Europe & UK

June 15, 2018

UK Supreme Court rules against Pimlico Plumbers in landmark gig economy case


garysmith

In a landmark case, running since 2011, for the gig economy, the UK Supreme Court ruled that a plumber, classed as “self-employed”, who brought a case against his former employer was in fact a “worker” and should therefore be entitled to a national minimum wage, holiday pay, and protection from discrimination, among other basic workers’ rights.

This decision has the potential to impact the rights of several people classified as independent contractors across the UK, including those at gig economy firms, and was thus described as a landmark ruling. Gary Smith, a plumber from Kent who worked for Pimlico Plumbers — London's largest independent plumbing company — between August 2005 and April 2011, suffered a heart attack in January 2011 and later sought to work three days per week instead of five, as he had done previously.

However, Pimlico Plumbers refused to grant Gary’s request and took away his branded van, which he had hired from the company. Gary had thus claimed that he was unfairly dismissed in May 2011.

The Supreme Court upheld the Court of Appeal’s previous ruling that Gary could be described by a “worker” despite signing an agreement with the company describing himself as “self-employed” and filing tax returns to this effect.

According to the Supreme Court, although Gary paid self-employed tax and was VAT registered, he was still a “worker”.

Notably, this is the latest case in a long line of legal challenges on employment status. Though the decision was positive for Smith, several employers and legal experts had hoped that the case might set out greater clarity over how to determine employment status.

Susannah Kintish—Employment Partner at Mishcon de Reya, a British law firm—has led the case for Pimlico Plumbers since 2011.

According to Susannah, “This judgment does not lay down any new principles of law around worker status. Instead, all eyes will be on the Government as businesses await legislation on how to categorize their workforce – something that could still be a matter of years away. In the meantime, the gig economy continues to evolve and existing employment law is rendered increasingly unfit for purpose.”

Stating that the Supreme Court had made it clear that the judgment rested heavily on the unique facts of this case, rather than setting out any new legal principles for employers, Susannah said, “It will therefore do little to stem the flow of litigation around worker status which, in the absence of any overarching principles, will need to be determined on the specific circumstances of each case.”

Susannah then said, “Individuals operating in the gig economy need certainty that they have been categorized correctly, and businesses are equally keen to get this right from the outset, recognizing that doing so is in their own interests.

She further added that “Balancing a flexible workforce with the control required to protect a brand will continue to present a significant challenge for businesses, with many likely to be disappointed that this judgment does not plug any legislative gaps.”

According to Charlie Mullins, Founder of Pimlico Plumbers, “This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get a nasty surprise from a former contractor demanding more money, despite having been paid in full years ago.”

Charlie then said, “For those who think this is a victory for poorly paid workers everywhere, against large corporations who exploit their lack of bargaining power, think again. In fact, this was exploitation – but instead by a highly paid, highly skilled man who used a loophole in current employment law to set himself up for a double payday.”

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