The question of whether an individual is an employee is not easy to answer. In recent news, following on from the highly publicised Uber decision, the Court of Appeal upheld the Employment Appeal Tribunal’s (EAT) decision that the plumbers employed by Pimlico Plumbers were workers, not self-employed contractors.
Sarah Begley of The Wilkes Partnership, considers the knock-on effects for the ‘gig’ economy and the key points for employers to be mindful of when distinguishing employment status.
In this case, Mr Smith carried out work for Pimlico Plumbers Limited between 25 August 2005 and 28 April 2011. Following a heart attack in January 2011, Mr Smith was subsequently dismissed and claimed he was unfairly dismissed due to discrimination.
Pimlico Plumbers Limited described the plumbers as ‘self-employed operatives’. The plumbers could choose which hours they worked, were responsible for their own tools and equipment, and managed their own tax and insurance on a self-employed basis. However, the plumbers insisted that they were not permitted to take on any jobs other than the ones provided by Pimlico Plumbers Limited and all were provided with a contract and staff handbook stating that staff were expected to work 40 hours per week.
There was no express contractual term allowing the plumbers to send a substitute to carry out work on their behalf, and all holiday and time off was to be declared to the company in advance.
The Court of Appeal rejected an appeal lodged by Pimlico Plumbers and agreed with the EAT that the plumbers were workers (but not employees). Significantly, as workers, they were eligible to claim discrimination rights against Pimlico.
Sarah Begley comments: “Following on from recent cases on employment status, this ruling holds wider implications for the so-called ‘gig’ economy firms. The tribunals and courts have sent a very clear message that the effect of the definition of worker is to lower the “pass mark”, so that those who fail to qualify as “employees” may still qualify as “workers”.
“Therefore, where an individual is in many ways, a self-employed contractor but there are some factors which point towards employment, it may be possible for them to qualify as a worker, even though they do not reach the higher pass mark to qualify as an employee. Thus, individuals can acquire substantial rights that the companies they work for may not have anticipated. The eagerly awaited Uber appeal is set to be heard over 2 days commencing on 27th September 2017”.
Please contact us if you would like us to review your worker documentation and structure this in line with your requirements, whether to avoid worker or employee status from arising.
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To discuss anything arising from this update, please contact Sarah Begley on 0121 733 4312 or via email at email@example.com.
You can also contact any other member of the Employment Team on 0121 233 4333 or email us at firstname.lastname@example.org.