The gig economy: contractor or contracted?

The Supreme Court recently considered whether a plumber was a self-employed contractor or an employee of the company for whom he worked in the case of Pimlico Plumbers v Smith.

Mr Smith worked for Pimlico Plumbers Ltd between 2005 and 2011 under two written agreements.  When they parted ways, he made various claims against the company, including one of unfair dismissal.

The employment tribunal decided that, although Mr Smith was not an ‘employee’ under a contract of employment (and therefore that he was not entitled to complain of unfair dismissal),  he was a ‘worker’ for the purposed of of the Working Time Regulations 1998 and that he had been in the ‘employment’ of Pimlico for the purposed of Equality Act 2010. 

This allowed Mr Smith to proceed with claims for: unlawful deduction from his wages; holiday pay and disability discrimination.   

Pimlico appealed this decision to the Employment Appeal Tribunal and then the Court of Appeal, but were unsuccessful. They consequently appealed to the Supreme Court.  

The Supreme Court unanimously dismisses the appeal and held that the employment tribunal was entitled to conclude that Mr Smith qualified as a ‘worker’ under the Employment Rights Act 1996 (and by analogy the relevant provisions of the Working Time Regulations 1998 and the Equality Act 2010), and that his substantive claims can proceed to be heard. 

Just because you describe someone as self-employed, it doesn’t necessarily make it so. Where, for example, a company asserts significant control over how, when and where an individual works – as well as whether there is right of substitution, that is, if an alternative individual can be sent to do the job – may be relevant considerations.  

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