Yesterday the long-awaited decision for Gary Smith against Pimlico Plumbers was given when five Supreme Court justices ruled that he was a worker rather than self-employed.
Mr Smith was a highly paid self-employed plumber, earning six figures and had worked for Pimlico for just over five years. However, after having a heart attack he requested his days be cut from five a week to three. Pimlico declined the request, and because they considered him not to be an employee they took back his company logoed van.
A claim followed, and in April 2012 the Employment Tribunal ruled that he was a worker even though Mr 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, so in reality was no different to someone arranging another employee to do a shift swap for them.
In addition, the tribunal found that 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.
An appeal followed, and the case continued to both the Employment Appeal Tribunal and the Court of Appeal, but the decision remained – he was a worker.
Many are now calling for clear regulation to aid the confusion over the worker status and gig economy employment. Companies need to understand when someone can be considered self-employed for employment law purposes, as often the tests are not identical as they may be for HMRC’s purposes.
Remember, although your contracts may be watertight the courts always look at the reality of the relationship - not just the words.
Toni is the founder of CompleteHR Ltd, and is the company's lead consultant and trainer. She specialises in the broad area of management development training including the skills of people management and HR .