To summarise the case, Mr Smith worked under a self-employed contractor arrangement for Pimlico Plumbers from 2005 to 2011. He held self-employed status and filed and paid tax returns on this basis. He was also VAT registered and submitted VAT invoices to Pimlico Plumbers against which he was paid.
Mr Smith suffered a heart attack and Pimlico Plumbers ended their arrangement with him in May 2011. On account of this Mr Smith made a claim of disability discrimination against Pimlico. He further claimed for unpaid holiday pay.
The Court’s decision was centred on establishing the working status of Mr Smith. Worker status is a subject we have covered several times before as it is often cause for confusion. Indeed, it was the basis of Pimlico’s defence.
Even though Mr Smith held self-employed contractor status, his working arrangements were governed by rules from Pimlico Plumber that included: being available for work for up to 40 hours per week; compulsory wearing a Pimlico uniform; driving a Pimlico van which was leased from the company and only being able to swop work out to other Pimlico plumbers.
The Court decided that Mr Smith was a “Worker”.
A worker covers the status of those who are not employed as PAYE employees but neither are they fully independent self-employed contractors. It’s the status that has become prevalent in the so called “Gig Economy” and one used by claimants in other cases like those involving Uber and Deliveroo. Workers aren’t entitled to full employee rights but they are entitled to:
- The National Minimum Wage
- Rest Breaks
- Holiday Pay
- Discrimination protection
- Pension Auto Enrolment
What the decision means for you
This case still leaves some questions unanswered and we’re still waiting for the Government to issue guidance on how to categorise workers and employees. Therefore, to minimise risk, we recommend the following:
- Conduct a risk review of anyone who works for you under a ‘contractor basis
- Establish the company’s contractual relationship with them and establish whether they fall under Worker status
- Where workers do exist, establish a strategy that ensures their status is recognised and appropriate steps taken eg.
- Make tax arrangements under IR35 rules
- Pay holiday pay
- Enrol onto company pension
- Establish working rules and guidelines
- Consideration should also be given as to whether it would be better to bring workers fully on-board with the company as employees.
The Pimlico Plumbers case has had a very high profile and received much media attention. Whilst other “Worker” cases are still to be resolved it’s very likely that the outcome of this case will have an influence on how the others are treated.
For support in with conducting a risk review on your workers and contractors, call us on 01452 331331 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.
