In the latest in a long line of worker status claims, the Supreme Court has upheld a Tribunal's decision that a plumber, who was described in his contract as an "independent contractor" and who paid VAT and tax as a self employed contractor, was in fact a worker.
This classification now entitles him to a number of legal rights including holiday and sick pay. He was also found to be "in employment" for the purpose of being able to bring a disability discrimination claim under the Equality Act.
Although the case is fact specific and there are no new guiding principles to take away from it, the analysis will be of potential interest to businesses with similar models. Whilst not strictly speaking a gig economy model, it may be of interest to those operating in that space. However, in practice, the impact may be limited and it should be noted that the gig economy and issue of employment status is currently subject to government consultations following the Taylor Review. Consequently future legislation and policy changes may create waves in this area further down the line (for more information see Charlotte Mortlock' s article on the Government's response to the Taylor Review: A good work plan).
Some of the key points to note from the facts in this case though are considered below. A more detailed case analysis will also follow in our employment law bulletin at the end of the month.
For Mr Smith to qualify as a worker, the Supreme Court had to agree that he had undertaken to personally perform work for Pimlico Plumbers and that the company was neither his client nor his customer. Under his contract, if Mr Smith could not perform the work he could only swap with another Pimlico Plumber. As this was not an unfettered right of substitution it was consistent with worker status. When weighing up other factors, it was noted that he could reject work and he did have some financial risk which could be consistent with self employed status. However, there were a number of other factors that pointed to worker status such as the fact he wore a uniform, drove a branded van and that the company controlled his administrative duties and the management of payments. There were also references to "dismissal" in documentation and a number of restrictive covenants if the contract was terminated which is more consistent with a worker and not a client. The fact that he was in a relationship of subordination to the company was also a key factor in determining that Pimlico plumbers were not his client and he was in fact their worker.