Jun 20

Employment Law News

Posted by gowenstevensadmin on Wednesday 20th June 2018

On 13 June 2018 the decision of The Supreme Court was published following a hearing on 20 and 21 February 2018.

Mr Smith was a plumber and heating engineer. He worked for Pimlico Plumbers between August 2005 and April 2011. After suffering a heart attack in January 2011 he asked Pimlico to allow him to work, or be available for work, for three days a week rather than five. Pimlico refused and took away his branded van, which he hired from it. He claimed he was “dismissed” in May 2011.

Pimlico had a contract with Mr Smith that on the face of it described him as an independent contractor responsible for his own expenses, income tax and National Insurance contributions, and he did indeed over the years make all proper returns to the Inland Revenue. However, he argued that in reality, Pimlico had such a degree of control over him that he should be regarded as an “employee” or, at the very least, a “worker” who had some but not all of the rights of an employee. These include the right not to suffer unlawful deductions from wages, the right to annual leave, and the right not to suffer discrimination.

Since 1875, under the Employers and Workmen Act of that year, Parliament has identified that there are some people who fall between the definitions of employee and independent contractors. It called them “workmen”. The word “worker” first appears in the Industrial Relations Act 1971. Section 230 (3) (b) adopts it, and now such people are often called limb (b) workers.

In the original Tribunal hearing on 16 April 2012 Employment Judge Corrigan dismissed the claim that Mr Smith was an employee, and he lost that point on appeal in the Employment Appeal Tribunal on 21 November 2014. He did not pursue that claim on appeal. He won, however, his claim to be a limb (b) worker. Pimlico lost on that point in the Employment Appeal Tribunal, then in the Court of Appeal, and now in the Supreme Court.

The judgment of the Supreme Court is refreshingly short, only 20 pages. Essentially it decided that the original Tribunal was perfectly entitled, it said “by a reasonable margin”, to conclude that Pimlico was not really a client or customer of Mr Smith, but that he was a limb (b) worker. That decision was influenced by:

1.Contradictory statements within Pimlico’s own contract/operating manual;

2.A very limited right to send in a substitute to do his work;

3.Significant control over his day to day work, including a dress code, ID cards, use of a branded van with a tracker device fitted, use of a control room, and severe terms of payment to him that betrayed an unhealthy grip on his economy inconsistent with independent status; and

4.The presence of covenants restricting competition after termination of his contract.

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