A plumber has won a landmark legal case for working rights in a Supreme Court ruling set to have wide spread implications for workers engaged on self-employed contracts.
Gary Smith was classed as self-employed for tax purposes, however, the Supreme Court upheld a decision from the Court of Appeal to class him as a ‘worker’ instead. This will entitle Smith to the appropriate rights such as sick pay and holiday pay.
Smith had worked solely at Pimlico Plumbers for six years on a self-employed contract. After suffering a heart attack, Smith asked to reduce his hours from working five days a week to three, however his request was denied and he was later dismissed.
In making a decision in this case, the Supreme Court focused on the fact that Gary Smith was contractually obliged to work a minimum number of hours per week and that he was not permitted to send in a subordinate as a substitute. These factors combined with the lack of control Smith had over his work lead the Court of Appeal to rule Smith as a worker.
Pimlico Plumbers chief executive, Charlie Mullins declared that he is “disgusted” by the ruling. He has warned other organisations, using self-employed contractors, that they may face a “tsunami of claims” because of this ruling.
Mullins added that this was not a victory for poorly paid workers, but rather an “exploitation” by a “highly-paid, highly-skilled man who used a loophole in current employment law to set himself up for a double pay-day”.
He also called out the judges by stating they had “the opportunity to drag our outdated employment law into the 21st Century, but instead they bottled the decision, and as a result thousands of companies across the UK, who use contractors in an honest and responsible way, remain exposed to huge potential claims in the future”.
Alan Lewis, Employment partner at law firm Irwin Mitchell, stated “This decision is not necessarily a win for ‘gig economy’ workers seeking to challenge their employment status”.
Lewis also went onto explain that Pimlico Plumbers does “not operate a gig model and the implications for Uber, City Sprint, Deliveroo etc. may be limited, although the publicity around this case may encourage other ‘self-employed’ contractors to challenge their legal status”.
Tim Goodwin of law firm Winckworth Sherwood warned that the ruling might not apply to other complaints. “Even with a high level of decision like this, to a degree the issue of employment status in the gig economy is up in the air”.
“The government is consulting on this issue, and may bring forward legislation. So it’s quite possible that Parliament may overrule this decision within the next few months or years,” Goodwin added.
In February this year, the government promised an overhaul of employment rights to improve conditions for millions of workers, including those in the gig economy. The proposed changes include stricter enforcement of holiday and sick pay rights as well as higher fines for firms that breach contracts or treat staff incorrectly. The government is currently consulting on the proposals.
The government’s overhaul is in response to last year’s Taylor Review into the gig economy, which concluded that all people who work for platform-based companies, such as Deliveroo and Uber should be classified as dependent contractors. The Taylor Review also stated all work in the UK’s economy should be “fair and decent”.
Charlie Mullin was questioned on whether he will now have to rewrite his workers contacts. He responded with “We changed the contracts seven years ago when we found a couple of loopholes in them; we’ve changed that and our contracts now are watertight, like our plumbing service”.
Employment partner at law firm Irwin Mitchell, Alan Lewis, stated: “This decision is not necessarily a win for ‘gig economy’ workers seeking to challenge their employment status”.
Lewis also went onto explain: Pimlico Plumbers does “not operate a gig model and the implications for Uber, City Sprint, Deliveroo etc. may be limited, although the publicity around this case may encourage other ‘self-employed’ contractors to challenge their legal status”.
If you need any support or guidance in employment rights, please contact a member of the HPC team:
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