.
It is interesting to note that in the Judgment of the Supreme Court that it was highlighted that Pimlico had 'choreographed' to present one impression to the public using their services that the plumbers were integrated and part of its workforce, yet try to render them as being self-employed on the face of the contractual documentation. This was then set against the degree of control that Pimlico sought to exercise over the plumbers.
The Supreme Court agreed with the Tribunal that Mr Smith was a worker. To reach this decision, the Court considered whether Mr Smith performed the work 'personally' and whether it could be said that Pimlico were a 'client or customer' of Mr Smith.
The Supreme Court found that Mr Smith was required to perform work personally for Pimlico Plumbers, for his only right to substitution was to find another Pimlico Plumber operative for example if he wanted to undertake another job which was going to pay more. The Supreme Court noted that this suggested that Pimlico was not just interested in the work being done, but they were also concerned with who carried out the work. They held that as such, the limited right of substitution was not inconsistent with an obligation to perform services personally. There is no one test on the question, which is essentially a factual question, but the Supreme Court here appear to have focused on what is the final result and here the right to substitute was qualified.
Client or Customer?
Pimlico Plumbers tried to argue that the following factors suggested that they were a 'client or customer' of Mr Smith:
- He was entitled to reject any offer of work.
- He was free to take outside work.
- They had no right to supervise or interfere with how he performed his work.
- He bore a financial risk. He was not paid by Pimlico until the client paid them, and if the client had not paid Pimlico within 6 months, Mr Smith would receive nothing.
The Supreme Court balanced the above factors against features of Mr Smith's contract with Pimlico that they believed 'strongly militated' against recognition of Pimlico as a 'client or customer' of Mr Smith. These factors were as follows:
- He was required to wear a uniform.
- He drove a Pimlico branded van, to which a tracker was applied.
- He had to closely follow the administrative instructions of Pimlico's control room.
The Supreme Court concluded that the latter factors meant that the Tribunal had been entitled to conclude that Pimlico was not a client or customer of Mr Smith and Mr Smith was a worker. This suggests that where a company requires an individual to wear a uniform and adopt their brand, it will be hard for the company to then argue that they are a client or customer of the individual. As the courts will view these factors as strong indications of worker status.
Impact on discrimination claim
One of the claims Mr Smith sought to bring against Pimlico Plumbers was disability discrimination. To be entitled to bring a claim for disability discrimination, Mr Smith needed to be classed as a protected person within the Equality Act 2010 (EA). There are several categories of protected persons within the EA and Mr Smith sought to rely on section 83(2) EA that he had 'a contract personally to do work' and therefore because the Supreme Court upheld the finding that he was a worker his claim for discrimination can now proceed to be considered by a Tribunal.
What does this mean?
Many of the cases (including this one) arising out of the 'Gig Economy' have pointed to worker status and Charlie Mullins, the owner of Pimlico Plumbers has warned other companies such as Uber to brace for a 'tsunami of claims'. However, it is important that we do not just assume that all individuals within the 'Gig Economy' will be classed as workers. For example, the recent case of Deliveroo held that the individuals involved were self-employed contractors, for in this case there was an almost unfettered ability to substitute.
The Government has now provided their response to the Taylor Review, which was a review designed to look at how employment practices need to change in order to keep pace with modern business models. Within the response they have suggested that clarification upon the employment status test should be made in legislation. They have also suggested that there should be a presumption of worker status for non-employees. However, until and if such changes are made it may be that Pimlico Plumbers is just another case in (if Charlie Mullins is correct) a 'tsunami of cases'.
This article is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice. With thanks to Lauren Bhole for contributing to this article. For further infomation please do not hesitate to contact the team.