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Employment Law

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Veale Wasborough Vizards , 22 DEC 2014

Plumber working as contractor not an 'employee'

Plumber working as contractor not an 'employee'
A plumber working as an independent contractor was not an 'employee' but was a 'worker', held the Employment Appeal Tribunal (EAT) in Pimlico Plumbers v Smith.

Mr Smith was a plumber and worked as one of 125 contractors engaged by Pimlico Plumbers (Pimlico). He wore a Pimlico uniform, drove a van with the Pimlico logo and could only be contacted by customers through Pimlico. Mr Smith accounted for his own income tax and national insurance and was required to provide his own tools and equipment. Mr Smith accepted personal liability for the work he carried out and provided his own insurance. There was no express provision permitting Mr Smith to provide a substitute for the work he had agreed to carry out. Contracts and estimates were issued in the name of Pimlico and payment was made to the company direct.

Following his dismissal, Mr Smith lodged a number of claims against Pimlico including unfair dismissal. The Employment Tribunal (ET) could only consider the claims if Mr Smith qualified as an 'employee' of Pimlico. On consideration of the facts, the ET concluded that there was no employment relationship because there was not a sufficient degree of control between Pimlico and Mr Smith. However it concluded that Mr Smith was a 'worker' largely because he had an obligation to provide his services personally and there was no unqualified right for Mr Smith to provide a substitute. Mr Smith appealed, but the EAT upheld the ET's decision.

Best practice

The decision is of practical interest to employers as it highlights issues in engaging atypical workers. Although this case is very specific to its own facts, it is a useful reminder of the factors which will be considered when assessing employment status, such as the degree of financial risk assumed by the contractor, the level of autonomy in invoicing clients and the nature of the agreed relationship between the parties.

The EAT also reaffirmed that an unqualified right to provide a substitute negates personal service which is a requirement for worker status. In considering whether Mr Smith was a worker in this case, the EAT commented that ad hoc arrangements to swap assignments between contractors did not amount to an unqualified right to provide a substitute because prior consent from Pimlico was required.

For more information, please contact Gemma Cawthray on 0117 314 5266. - See more at: http://www.vwv.co.uk/what-s-happening/publication...

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