Author: Lailaa Bettis
The Supreme Court held yesterday morning that a tribunal was entitled to conclude that a plumber was not a self-employed contractor, but a worker (although not an employee).
The key issues were:
- Whether the plumber was obliged to provide his services personally to Pimlico, an important feature of worker status.
- Whether the plumber was a client or customer of Pimlico.
The court held that although the plumber could be substituted by another individual, this was only in very limited circumstances, namely where a more lucrative job became available such that he could arrange for the original work to be carried out by another Pimlico operative. He therefore did not have unfettered discretion to appoint a substitute to provide the services in his place and apart from the limited exception, he was personally required to carry out the work.
Further, it found that certain features of the relationship were at odds with Pimlico being a customer of the plumber, including the fact of Pimlico’s “tight control” over the plumber, given he had to wear the Pimlico uniform and ID badge, drive a Pimlico branded van (which was tracked) and had to conform to Pimlico’s strict payment terms. The contract also contained references to “wages”, “gross misconduct” and “dismissal” and made him subject to various restrictive covenants. This level of subordination was inconsistent with self-employed status. This was despite the fact that the plumber submitted his own tax returns, that he was entitled to reject work offered to him and was free to take outside work by non-Pimlico clients.
This case has not changed the current legal position on worker status, but serves as a useful reminder that courts will look behind any contract to determine the reality of the relationship. The case is fact sensitive but employers will need to continue to be mindful that even if individuals are paying their own tax and have the right to work elsewhere, personal service is still a significant factor. The consequence of a finding of worker status is that the individuals will have entitlements to certain rights such as holiday pay, national minimum wage and rest breaks, which could have huge financial implications for Pimlico Plumbers and other businesses impacted by this decision.