Demands for clearer gig economy laws intensified this morning after five Supreme Court justices ruled that a former Pimlico Plumbers engineer was a worker rather than self-employed.
Gary Smith worked for the London-based company from August 2005 until April 2011. After suffering a heart attack, Smith asked for his working hours to be cut from five days a week to three. Pimlico declined his request and took away his company-branded van.
In April 2012, an employment tribunal decided that, although Smith was not an employee, he was a worker.
Pimlico appealed to both the Employment Appeal Tribunal and the Court of Appeal. Both appeals were dismissed.
Welcoming the decision, the TUC called on the government to bring in better regulation to end the “Wild West” gig economy.
“People shouldn't have to go to court to get a fair deal at work,” said TUC general secretary Frances O’Grady. “Companies that treat their staff like disposable labour must be brought to book.”
Simon McVicker, director of policy at IPSE, which represents freelancers and other self-employed people, added: “The best way to address this legal uncertainty is to write into a law a positive definition of what constitutes self-employment. This would send a clear signal about who is and who isn’t self-employed, and would mean that people wouldn’t have to go all the way to the Supreme Court to get a resolution.”
However, James Murray, employment associate at Kingsley Napley, questioned whether the decision would prompt any political action.
“Employers may tweak their contracts but they will not feel they need to alter the reality of their practices considering the government has said it is not willing to move forward with […] Matthew Taylor’s more game-changing proposals; for example, reversing the burden of proof in favour of workers,” Murray said. “Parliament is also preoccupied with Brexit for the foreseeable future.”
The government-commissioned Taylor review, which was published last July, contained a number of proposals for the gig economy among its 53 recommendations. The government responded to the review in February and is currently running a series of consultations on the issues raised.
As the Supreme Court’s decision is binding on the courts below it, the judgment was likely closely watched by the likes of Uber and Deliveroo, both of which are currently facing their own legal battles over worker status.
Lord Wilson’s Supreme Court judgment, with which Lady Hale, Lord Hughes, Lady Black and Lord Lloyd-Jones agreed, noted that, although Smith could nominate another plumber to take on a job for him, this power of substitution was limited in scope as it had to be a plumber under contract with Pimlico.
In handing down the judgment, Wilson also said Pimlico had a large degree of control over Smith’s “appearance and the cleanliness of his uniform” and his ability to compete with the company when he ceased to carry out jobs for it.
“While the legal provisions examined in this case have been in place for many years, recent cases have changed our understanding of how they should be interpreted and organisations will need to exercise caution in the arrangement they agree, and then follow in practice, with those they wish to engage as genuinely independent contractors,” said Andrew Willis, head of legal at CIPD HR-inform.
In a blog on the company’s website, Pimlico founder Charlie Mullins wrote that the decision was a “missed opportunity” to align employment status law with modern working practices.
He also claimed that today’s case was not one about “exploitation” but “about a highly skilled, self-employed plumber, who was earning a six-figure salary, wanting to have his cake and eat it”.