Many important employment rights are only given to employees. For example, only persons with the status of 'employee' can claim unfair dismissal, maternity leave and redundancy rights.

Not all people who work for others are considered to be employees. Some fall instead into the wider category of 'workers' (who have a different set of employment rights, e.g. unlawful deduction of wages, national minimum wage, holiday pay, discrimination, whistleblowing and pension auto-enrolment) and some work for others but remain independent contractors.

The recent Supreme Court decision of Pimlico Plumbers Ltd v Smith confirmed that a plumbing operative who was engaged in an agreement which described him as self-employed was actually undertaking work personally for the company such that whilst he did not work under a ‘contract of employment’ he was still a ‘worker’. The Court unanimously dismissed the employer’s appeal against the previous decisions of the Employment Tribunal, EAT and Court of Appeal which had all previously held that he was a worker.

The Court reached this conclusion after considering two principal factors – whether Mr Smith had undertaken to personally perform his work or services for Pimlico, and whether Pimlico was neither his client nor his customer.

The terms of the contract clearly envisaged performance by Mr Smith personally, referring to his skills, competence, conduct and appearance. The Court found that whilst Mr Smith had the contractual right to appoint a substitute, the limitation of it was significant in that the substitute had to come from the ranks of Pimlico’s operatives. In view of this the Court held that the Tribunal was entitled to hold that the dominant feature of Mr Smith’s contract with Pimlico was an obligation of personal performance.

The Court found that features of the contract, such as Pimlico’s tight control over Mr Smith’s attire and the administrative aspects of any job, the severe terms as to when and how much it had to pay him, and the suite of covenants restricting his working activities following termination, meant that the Tribunal had been entitled to conclude that Pimlico could not be regarded as a client or customer of Mr Smith.

This is another important decision around the ‘gig economy’ and is consistent with previous Tribunal decisions around Uber drivers, Addison Lee bicycle couriers, CitySprint couriers and Hermes couriers.

Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.