The “Self-Employed” Plumber…Is A Worker!
We have been reporting regularly on the heavily disputed topic of employment status in recent months. In this article, we look at the recent case of Pimlico Plumbers Ltd (the “Company”) v Smith (“Mr Smith”).
Mr Smith brought a claim to the Employment Tribunal (the “ET”) claiming that following a heart attack, he was unfairly or wrongfully dismissed by the Company. Mr Smith also alleged that he had been discriminated against on the grounds of disability, had suffered unlawful deductions from wages and holiday pay. The matter proceeded to the Employment Appeal Tribunal in 2014 and subsequently to the Court of Appeal (the “CA”). The question for the CA to decide was whether the ET correctly concluded in 2012 that Mr Smith was a worker for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998.
Mr Smith worked as a plumber for the Company for 6 years and was labelled as a self employed operative. The original agreement entered into by Mr Smith and the Company stated that the terms of the agreement were detailed in the Company Procedures and Working Practice Manual (the “Manual”). The Manual included provisions that:
- Mr Smith must wear company uniform at all times;
- Mr Smith must work normal working hours which consist of a 5 day week, in which a minimum of 40 hours should be completed;
- Mr Smith must always be available during his shift to take on call work; and
- Mr Smith’s wages would be paid direct into his bank account.
The Manual also included detailed provisions as to producing timesheets, invoices, presenting ID cards, and using mobile phones.
The agreement was replaced by a longer more detailed agreement in 2009 (the “2009 Agreement”). The 2009 Agreement included restrictive covenants and a requirement that the services provided by Mr Smith would be provided for periods as agreed by the Company. Additionally, neither the Manual nor the 2009 Agreement contained an express right for Mr Smith to send a substitute or delegate to carry out his work.
All of the above arrangements pointed to the Company having a degree of control over Mr Smith.
However, various arrangements pointed to Mr Smith being self-employed. Firstly, throughout the working relationship Mr Smith accepted that whilst working for the Company he believed he was self-employed. Additionally, the following arrangements pointed to Mr Smith being self-employed:
- Mr Smith engaged an accountant to prepare income and expenditure accounts throughout his relationship with the Company;
- Mr Smith paid his wife to complete company secretarial duties;
- Mr Smith covered substantial costs of the materials himself. In the last full year he worked for the Company he spent £52,887 on materials; and
- Mr Smith provided his own protective clothing.
Upon consideration of the facts the CA held that Mr Smith was a worker. The CA considered that the following arrangements pointed to Mr Smith being a worker:
- Mr Smith was required to carry out the work personally;
- Neither party disapplied the application of the manual to the 2009 agreement. Therefore, the provisions within the Manual which denoted the Company’s control over Mr Smith were still applicable;
- Mr Smith was obliged to work hours as stipulated by the Company; and
- The onerous restrictive covenants included within the 2009 Agreement.
As a worker, Mr Smith would therefore be able to pursue his claims for unlawful deductions, holiday pay and disability discrimination.
If you would like advice on the topics discussed in this article, please contact our employment team on 0345 070 6000.