Employment status is a hot topic at the moment – there have been several cases in which employment tribunals have decided that self-employed individuals are in fact workers. We have previously reported on the Uber and the Addison Lee cases concerning employment status in our October and December 2017 bulletins. In the case of ‘Pimlico Plumbers’, the Supreme Court has now also considered employment status and delivered a landmark decision, finding in favour of an individual claiming worker status.
- Worker status
A worker is defined as an individual who works under (a) a contract of employment, or (b) a contract in which the individual undertakes to do or perform personally work for another party (who is not a client of any business carried on by the individual). This is a very simplified definition, and the ‘test’ involves various other elements including matters such as control, the right of substitution and pay arrangements. There have been numerous cases debating worker status and the factors which indicate whether an individual is in fact a worker and not an independent contractor. These cases often turn on the specific facts in question, but provide useful guidance on how to determine worker status.
If a self-employed individual should actually be defined as a worker, establishing worker status is hugely important. A worker is entitled to various employment rights, including holiday, national minimum wage and protection from unlawful deductions from their wages. An individual who is deemed to be self-employed is not entitled to receive such benefits.
- Supreme Court ruling
The Supreme Court held in Pimlico Plumbers Ltd and Mullins v Smith that a plumber (“S”) was in fact a worker, and not an independent contractor as maintained by the appellant (“P”). S worked for P for over five years. He was dismissed four months after suffering a heart attack. S issued proceedings against P for unfair dismissal, wrongful dismissal, entitlement to pay during medical suspension, holiday pay, unlawful deductions from wages and disability discrimination.
In the first instance the employment tribunal found that S was a worker within the statutory definition. P appealed this decision, and both the EAT and the Court of Appeal dismissed P’s appeals. P appealed again to the Supreme Court, asserting that the tribunal’s reasoning was inadequate.
The Supreme Court held that the tribunal was entitled to conclude that S had established that he was a limb (b) worker. The dominant feature of S’s contracts with P was an obligation of personal performance – there was no unfettered right to substitute at will. The terms of the contract of employment were clearly directed to performance by S personally. The tribunal also found that P was not a client or a customer of S. These findings led to the Supreme Court’s decision that S was a worker and was not self-employed as maintained by P.
As with other recent decisions which have found worker status, this decision was based on the specific facts of the case.
- Case law update
The EAT dismissed Addison Lee’s appeal and held that the courier was a limb (b) worker and so entitled to holiday pay and various other associated statutory rights.
Uber’s attempt to leapfrog the Court of Appeal was unsuccessful. Uber’s appeal is expected to be heard in late October 2018 in the Court of Appeal.
The Independent Workers Union of Great Britain is bringing a High Court challenge over the employment status of Deliveroo couriers. Deliveroo was successful in a decision handed down by the Central Arbitration Committee in November last year.
In other news, the trade union GMB has announced that it will be taking legal action against Amazon delivery companies on behalf of delivery drivers.