When does a ‘self employed’ person become a worker with protected rights?

09May 2017 by Colin Foote 7377 Comments

In Pimlico Plumbers Ltd v Smith the Court of Appeal has held that a plumber, who was self-employed for tax purposes, as in fact a worker, entitling him to various employment rights.

The Facts of the Case
Mr Smith worked as a plumber for Pimlico Plumbers for six years until 2011. He successfully argued before the Employment Tribunal and the Employment Appeal Tribunal that he was a worker for the purposes of employment legislation. Pimlico maintained that he was a “self-employed operative” – which is how he was described in the agreement between Mr Smith and Pimlico – and appealed to the Court of Appeal.

The Judgement

Whilst Mr Smith had a ‘self employed’ contract and he filed tax returns and paid VAT on this basis, he was considered a worker despite the fact he was allowed to choose and refuse which jobs he worked. On reaching this conclusion the court considered the following facts:-

  • Mr Smith was required to wear a company uniform;
  • Mr Smith used a van leased from the company;
  • The company monitored Mr Smith’s movements via GPS;
  • Mr Smith had to work a minimum number of hours each week;
  • Mr Smith was unable to send a substitute for his work;
  • MR Smith had little control over matters such as cost so as to suggest the clients were clients of the company;
  • The company had onerous restrictions in place which would prevent Mr Smith from carrying out his trade in the local area

As a result of this decision Mr Smith was a worker and therefore entitled to bring Tribunal claims against the company in relation to Disability Discrimination and Unlawful Deduction of Wages.

  • The significance of the decision

The Pimlico decision follows hot on the heels of an Employment Tribunal ruling last month that a cycle courier engaged by CitySprint was a worker and the well-publicised Employment Tribunal decision in 2016 in which Uber taxi drivers were also found to be workers.

While each case will turn on its facts, there appears to be a growing trend whereby businesses may find that individuals they have purported to engage on a self-employed basis are in fact workers for the purposes of employment rights. This is especially so where the business retains a significant degree of control over how the individual works and where there is no right of substitution.

The Pimlico decision is particularly significant because, unlike the Uber and CitySpint decisions, this was a Court of Appeal ruling, which means it is binding on other Courts and Tribunals across England and Wales. It will therefore be a key authority in future cases concerning employment status in Northern Ireland.

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