The Court of Appeal has handed down its decision in the case of Pimlico Plumbers Ltd & Anor v Smith.

The Court of Appeal has handed down its decision in the case of Pimlico Plumbers Ltd & Anor v Smith, in which Pimlico Plumbers (PP) was appealing against the decisions of both the employment tribunal and the EAT that Mr Smith was a ‘worker’ rather than being self-employed.

Pimlico Plumbers Limited and Anor v Gary Smith, Court of Appeal

Facts

S worked solely for PP for a period of almost six years. He signed a “Self-employed Operative” agreement with PP in 2009, which contained detailed provisions relating to the performance of the services by S. It provided that he would comply with all reasonable rules and policies of the company, including those contained in the company manual. The manual set out a requirement to work a normal week of 40 hours. S was required to wear a PP uniform and had to drive a van leased from PP, although he provided his own tools and professional indemnity insurance.

The agreement also contained no less than eight covenants restricting his business activities after the agreement was terminated, most of which were expressed as lasting for a period of 12 months post-termination. The agreement did not include any express, unfettered right for S to send a substitute in his place.

Following a heart attack, PP terminated the agreement with S. He brought a number of claims that depended upon him establishing that he was in fact an employee of PP, including for unfair and wrongful dismissal. He also brought claims for unlawful deductions, unpaid holiday pay and disability discrimination, for which he needed to be a ‘worker’.

Both the employment tribunal and the EAT determined that S satisfied the criteria for establishing worker status, although not employee status.

Court of Appeal decision

The Court has dismissed PP’s appeal and confirmed that S was correctly categorised as having ‘worker’ status.

The Court was satisfied that the arrangement between the parties was based on a requirement for ‘personal performance’ of the services by S, meeting the test to establish worker status. The degree of control exercised by PP over S was inconsistent with PP being a customer or client of S, which would otherwise have defeated his claim.

Consequences

This decision by the Court of Appeal provides us with useful guidance, if not establishing any new legal principles, on the question of worker status following several recent tribunal decisions on the issue and against the background of a number of ongoing reviews and inquiries into worker and employment status.

The decision emphasises once again the close scrutiny that tribunals and courts will apply to the contractual documentation entered into by the parties, as well as examining the reality of the working arrangement. In this case, Pimlico Plumbers was somewhat hampered in its argument that the individual was self-employed by some rather onerous contractual restrictions.

The case also reminds us that an individual who is categorised as self-employed for tax purposes will not necessarily fit neatly into the same category for the purpose of establishing an entitlement to the statutory protections enjoyed by workers.

The content of this article is for general information only. For further information regarding ‘workers’ or those that are self-employed, please contact a member of Birketts’ Employment Team. Law covered as at February 2017.