Employee Status - Supreme Court Dismisses Employer's Appeal in Pimlico Plumbers Case

In the latest string of recent cases considering employment status, the Supreme Court has decided that a plumber who brought a case against his former employer was in fact a "worker" and should therefore be entitled to holiday pay and other basic workers' rights despite the fact that he had signed an agreement with the company describing himself as self-employed, and filing tax returns to this effect. However, this judgement does not lay down any new principles around employee status.

There were two key issues that the Supreme Court had to consider;

1. Whether the Tribunal had been right to say that the claimant was obliged to carry out work personally
2. Whether the Tribunal had correctly analysed the facts in deciding that the company was not a client or customer of a business operated by the plumber.

On the first issue of personal service, the Court noted that any other Pimlico Plumber employee could carry out Mr Smith’s work. However, his right of substitution went no wider than that. In relation to the second issue, the Court agreed with the Tribunal that Mr Smith was in fact, a worker due to a number of contributing factors including the tight control exercised by the company over him and the onerous restrictive covenants included within his contractual documentation. His employer also controlled his uniform, when he received payment and his administrative duties Therefore, the Court upheld that Mr Smith was an integral part of the company’s operations and was subordinate to the company, although not to such an extent that he could be considered an employee. He was not in business on his own account but was a worker.

This judgement does not lay down any new principles of law around worker status. The Supreme Court has made it clear that the judgement rested largely on the facts of this case, particularly whether the plumber had an unfettered right to substitute, rather than setting out any new legal principles for employers. Cases will continue to be argued on their own facts.