The Court of Appeal has issued the latest in a series of judgments regarding the issue of whether an individual is self-employed or a worker. This follows on from recent court decisions about Uber and Deliveroo.
In the case of Pimlico Plumbers v Smith, Mr Smith was engaged as a plumber for approximately 5½ years. The company terminated the relationship when Mr Smith suffered a heart attack, which resulted in Mr Smith issuing a claim in the Employment Tribunal for unfair dismissal.
The contractual documentation between Pimlico Plumbers and Mr Smith stated Mr Smith was an independent contractor, was not under an obligation to accept or be offered work. However there was provision in the contract for Mr Smith to complete a minimum of 40 hours a week.
Mr Smith was also subject to restrictive covenants in his contract, used a Pimlico Plumbers branded van and wore company uniform. However Mr Smith provided his own tools and filed tax returns on the basis he was self-employed.
At first instance, the Tribunal held Mr Smith did not have employment status, but that he was a worker.
The Company appealed, but this was rejected. The Court of Appeal agreed with the earlier decision in the Employment Tribunal.
Employment status is a significant issue for businesses as workers are entitled to employment rights including paid annual leave and the right not to be unfairly dismissed.
Cases on employment status depend on the facts. Therefore every case will have to be assessed on its own facts. However, this case is a further reminder that the employment status of an individual depends largely on the reality of the working relationship between the Company and the individual, not the label on the contractual documentation.
Employers should ensure their employment documentation are compliant with the latest employment law and regulations. At mfg Solicitors, we offer a free HR Health Check and a free review of your Contracts of Employment and Staff Handbook. For more information please contact Sally Morris at firstname.lastname@example.org or on 01905 734032.