Authors: Matthew Smith and Debra Gers
The recent judgment of the Supreme Court in Pimlico Plumbers Ltd v Smith is undoubtedly the most significant decision of the recent employment status cases which impact in particular the so-called "gig economy".
Almost seven years after bringing his Employment Tribunal claim, the highest Court in the country has now upheld the earlier decisions of the Employment Tribunal, the Employment Appeal Tribunal and Court of Appeal that Gary Smith was a "worker" and not "self-employed" and, as a result, had the right to the national minimum wage and paid holiday.
The case is now the leading authority on how to determine employment status, which is of particular significance to those working in the gig economy. The case will have significant cost implications for organisations in a number of sectors where people have been treated as contractors rather than workers but the decision will be welcomed by many thousands of people who have been missing out on key employment rights because they are classed as self-employed when, in reality, they are workers or employees. That said, the question of whether any given individual is an employee, a worker or self-employed will always depend on the particular circumstances and the facts of each case.
What was the background to the case?
Mr Smith was engaged as an independent contractor by Pimlico Plumbers between August 2005 and April 2011 and signed two agreements to that effect. He was registered for VAT and filed tax returns on the basis that he was self-employed. He wore the company uniform with a logo, drove a Pimlico Plumbers van and had to give notice about taking annual leave. He was expected to work a minimum of 40 hours a week. There were detailed requirements in relation to timesheets, purchasing procedures and invoicing. Following a heart attack in January 2011, Mr Smith wanted to reduce his working days but Pimlico Plumbers ended the agreement in May 2011.
