Plumber Wins Workers’ Rights Battle: Recognised as an Employee

A plumber who took legal action against his former employer is to be recognised as an employee with full workers’ rights in his case, the Supreme Court has ruled.

The ruling tips the balance in favour of workers in the ongoing debate about gig economy employment rights, and has been termed “one of the most significant employment status decisions in the past five years” by lawyers.

Gary Smith, a plumber who had worked with Pimlico Plumbers for six years, was found to be a ‘worker’ under the terms of the 1996 Employment Rights Act, and is thereby entitled to benefits such as sick pay and holiday leave not owed to a self-employed contractor.

The decision is particularly notable, as Smith paid taxes as a self-employed person and was described in his employment contract with the company as a “self-employed operative.”

Trade union leaders have celebrated the win as a landmark victory in the fight for gig economy workers to be recognised as employees and given workers’ rights.

Pimlico Plumbers CEO Charlie Mullins however termed the ruling “a poor decision that will potentially leave thousands of companies, employing millions of contractors” vulnerable to a “tsunami of claims.”

Legislation needed to clarify ruling’s implications for gig economy

Under the Employment Rights Act, workers are afforded statutory rights including pay at the national minimum wage, sick pay, parental leave and protections regarding proper dismissal and redundancy protocol, as well as the right to ask for more flexible working hours.

However, self-employed persons contracted to work for a company do not receive the same protections.

This case suggests that judges will take a broader view of a worker’s contracted position in determining whether they are self-employed or not, meaning that employers may be forced at trial to recognise contractors who are nominally self-employed as company employees instead.

The court recognised that Smith’s arrangement included “elements of operational and financial independence,” akin to self-employment, but noted that the plumber’s “services to the company’s customers were marketed through the company,” suggesting that Smith was an employee.

Further, Smith was a ‘worker’ as his employment contract “enabled [Pimlico Plumbers] to exercise tight administrative control over [Smith] during his periods of work” and set out a regimented pay schedule, referring to the plumber’s earnings as “wages.”

The contract also restricted Smith’s ability to compete with the company for plumbing work following any termination of their relationship.

Commentators have noted that the judges “made it clear that this judgment is very specific to the unique facts of the case,” and may not have a wider effect on future cases until legislative reform clarifies the legal position of gig economy workers.

Until then, using the courts to ascertain employment rights remains a long and prohibitively expensive process for many gig economy workers.

One lawyer noted that in light of the decision: “Employers may tweak their contracts, but they will not feel they need to alter the reality of their practices” until the government takes a clearer stance on the matter.

The Taylor Review of Modern Working Practices published in 2017 made government recommendations to modernise the status definition of a worker, with an online tool to determine a person’s employment status, as well as boosting the national minimum wage and giving workers increased rights and flexibility.

The government however has not yet acted on the recommendations or a draft bill that followed, responding instead by undertaking further, in-depth consultations – with one specifically investigating employment status in the modern workforce.

Further cases tip balance in favour of workers

Court rulings and settlements following the Pimlico Plumbers case regarding gig economy couriers for Hermes and Deliveroo have however already lent some consistency to the case’s application, with the courts finding in the Hermes case that workers were in fact employees rather than self-employed contractors.

Hermes’ ruling in favour of 65 workers, will apply to all 14,500 of its couriers working under the same contract, who will now be entitled to the national minimum wage and paid holiday.

Meanwhile, Deliveroo has reached an undisclosed settlement to pay 50 of its riders for denying them the same ‘worker’ rights. As they settled out of court however and the company has said that the decision to settle will not affect their wider business model.

Employment law experts for employees

If you feel that you may be a victim of unfair treatment, equal pay claims, harassment or victimisation, you could be entitled to compensation. Contact IBB’s employment solicitors today for expert advice. Call us today on 03456 381381 or email employment@ibblaw.co.uk.