Irwin Mitchell's Employment Specialists Comment On Judgment

High profile plumbing company, Pimlico Plumbers, has today lost its long-running Court of Appeal employment case and according to leading lawyers at Irwin Mitchell, it could have major repercussions on the way businesses such as Uber and Deliveroo operate in the future.

The dispute involving Pimlico Plumbers Ltd v Smith focuses on whether individuals who are expressly engaged as self-employed contractors are, in fact, workers or even employees.  Pimlico entered into contractual arrangements with its plumbers to provide services to its clients and the plumbers were required to use their own tools, take responsibility for their work and provide indemnity insurance. 

The plumbers though gave the appearance of working for Pimlico as they wore a uniform, drove vans which displayed the Pimlico brand and customers paid Pimlico for the work undertaken.  The Employment Appeal Tribunal initially found that the plumbers were workers (a status not recognised by HMRC who only have two classifications 'employee or self-employed') – but not employees. The matter was then referred to the Court of Appeal for a hearing on 17 January 2017 and today’s ruling has upheld the EAT’s decision.

The outcome of the case is significant because it means that the plumbers will be entitled to basic workers’ rights such as the National Minimum Wage and paid holiday. They will also be able to bring discrimination claims.

It is also significant for the so called ‘gig economy’ where in the last few years there has been a dramatic increase in the number of individuals working under self-employed contracts.  Here, individuals are paid for the tasks they complete and on rates fixed by their employer.  These individuals have no employment rights and often receive less than the National Minimum Wage. 

In the case of Uber, the private hire business launched an appeal last year against an employment tribunal ruling which followed the claim by 19 Uber drivers who contested their 'employment' status. The GMB union argued on their behalf that their employment terms and conditions meant they were not technically self-employed and were in fact ‘workers’. As a result it was claimed that they should be entitled to a range of benefits that apply to workers including the right to be paid the National Minimum Wage, holiday pay and pension. The case involving Uber is expected to continue into 2017.

Expert Opinion

“This is a significant ruling for the workers at Pimlico but it will also concern those companies operating in the ‘gig economy’. We are seeing increasing numbers of individuals challenging their status and claiming to be workers or employees. CitySprint couriers and Uber drivers recently persuaded separate tribunals that they were workers and although Uber is now appealing this, tribunals are clearly taking a pragmatic and bold approach to determining status cases, despite contractual arrangements which are designed to give the appearance that individuals are genuinely self-employed.

“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.”
Glenn Hayes - Partner & National Head of Employment Law

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