The Pimlico Effect – What to look out for?

For businesses that utilise freelance or self employed contractors or labourers, the Gary Smith vs. Pimlico Plumbers court case was always going to be of interest due to its potential impact on the GIG economy and Employment Status.

Although Gary Smith originally lost his claim for ‘employee’ status in the original Employment Tribunal hearing in 2012, it did find him to be a ‘worker’. This entitled him to limited employment rights including minimum wage and holiday pay.

The court of appeal upheld this decision in February 2017 and now the Supreme Court has upheld the original decision that Mr Smith is a worker, despite the protests from Pimlico Plumbers.

Brief Case Information

  • Gary Smith worked solely for Pimlico Plumbers for six years
  • He was VAT registered and paid self-employed tax
  • He had signed a contract as a self-employed contractor
  • It was found that he was still entitled to workers rights

The Supreme Court ruling that said that Gary Smith was a worker, rather than a self-employed labourer/contractor, means that an Employment Tribunal can now proceed to examine whether Mr Smith was unfairly dismissed, amongst other

employment issues.

Although this is a decisive ruling, opinions are split on the impact this will have on other cases currently working their way through the courts i.e. Deliveroo and Uber, and whether it will cause other employers to change their stance on the employment status of the people they utilise within their business.

It is worth noting that every case will be taken on its own merit, and when considering the employment status of your workers you need to take into account the differences in business models and the nature of your work. What it has proven is that there is still major uncertainty for both employees and employers regarding employment status.

If employers are unsure about someone’s employment status they should consider the following:

  • Do they have multiple employers/jobs?
  • Do they have the opportunity to turn down work?
  • Are they allowed to transfer or subcontract the work as they see fit?
  • Do they operate under their own limited company?

If the answer to all of the above is ‘no’ then there is a chance that this person would have ‘worker’ status rather than being a self-employed contractor and therefore would have access to the following employment rights:

If you have concerns over the employment status of your workers on any other employment queries, please contact our HR Consultancy Team on 01302 341 344.

By Kris Kerins BSc (Hons) PGC (Tech Mgmt)Risk Services Adviser

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