HR · 13 June 2018

“One of the biggest decisions ever made on workers’ rights”: Self-employed give verdict on Pimlico Plumbers ruling

Pimlico Plumbers
The employment tribunal decided Gary Smith was entitled to basic workers’ rights

The Supreme Court has today ruled that a “self-employed” man working for Pimlico Plumbers was employed as a worker and not an external contractor. The case represents a significant moment for Britain’s gig economy, and could shape the future relationship between such firms and their workforce.

Pimlico Plumber’s appeal was rejected by the tribunal, which ruled Gary Smith’s working conditions reflected that of a full-time employee, not a self-employed contractor.

Following the ruling, trade groups representing the self-employed have urged policy makers to provide workers and businesses with greater clarity, while legal professionals have expressed the scale of the ruling and what it means for workplace rights.

“The government doesn’t appear to support the idea of writing a positive definition into law.”

Simon McVicker, director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), welcomed the “certainty” provided by the ruling, but called on the government to legistlate a clearer definition of self-employment to avoid future cases.

“We do not think businesses should be able to use the uncertainty about the legal definition of self-employment to declare that their workforce should all be contractors,” McVicker said.

“The best way to address this legal uncertainty is to write into a law a positive definition of what constitutes self-employment. This would send a clear signal about who is and who isn’t self-employed, and would mean that people wouldn’t have to go all the way to the Supreme Court to get a resolution.

“Disappointingly, the government doesn’t appear to support the idea of writing a positive definition into law, but this case demonstrates just how useful a positive definition would be.

“We should also be careful not to conflate the circumstances of this case with all instances of self-employment. In fact, the reality is that the vast majority of self-employed engagements are what they claim to be: genuine business-to-business engagements which are mutually beneficial to both parties.”

“Self-employed workers are driving the economy right now.”

Julia Kermode, chief executive of The Freelancer & Contractor Services Association (FCSA), said today’s ruling was a “landmark result” that would send a signal to firms engaging with self-employed workers.

“Employment status is complex, and this case illustrates the need to retain three tiers of employment status as Gary Smith was neither employed nor self-employed,” Kermode said.

“He was required to work at least 40 hours per week, was required to wear a Pimlico Plumbers uniform and drive a branded van. He also had to ask permission to take time off. He was clearly a worker, and not self-employed, despite the intention of Pimlico Plumbers.

“[Self-employed workers] are driving the economy right now so let’s support them not punish them. This case is set to change the employment landscape forever.”

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Matthew Taylor

Author of the Taylor review on future of self-employment in Britain

Business Advice sat down with Matthew Taylor, author of the government-commissioned Taylor review, to gain an insight into the report and find out how the future of self-employment could look in Britain.

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“Today’s ruling should hopefully set considerable precedence.”

Dave Chaplin, CEO and founder of contracting authority ContractorCalculator, said the Supreme Court ruling was a “victory for Good Work”, which could set considerable precendence.

 The extra cost of paying these rights to workers will be passed onto the client, but that’s something I support, because people should have Good Work and not be exploited.  Pimlico plumbers hired ‘self-employed’ people and put them in branded vehicles, branded clothing, and has expected them to adhere to policies and processes for their company.

“They should be entitled to their rights, regardless of how much they earned. Hopefully we will see a wave of other firms complying with their statutory obligations as a result of today’s decision.”

“This was a poor decision.”

Charlie Mullins, founder and CEO of Pimlico Plumbers, told the BBC he was “disgusted by the approach taken to this case by the highest court in the United Kingdom”.

“This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get nasty surprise from a former contractor demanding more money, despite having been paid in full years ago.

He added: “It can only lead to a tsunami of claims.”

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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