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Pimlico Plumber worker should be paid sick pay, court rules in landmark gig economy case
10 February 2017 • 12:00pm
R ules for companies that employ workers in the gig economy could change after a Court of Appeal ruled against Pimlico Plumbers in a landmark case.
The Court ruled that Pimlico Plumbers’ self-employed contractors in fact qualify as workers, meaning they are entitled to employment rights such as sick pay, minimum wage and paid holiday.
Gary Smith, a former employee of the London plumbing company, brought the case, claiming that he should have been entitled to basic employment rights. Mr Smith sued the company after he was dismissed following a heart attack. He said his status was more akin to an employee than contractor and that he should have received benefits such as sick pay.
The Court of Appeal has ruled that because Mr Smith worked a minimum of 40 hours a week, had to wear a company uniform, and drive Pimlico Plumber’s vehicles he was a worker. He paid taxes as a self-employed person but only worked for the one company for six years.
Charlie Mullins, the chief executive of Pimlico Plumbers, said: I am happy this gives some clarity. We will be looking at the full judgment and there is a good chance we will appeal to the Supreme Court.
Like our plumbing, now our contracts are watertight.
P hil Pepper, employment partner at Shakespeare Martineau, said: In theory, the business model adopted by Pimlico Plumbers offers flexibility to both the employer and employee. But in reality it neglected employee rights.
The case, which is the highest court ruling on the gig economy, could have substantial ramifications across an industry characterised by short term contracts and self-employment. Notable innovative companies such as Uber and Deliveroo use the model with their drivers and cyclists being self-employed.
This is a significant ruling for the workers at Pimlico but it will also concern those companies operating in the gig economy, said Glenn Hayes, employment partner at Irwin Mitchell. We are seeing increasing numbers of individuals challenging their status and claiming to be workers or employees.
The outcome of this case is very significant and could make it more difficult for Uber and others to persuade the courts that its drivers are genuinely self-employed.
U ber is currently appealing a tribunal ruling that said its drivers are workers and entitled to basic employment rights such as National Minimum Wage and holiday pay.
Companies that use this business model are generally app-based services. Such businesses claim their technology connects customers with independent contractors.
A spokesman for the Department of Business, Energy and Industrial strategy said: The Government is committed to building an economy that works for all. We are determined to make sure our employment rules keep up to date to reflect new ways of working.
Matthew Taylor, chief executive of the Royal Society of Arts, is conducting an independent review into modern working practices, which will include a three-month UK tour.
Pimlico Plumbers offers a 24-hour service in London and employs people on a freelance basis. Mr Smith’s lawyer said the company tightly controlled who he could work for. Mr Mullins contested that its plumbers are self-employed and provide their own tools, foregoing employee benefits for higher salaries. He said Mr Smith was paid £80,000.