Case study: Is a self-employed contractor entitled to the rights of a worker?

THE recent high-profile case of Pimlico Plumbers v Gary Smith involved whether Mr Smith’s status was classed as a self-employed independent contractor or a worker for the company that would entitle him to basic workers’ rights.

BACKGROUND: Mr Smith worked as a plumber exclusively for Pimlico Plumbers (PP) between 2005 and 2011. The wording of his contract described Mr Smith as a “self-employed operative”.

Mr Smith had to provide his own tools and equipment and he paid tax on a self-employed basis. However, his contract required him to work a minimum of 40 hours per week, wear Pimlico’s uniform (complete with company logo displayed) and use a van leased from Pimlico.

Under the arrangement, Mr Smith could choose which jobs he took on and when he worked as long as he met the minimum hours required.

Mr Smith requested to reduce his hours after suffering a heart attack. PP refused this request and took away his branded van. Mr Smith claimed he was unfairly dismissed and argued he was entitled to basic workers’ rights, including the right to paid holiday and the ability to bring discrimination claims.

PP claimed that plumbers were hired on the basis that they were self-employed and did not have workers’ benefits but were paid significantly more as a result.

OUTCOME: The tribunal held that Mr Smith was not an employee, but that he had the working arrangements of a worker (as defined by the Employment Right Acts 1996) and was therefore entitled to basic workers’ rights such as sick pay, holiday pay and other benefits. The tribunal decision was upheld by the Court of Appeal.

Determining the difference between an employee, worker and someone who is self-employed remains a complex area and it is too early to assess the future implications. However, this is a landmark case for the growing number of self-employed workers in gig economy jobs.