Pimlico Plumbers final UK decision.

Pimlico Plumbers final UK decision.

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14 Jun 2018

The Supreme Court has agreed with the lower courts that Gary Smith, one of its ‘self-employed’ plumbers was actually a worker, and therefore entitled to paid holiday and certain other statutory rights. No surprise on the verdict, but to remind yourself of the implications of the case if you employ self-employed people please read more here.

Gary had a right to refuse work when Pimlico offered it and had some financial liability through his relationship with Pimlico, but none of that meant he wasn’t an employee said the Employment Tribunal, the Employment Appeal Tribunal, the Court of Appeal and now the Supreme Court, with only the European Court of Justice to come (and no doubt it will, probably with the same result.)

Our earlier article describes the implications of worker status and to remind yourself of this please click here, but for the purposes of summary for this article being a ‘worker’ bestows more rights than a ‘self-employed’ person has (which are not many) but less rights than an employee has. The most important right a worker gains over his self-employed counterpart is the right to paid holiday, and someone like Gary Smith who is found to be a worker would be able to claim years of unpaid holiday. There are many hundreds of thousands of ‘self-employed’ people out there who are really workers and who are due hundreds of millions of pounds of unpaid holiday compensation - this is likely to be a busy topic in litigation for decades to come.

The thing about Gary Smith’s contract that most influenced the court’s decision is the substitution clause. In a genuine self-employment situation the self-employed person would be able to send a substitute to perform the services he is engaged to do, and while the employer might have some influence of who he sends he cannot unreasonably refuse to accept a suitably qualified substitute. Gary Smith’s contract was clear that he could not send a substitute – he could swap a shift with another Pimlico plumber by mutual consent, but he couldn’t send a plumber of his own choice who didn’t also work for the Company in his place.

Is your self-employed person really a worker? There are well recognised tests to find out, but the Supreme Court’s decision focusses on this one – in reality can your self-employed person send someone else to do his duties? If not, he’s likely to be a ‘worker’ and entitled to holiday pay (and back pay.)

Wise employers should take a close look at their self-employed contracts and decide whether they should in fact change to a worker contract and start paying holidays now….if the worker doesn’t bring a claim within 3 months of the last unpaid holiday the employer will be in the clear, but if they do (or the employer sticks his head in the sand) a claim with expensive consequences is more probable than possible.

Contact myHRdept to arrange a review of your self-employed contracts. There is no additional charge for existing retained customers and those who choose to become one!

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