The Supreme Court has today dismissed Pimlico Plumbers (PP)’s appeal against a tribunal decision that plumber Gary Smith was a ‘worker’ (ie an individual who has undertaken to perform work personally for someone who is not his client or customer) with workers’ rights. The law is largely unchanged by the ruling, and its fact-specific nature means that it only provides limited guidance for similar cases.
In Pimlico Plumbers Ltd v Smith, the Supreme Court found that Mr Smith’s ability to choose to use a substitute did not prevent there being a sufficient obligation of personal service, given that he could only use a substitute from the ranks of other PP operatives bound by similar obligations. The Court framed the test slightly differently from earlier courts, suggesting that it would be helpful to assess whether the “dominant feature of the contract” remained an obligation of personal performance. Factors justifying the tribunal’s conclusion that it did included that (i) the requirement for substitutes to be PP operatives indicated that the company had a clear interest in who performed the work, as opposed to caring simply that the work got done, and (ii) the written contract itself didn’t mention the right to substitute, and set out requirements of Mr Smith expressly (as to his skills, appearance etc) rather than referring to requirements extending to him or any substitute.
The “dominant feature” test suggests a broader approach than that of the Court of Appeal, which focussed closely on the extent to which any contractual right of substitution was limited or occasional. The Supreme Court also confirmed that the ability to bring an assistant on a job or call on a specialist to carry out part of the job did not amount to substitution.
As to whether the tribunal was entitled to decide that PP was not Mr Smith’s client or customer, the Court noted that Mr Smith could reject particular jobs, could take outside work, was not supervised in his work, and bore the financial risk if the end-client did not pay and for remedying deficient work. However, the tribunal was entitled to find that these elements were outweighed by other features which strongly militated against recognition of PP as a client or customer of Mr Smith. These included strict branding requirements in relation to uniform, ID card and van, a requirement to comply with administrative instructions from the control room, and a suite of post-termination restrictive covenants. The Supreme Court also considered that the one-sided payment terms “betrayed a grip on [Mr Smith’s] economy inconsistent with his being a truly independent contractor”, while contractual references to “wages”, “gross misconduct” and “dismissal” were drafting slips perhaps indicating the true nature of the relationship.
The Supreme Court did not need to – and therefore did not – decide two other questions: (i) whether the same test applies to determine who is an extended employee protected by the Equality Act (given the similar but not entirely consistent definition) and (ii) the extent to which mutuality of obligation (or the lack thereof) between assignments is relevant to an individual’s status during an assignment (in this case it was accepted that there was an umbrella contract in place).
For those interested in employment status cases, the Court of Appeal is due to hear the appeal in the Uber driver case on 30 October 2018.