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How will the Pimlico Plumbers Supreme Court decision change the gig economy?

Posted on June 13, 2018, by Philip Sayers

Will a Supreme Court decision against Pimlico Plumbers change the future of the gig economy? Coodes Solicitors Employment Lawyer Philip Sayers gives his verdict.                                                                                                                                                          

A landmark hearing at the Supreme Court has resulted in a plumber and heating engineer winning his seven-year legal battle for workers’ rights against Pimlico Plumbers.

The case is the first of its kind to be heard by the Supreme Court – the highest court under UK law – since the birth of the so-called gig economy. The Supreme Court confirmed that Gary Smith should be classified as a worker not an independent contractor, as Pimlico Plumbers had contested.

Mr Smith worked solely for Pimlico Plumbers between August 2005 and May 2011. Although his contract described him as an independent contractor, the company manual stated that Mr Smith should work for a minimum of 40 hours a week for the firm as well as driving a company van and wearing a branded uniform.

A seven-year legal battle resulting in a landmark gig economy decision

When Pimlico Plumbers terminated Mr Smith’s contract in 2011, he took them to tribunal claiming they owed him holiday pay and unlawful deductions from wages, as well as disability discrimination. The judge held that the arrangement between Pimlico Plumbers and Mr Smith meant he was indeed a worker, not an independent contractor, and should therefore be entitled to workers’ rights. A legal battle followed, with Pimlico Plumbers fighting the courts’ decisions every step of the way. Now that the Supreme Court has dismissed the company’s appeal, it will be interesting to see what legislative changes result from the outcome.

What is the gig economy?

An estimated 1.1 million people in the UK work in the ‘gig economy’. This is a flexible, piecework approach to employment, which has proved increasingly controversial over recent years.

Unlike traditional employment, people are paid for the work they do rather than the hours they put in. They have no guaranteed hours and are not entitled to employment benefits, such as sick pay. Supporters argue the gig economy offers flexibility to both businesses and workers, while its critics claim it leaves people open to exploitation.

In addition to Pimlico Plumbers, firms like Uber, Deliveroo and Addison Lee have come under fire for not giving their workers basic rights. The debate centres around the fact that gig economy workers tend to be classified by businesses as being freelance or contractors, whereas many have successfully argued they are entitled to workers’ rights.

What is a ‘worker’ in UK law?

A worker is not the same as an employee, but does bring about more rights than being freelance. There are a number of criteria that mean someone should be treated as a worker rather than an employee. In the case of Mr Smith and Pimlico Plumbers, a key factor in the Supreme Court’s decision was the fact he was obliged to make himself continually available for work. The decision also rested on the fact that Mr Smith had to wear a branded uniform, drive a branded van and carry a Pimlico Plumbers identity card. In addition, in the contractual arrangements there were references to ‘wages’, ‘gross misconduct’ and ‘dismissal’, which were not in keeping with freelance arrangements. Mr Smith is also able to pursue a claim for disability discrimination because, while he is not an employee for the purposes of bringing an unfair dismissal claim, the definition of ‘employee’ contained in discrimination legislation is an easier one to meet than usual and means that workers can generally bring discrimination claims.

What is the significance of the Pimlico Plumbers case?

The court’s decision is in line with the outcome of similar cases, heard in employment tribunals over recent months and years. The fact that this is a Supreme Court decision is what makes the outcome of this case significant. Now that the highest court has ruled that a gig economy worker should be given workers’ rights, it is likely that the current direction being taken by employment tribunals will continue.

For more information on this or any Employment enquiries contact Philip Sayers, Employment and HR team, Coodes Solicitors on 01872 246200 or philip.sayers@coodes.co.uk