The legal status of workers in the so-called ‘gig’ economy has now received the scrutiny of the Court of Appeal, in Pimlico Plumbers Ltd and Mullins v Smith  EWCA Civ 51.
This has been a highly controversial issue for some time now, with much-commented-upon disputes involving Uber, Airbnb, Citysprint and others. These were considered at first instance, in the Employment Tribunal, or not adjudicated upon at all, and at a time when the future of rights currently arising from European regulation is uncertain.
These various organisations have consistently argued that they do not enter into employment contracts but that each ‘worker’ in fact runs his/her own business and is an independent contractor. It follows that they do not attract the rights and benefits of an employee (under domestic legislation) or the broader rights afforded workers (under European Regulations).
Gary Smith is a plumber; one of 125 or so who work (or worked) from Pimlico Plumbers’ blue vans and in their uniform, with a mobile phone issued by that company. Unfortunately Mr Smith suffered a heart attack in January 2011, and his services were dispensed with four months later.
Mr Smith issued claims to be compensated for unfair and wrongful dismissal, arrears of pay during medical suspension, holiday pay and arrears generally. He also claimed to have been discriminated against whilst subject to a disability and that Pimlico Plumbers had failed to make reasonable adjustments to accommodate his condition. These remedies variously required him to be defined as an employee or as a worker. The ambiguity of his position was highlighted by the fact that his agreement with Pimlico Plumbers described him as a ‘sub contracted employee’.
The Employment Tribunal had found in Mr Smith’s favour, in a preliminary decision which was upheld by the Employment Appeals Tribunal. It decided that he was a worker within the meaning of s.230(3)(b) of the Employment Rights Act 1996 and Reg.2(1) of the Working Time Regulations 1998 and that his position was within the definition of "employment" in section 83(2)(a) of the Equality Act 2010.
At a pre-hearing review, deciding that Mr Smith was an employee, the ET had noted:
Mr Smith’s relationship with Pimlico Plumbers was governed by a ‘Procedures & Working Practices’ handbook which compelled him to work a normal week of 40 hours, whether or not that was in fact enforced, though he was free to choose which hours he worked, whether to take a particular job and, if so, at what time he would go home. Underhill LJ said that the issue of minimum hours was a separate issue to that of personal performance and not to be confused with it. Whether he did 40 hours or fewer, Mr Smith had been obliged to ‘provide work’.
Reviewing the facts found at first instance, Sir Terence Etherton MR noted that the ET “rightly stood back and asked and answered ... the over-arching question whether the better conclusion was that PP was a client or customer of Mr Smith’s business or rather PP should be ‘regarded as a principal and Mr Smith was an integral part of PP’s operations and subordinate to [PP]”. It had concluded the latter, which (the MR found) was no error of law nor beyond what was judicially permissible.
It followed that Mr Smith was found to have been a worker within the meaning of s.230(3) of the Employment Rights Act 1996 Reg.2(1) of the Working Time Regulations 1998 and that he was an employee within the meaning of s.83(2)(a) of the Equality Act 2010 (for the purpose of his claim of disability discrimination). Pimlico Plumbers were therefore unsuccessful in this second appeal, as they had been before the EAT.
Mindful that the Court was making a decision on a matter of general importance, Etherton MR set out certain principles for establishing the presence of ‘personal performance’:
On a side note, the court took the opportunity to criticise the procedure adopted in the ET, which had dealt with closing submissions entirely in writing. The MR felt that this procedure “does not give the ET the opportunity to question and test the case of each side in the light of the evidence and to clarify submissions which are or appear to be inconsistent or unclear”.
Graeme Kirk / 14th Feb 2017
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