Gig economy plumber wins workers’ rights battle against Pimlico in long-awaited judgment

Judgment

To qualify as a “worker”, Mr Smith would have to demonstrate that: (i) he was obliged to perform work personally for Pimlico Plumbers; and (ii) Pimlico Plumbers was neither his client nor his customer.

Regarding personal performance, it was accepted that Mr Smith was entitled to substitute another Pimlico Plumbers operative in his stead, despite no express contractual provision to that effect. It was further accepted that this right existed not only where Mr Smith was unable to perform the work himself (because of, say, illness) but even where he wished not to work because another more lucrative job had come up. The question was whether the scope of this right was inconsistent with personal performance.

The Supreme Court approached this question by assessing whether the “dominant feature” of the contract was personal performance by Mr Smith. Finding that the contract consistently referred to Mr Smith’s skills and competencies (“your”), rather than making provision for the use of a substitute, it was held that the dominant feature of the contract was indeed personal performance by Mr Smith. Further, the limit on Mr Smith’s right to substitute was significant: any substitute had to come from the ranks of Pimlico Plumbers’ operatives.

Regarding the client/customer issue, Mr Smith classified himself as self-employed for the purposes of income tax and VAT. Further, he purchased his own materials and charged customers (albeit funnelled through Pimlico Plumbers) a 20% mark-up. He was also free to reject offers of work; to accept outside work; and to work without supervision. These all indicated that Mr Smith was self-employed.

However, Pimlico Plumbers exercised “tight control” over Mr Smith in other ways: he wore its branded uniform; drove its branded van (which Pimlico Plumbers tracked); carried its identity card; and followed closely the administrative instructions of its control room. There were also “severe terms” as to when and how much he would be paid, and a suite of restrictive covenants limiting his post-termination activities. This level of control meant that the tribunal was entitled to find that Pimlico Plumbers was not a client or customer of Mr Smith.

Memery Crystal Comment

This is a highly fact-sensitive judgment from which few, if any, definitive conclusions can be drawn. However, the following are worth tentatively noting:

1. Businesses can expect a tough time arguing that personal performance is precluded where a contract contains no express right of substitution.
2. A very limited right of substitution, especially where there is a requirement to ensure that the substitute works for the same business, is unlikely to displace the requirement for personal performance.
3. In line with other recent cases on worker status, the level of control exercised over the putative worker continues to be crucial.
4. The Supreme Court avoided having to address the relevance to worker status of mutuality of obligations (i.e. the corresponding obligations on the employer to provide, and the worker to accept, work). It remains a controversial issue in this area of law, which has not yet been clarified, but appears to have less prominence now compared with: i) a genuine right to substitute (which was found to exist in the Deliveroo business model) and ii) application of the integration test which enables businesses like Uber and Pimlico to control their brand.