Employment Status of Tradesmen – what you need to know
December 10, 2014
(Pimlico Plumbers v Smith)
In this case Mr Smith attempted to bring various claims against Pimlico including unfair dismissal. The question was whether or not Mr Smith, a plumber, was an employee of Pimlico. The tribunal at first instance held that he was not an employee, but that he was a worker. Mr Smith appealed.
The EAT considered all of the relevant factors. Those which pointed against Mr Smith being an employee were as follows;
- The relationship between Pimlico and Mr Smith, under the contract, was that Mr Smith was self-employed and carried out his business as an independent contractor. It stated that “nothing in the agreement shall render you an employee, agent or partner of the Company [Pimlico Plumbers]”.
- Mr Smith provided his own tools and equipment;
- Mr Smith was personally responsible for the work that he did;
- Mr Smith provided his own insurance;
The factors in favour of Mr Smith being an employee were:
- Mr Smith wore a Pimlico uniform and drove a van with the Pimlico logo on it;
- Contracts and estimates were issued in Pimlico’s name and payment was made to them;
- Pimlico monitored the whereabouts of their plumbers using a GPS system and Mr Smith was required to work a 40 hour 5 day week (although Mr Smith could select the hours he wanted to work and could choose which jobs to accept from Pimlico); and
Mr Smith could transfer work to other operatives but did not have an unfettered right to substitute.
In upholding the decision that he was not an employee, the EAT held the employment tribunal had been entitled to have regard to the Claimant’s financial risk, the degree of autonomy as to quotations and how work was carried out. It was also of significance that both parties acted as though the Claimant was self-employed.
The EAT also upheld the decision that the Claimant was a ‘worker’, largely because it was envisaged that he would provide personal service. It reaffirmed that an unqualified right to provide a substitute negates personal service but that where prior consent is required to substitute, the right is not unfettered.
Sara Sawicki Says: Although fact specific, this case is a useful reminder of the factors that tribunals will consider when deciding whether an individual is an employee, worker or self-employed. Although Mr Smith did not succeed with his claim that he was an employee, neither did Pimlico succeed in arguing that Mr Smith was not a worker and this is the more interesting aspect of the case. The EAT noted that despite the contract, which held that Mr Smith was self-employed, there was no express provision which permitted substitution. It held that the most Pimlico was willing to tolerate was a form of job-sharing or shift swapping without any legal obligation, which was insufficient to amount to an unfettered right of substitution. Notwithstanding this, we would advise employers who do not wish to create an employment or worker relationship, to include an express substitution clause in the contract and to periodically review such provision against the practices on the ground.