Plumbing works

In order to bring certain tribunal claims, claimants have to show they are employees as opposed to workers or self-employed contractors. In Pimlico Plumbers Ltd and anor v Smith, the Court of Appeal held that a plumber who was ostensibly self-employed was, in fact, a worker because of the degree of control that the company exercised over him and the tribunal could therefore hear some of his claims.

Basic facts

Mr Smith carried out plumbing work for Pimlico Plumbers (PP) from August 2005 to April 2011 under two agreements which he signed in 2005 and 2009. Although ostensibly self-employed, he was required to wear the company uniform, carry a company ID card, rent and drive a company van and work 40 hours per week for the company.

Although he worked solely for PP, he could decide his own working hours. PP had no obligation to provide him with work on any particular day and, in the event that there was not enough work, he would not be paid. Mr Smith was free to refuse any particular work assignment or any particular date but could not refuse all assignments. He was required to pay his own income tax and National Insurance, was registered for VAT and presented monthly invoices to PP for VAT.

Following a heart attack in January 2011 and his dismissal in May 2011, Mr Smith brought a number of claims which required him to prove firstly that he was an employee and/or a worker.

Tribunal and EAT decisions

At a pre-hearing review, the tribunal judge held that Mr Smith was not employed because the company had no legal obligation to provide him with work. In addition, there were circumstances when it did not have to pay him.

However, it found that he was a worker because he had to personally provide work for PP; he was required to work a normal week of 40 hours on the days agreed with PP; he had to discuss (and agree) his working hours with PP; and he did not have an unfettered right to substitute at will. Although he had autonomy in relation to the estimates and work done, PP exercised very tight control over him in most other respects. That included a high degree of restriction on his ability to work in a competitive situation. Finally, he was an integral part of PP's operations and could not be said to be in business on his own account.

The EAT upheld that decision and PP appealed.

Decision by Court of Appeal

The Court of Appeal dismissed the appeal, holding that it was clear from the evidence before the tribunal that Mr Smith undertook to provide his services personally and did not have “an unfettered right of substitution”. Given that Mr Smith had to work a minimum number of hours' work every week, it was also clear that the degree of control exercised by PP was inconsistent with PP being a customer or client of a business run by Mr Smith. In particular, the Court highlighted the restrictive covenant imposed by PP which precluded him from working as a plumber in any part of Greater London for three months after the agreement came to an end.

In something of an understatement, the Court noted that this “case puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor rather than employer and employee or worker”.