Important Decision on Employment Status: Pimlico Plumbers & Charlie Mullins v Gary Smith

Another important decision on the issue of Employment Status; Pimlico Plumbers & Charlie Mullins v Gary Smith

The Court of Appeal has handed down an important judgment in yet another case concerning employment status in the case of  Pimlico Plumbers & Charlie Mullins v Gary Smith.

The issue of employment status is currently a hot topic, with numerous cases on the issue recently being preceded over in the courts.  It appears that there is a significant amount of confusion on the current law regarding status, and these decisions can have major consequences for both the workers and employers involved. 

What are the types of employment status?

Essentially, the law recognises three types of employment status: employee, worker and individuals who are genuinely self-employed.  Employees have significant legal rights and protections, whereas genuinely self-employed individuals are considered to be in business on their own account and therefore do not have the same legal rights and protections as an employee enjoys.  A ‘worker’ falls in between the two categories and enjoy some employment rights, but not as much as an employee.

What was the Pimlico case about?

After an appeal was lodged by Pimlico Plumbers to a previous Employment Appeal Tribunal decision, the Court of Appeal upheld the decision that plumbers employed by Pimlico Plumbers were in fact ‘workers’, and not genuinely self-employed contractors, despite being self-employed for tax purposes.

The Master of the Rolls commented that: "This case puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that... there is a legal relationship of... independent contractor rather than employer and employee or worker."

As with all cases on the issue of employment status, the decision was based on the specific individual circumstances of the case.  In this case, a number of indicators away from genuine self-employment were present, including the fact that the Claimant worked exclusively for Pimlico Plumbers from 2005 to 2011 and importantly that a contract had been signed confirming that the Plumbers’ work was governed by terms set out in the Respondent’s Manual (which importantly, included conditions governing working hours, uniform and appearance, restricted the ability of the Plumbers to work elsewhere; required the Plumbers to use the Respondent’s van for completing work, and provided that the Plumbers could only substitute work with other workers of the Respondent.  The Court considered that these factors, taken together, showed that the Plumbers were in fact workers and were not genuinely in business on their own account.

Why does the Judgment matter?

The decision is likely to be an important one on the issue of employment status.  Within its Judgment, the Court of Appeal gave a helpful summary of the principles for the 'personal service' aspect of the employment status test.  Personal service has long since been an issue that is considered when determining decisions on status.  Where a personal service is required (i.e. a requirement that only the individual should perform the work rather than being permitted to send a substitute), this is a strong indicator towards worker or employee status.  The issue of ‘personal service’ and the ability to send a substitute was highlighted as being of significant importance in the Pimlico case, with the Judgment reiterating that the more freedom an individual has to send a substitute to complete work, the more consistent this is with a genuinely self-employed relationship. In this case, it was clear that there was not an unfettered right for the workers to send a substitute to complete work  their behalf.  On balance therefore, the decision was that the plumbers were not genuinely self-employed and were in fact workers.