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Genuinely Self-Employed or Worker? Another Court Decision on the Gig Economy

In Pimlico Plumbers and Charlie Mullins v Gary Smith [2017] EWCA Civ 51 (10 February 2017) the Court of Appeal upheld an Employment Tribunal decision that a plumber was a worker, rather than self-employed, thereby entitling him to pursue disability discrimination claims and claims for holiday pay and unauthorised deduction from wages.

Mr Smith carried out plumbing work for Pimlico Plumbers (‘PP’) for a number of years. Following a heart attack, he claimed that he had been unfairly dismissed and wrongfully dismissed and was owed pay during medical suspension, holiday pay and arrears of pay.  Ms Smith also claimed he had been directly discriminated against on the grounds of disability and there had been a failure to make reasonable adjustments. 

A preliminary hearing was listed to determine whether: (i) Mr Smith was an employee of Pimlico Plumbers under a contract of service; (ii) he was a worker within the meaning of Section 230(3) Employment Rights Act 1996 (‘ERA’); (iii) his working situation fell under the definition of employment in Section 83(2)(a) Equality Act (‘EqA’), or (iv) he was genuinely self-employed.

Mr Smith’s contract with PP referred to him as a ‘Self-Employed Operative’.  On the facts of the case Mr Smith worked solely for PP.  He was required to work a minimum numbers of hours per week, but could reject particular jobs and decide on his own working hours. He was required to wear the PP uniform and van with the company’s logo.  Mr Smith worked unsupervised and was able to decide when he would do the job.  Mr Smith believed himself to be self-employed, used the services of an accountant, was VAT-registered and filed his tax returns on the basis that he was self-employed.  He covered substantial costs of materials and provided his own protective clothing. 

The Employment Tribunal (‘ET’) concluded that Mr Smith was not an employee, finding among other matters that there was no legal obligation on the part of PP to provide work, but held that he was a worker within the meaning of Section 230(3) ERA and his situation met the definition of employment under Section 83(2)(a) EqA, giving the ET jurisdiction to consider Mr Smith’s discrimination claims and other claims.  The EAT agreed. 

The Court of Appeal dismissed the company’s appeal.  In a careful analysis of the contract between Mr Smith and PP, the Court of Appeal agreed with the ET that Mr Smith was contracted to provide his services personally within the meaning of Section 230(3) ERA and, for the purposes of Section 83(2)(a) EqA, worked under a contract personally to do the work.  The Court held that Mr Smith’s contract contained no right, whether express or implied, of substitution or delegation.  Further, the ET had been correct to look at the contractual relationship as a whole and was entitled to conclude that, rather than PP being a client or customer of Mr Smith, Mr Smith was an ‘integral part of PP’s operations and subordinate to PP’.

Following on from the ET decisions in Aslam and others v Uber BV and others [2017] IRLR 4 ET and Dewhurst v CitySprint UK Ltd ET/2202512/2016, this is the first Court of Appeal decision dealing with employment status in the gig economy and likely to be an important authority for subsequent cases. 

Barbara Zeitler / 17th Feb 2017


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