Is the gig up?

Category: Employment

Ian Grimshaw
By Ian Grimshaw

The Pimlico Plumber case has garnered the attention of the media as it worked its way through the courts, right through to the Supreme Court.

The case centres around whether or not Mr Smith was working for Pimlico on a self-employed basis or as a worker.

Mr Smith’s working arrangements displayed many of the factors which would point towards a self-employment relationship:

  1. Mr Smith was free to take outside work (as long as it was not for Pimlico clients);
  2. Mr Smith could provide a substitute to carry out his work;
  3. Pimlico reserved no right to supervise, or otherwise interfere with, the manner in which Mr Smith did his work;
  4. Mr Smith carried financial risks in his work with Pimlico: Pimlico did not pay him, not even for any materials which he had supplied, until the client had paid it;
  5. If a client complained about Mr Smith’s work, even about work done by another Pimlico operative whom Mr Smith had substituted to do it, it was Mr Smith who was responsible for remedying it;
  6. Mr Smith was responsible for purchasing his own materials and could charge an uplift to customers on those materials.

The difficulty that Pimlico faced, however, was in the obligations placed upon Mr Smith personally:

  1. The right to substitute was a limited one: the substitute had to be another Pimlico operative;
  2. The terms of the contract focussed on personal performance, referencing “your skills”, a warranty that “you will be competent to perform the work” and a requirement that “your appearance must be clean and smart”;
  3. Mr Smith was required to wear a Pimlico uniform and he was required to carry his Pimlico ID card; and
  4. Mr Smith was subjected to a “suite of restrictions” following termination.

In addition, if there was sufficient work, Pimlico provided Mr Smith with “normal hours” which consisted of a five-day week, in which he should complete a minimum of 40 hours.

On balance the Supreme Court found that the Employment Tribunal had been entitled to find that Mr Smith was a worker and, therefore, entitled to pursue claims in respect of worker rights, such as holiday and sick pay.

This case goes to demonstrate that taking some financial risk and a fettered right of substitution alone are not sufficient to prevent an individual being a worker; however, just as importantly, it demonstrates the importance of consistent contractual terms: if an individual is genuinely not required to perform work personally, then the obligations in the contract should not be personal to that individual.

This decision is likely to have a significant impact on those in the gig economy, such as Uber and Deliveroo, who, whilst they may buy or rent equipment for their work, are in reality limited in their ability to genuinely work for themselves or to allow others of their choice to do the work for them.  We can expect to see a flurry of claims from individuals in the gig economy and this judgment provides a good guide to arguments that they should pursue.