Uzma Rabi, a leading solicitor within Mackrell Turner Garrett’s employment law team, is calling on those businesses working with self-employed contractors to review their existing relationships to ensure their employment status is correct.
Her calls come after a landmark case in the Supreme Court found that a former employee of Pimlico Plumbers was denied rights after being labelled as self-employed instead of as a worker for the company.
Gary Smith, a former heating engineer for the company was successful in his claim against the firm, establishing that he was a worker and not self-employed and was therefore entitled to a number of employment protection rights, such as holiday and sick pay.
Having previously successfully brought his claim against Pimlico in each stage of his legal battle through the courts, to the UK’s highest court this ruling will guide future case law in regards to those operating as contractors in the so-called ‘gig economy’.
Delivering the judgment, Lord Wilson said: “Although the contract did provide him with elements of operational and financial independence, Mr Smith’s services to the company’s customers were marketed through the company.
“More importantly, its term enabled the company to exercise tight administrative control over him during his periods of work for it; to impose fierce conditions on when and how much it paid to him, which were described at one point as his wages; and to restrict his ability to compete with it for plumbing work following any termination of their relationship.
“We hold that the tribunal was entitled to conclude that the company cannot be regarded as a client or customer of Mr Smith.”
While the judgement recognises that some elements of Mr Smith’s position in the company were similar to those of a self-employed contractor, such as the ability to refuse work, other elements suggested that he was more like a traditional employee. This included the requirement to wear a uniform and have a tracker fitted to his van, while his contract made mention of wages and gross misconduct, elements that would normally be associated with a direct employee rather than a contractor.
Reflecting on the case, Uzma said: “The case of Pimlico Plumbers is the first of its kind to make it to the Supreme Court and while there have been others, such as Uber’s previous hearings in tribunals regarding a number of its drivers, this will be the first to set a significant precedent that future rulings are likely to consider.
“In light of this, some may be asking whether this is the death of the gig economy, however, I feel that the flexibility and opportunities offered by this employment model are not likely to immediately die off. As the Supreme Court has already made clear in its judgement, the Pimlico ruling is very specific to the facts of the case.
“Instead we are likely to see businesses reviewing their existing relationships with ‘contractors’ to ensure that they do not fall foul of the same ambiguity. Others may feel that the reputational and financial damage caused by such claims means that it is far simpler to reclassify their contractors as workers, as we have already seen to some degree with the likes of DPD Group and its decision to extend certain rights to its drivers.”
Uzma said that those businesses operating inside and outside of the gig economy that regularly interact with self-employed contractors should review their policies and contracts immediately.
“Now is the time to act, especially as the Government is already considering how proposals, similar to those suggested in the Taylor Review last year, can be implemented into future employment legislation,” warned Uzma.
“With the abolition of employment tribunal fees, it has become far easier to bring claims than in the previous five years, so I would expect the number of ‘gig economy’ claims to continue to rise in the months and years to come.”