Jun 29

Worker status or self-employed…….employers need to take care after this ruling from the UK Supreme Court.

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The Supreme Court has ruled that a plumber classed as self-employed was in fact a worker, in a landmark case for the gig economy.

The UK’s highest court upheld the decision that a plumber who worked for Pimlico Plumbers for six years was a worker, not self-employed. Despite paying self-employed tax and being VAT registered, Mr Smith was a worker, the Supreme Court said.

Worker status means entitlement to a national minimum wage, holiday pay and protection from discrimination.

The decision has the potential to impact the rights of many people classified as independent contractors across the UK. The company argued that Mr Smith had freedoms, such as the option to substitute someone else to carry out his work, if he wished.

But the Supreme Court held the following factors pointed to Mr Smith being a worker rather than self-employed:
• The dominant feature of Mr Smith’s contract was that he must do the work himself.
• The company exercised tight administrative control over Mr Smith and he undertook to do the work personally.
• The company required Mr Smith to wear a company branded uniform.
• The company required Mr Smith to also lease one of its vans, which displayed the company’s logo and was equipped with a GPS tracker.
• Mr Smith also had to work a minimum number of hours per week.
• Mr Smith’s services to the company’s customers were marketed through the company.
• Mr Smith’s ability to compete with the company for plumbing work following any termination of their relationship was restricted.
• The company controlled when and how much Mr Smith was paid.

The Supreme Court held that the company could not be regarded as a client or customer of Mr Smith. It was clearly his employer.

This decision will set a powerful precedent for organisations in determining how they construct and operate their contracts. The court did make it clear that this decision turned on the unique facts of this case, but employers need to take note that tribunals will be willing to look behind what on the surface appears to be a self-employed relationship in order to uphold worker rights where the circumstances dictate such status.